Big Pharma The Way Forward

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Big Pharma - The Way Forward
Swedish-American Life Science Summit 20th August
2009
Anders Ekblom Executive Vice President Global
Drug Development
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AstraZenecaGlobal RD organisation
Södertälje Mölndal Lund
Alderley Park Charnwood Cambridge
Montreal Boston Wilmington Gaithersburg
Reims
Osaka
Mountain View
Shanghai
Bangalore
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Agenda

• The Pharmaceutical Industry in Perspective
• Challenges
• Opportunities
• Scorecard for Future Success AZ Case Study

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The Pharmaceutical Industryin Perspective
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Pharmaceutical Industry -Global sales
Global Pharma Historical Market Dynamics
Current Economic Environment
Pharmaco challenges
Global Sales and Market Growth

• The USA/top 5 Europe/Japan no longer Mr Atlas
• Lower GDP growth and tax revenues will impact
  healthcare budgets/promote more aggressive cost
  containment
• Biotechnology, a big growth area, affected by
  lack of investment funds
• Several big selling drugs will face patent
  expires during the next few years
• The most attractive areas for growth are in
  emerging markets

Source IMS Health MIDAS MAT December 2008,
Pharmerging markets China, India, Russia,
Brazil, Mexico, Turkey and South Korea.
Presentation prepared for AstraZeneca 14th May
2009
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Pharmaceutical Industry -Key facts

• 897 million USD to bring one drug from concept
  to market
• 12 years to develop a new medicine
• One in 5000 new chemical compounds make it to
  market

• 80 drugs fail leaving 20 to fund the RD
  engine

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Pharmaceutical Industry -RD expenditure
This graph is based on data from 22 companies (10
Major and 12 Mid and Other)
Major companies are defined as those spending
US 1.8 billion in 2005 on ethical
pharmaceutical RD. Mid and Other companies are
defined as those spending ltUS 1.8 billion in
2005 on ethical pharmaceutical RD.
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Pharmaceutical IndustryChallenges
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Challenges -Industry Trends
Industry Overview Global RD expenditure,
development times, global sales and NME output
1998 - 2008
160 Sales
80 RD
30 Dev.times
-43 NMEs
The development time data point for 2008
includes data from 2007 and 2008 only
Source CMR International (2009 FactBook) IMS
Health
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Challenges -RD Productivity
NME Success Rates By Phase And Overall 2004-2008
Industry Portrait, Pure
Black numerals refer to number of NME entries
required in each phase to obtain 1 Approval
figures in red box are success rates for each
phase
Source PBF RD General Metrics 2008, slide
198 Cohort PBF member companies
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Challenges -Industry Trends continued

• Mergers (risk vs. reward)
• 75 of large mergers fail to create shareholder
  value greater than industry averages
• Pricing Pressures (ROI on RD)
• NICE and HTA
• Patent Expiry
• 20 year patent 12 year development time
  limited time to recoup RD costs

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NICE Impact so far
Result of 232 reviews and decisions
Approved
Research only
Restricted
No use
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Pharmaceutical IndustryOpportunities
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Opportunities -Future Unmet Medical Need
Smoking addiction
Living longer
Obesity
Stress/Pain
Allergy

• Symptomatic ? Disease modification/prevention
• One size fits all ? Personalised medicine
• Ageing population
• Rational sequence of treatment and combinations

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Opportunities -Predictive Science

• We apply our extensive scientific expertise in
  this field to
• drive greater disease understanding
• ensure the safety of medicines
• improve efficacy success rate

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Examples of Predictive Science

• Identifying and using biomarkers to measure
  disease progress or the effects of a drug or
  combination of drugs in treatment.
• Using sophisticated computational and imaging
  technologies to model what happens in biological
  systems, which can help us predict safety,
  efficacy and doses before moving our studies into
  man.
• Looking for a better model for animal-to-man
  predictions through translational understanding
  of PK/PD relationships.

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Opportunities -Biologics Genetics

• Emerging areas of research that promise to
  transform our understanding of human health and
  disease in the coming years
• Biologics are increasing due to genomics
• Researchers are discovering how to use human
  moleculesgenes, proteins, and antibodies as
  drugs
• Fewer toxicological issues with biologics

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Opportunities -Emerging Markets

• Emerging markets will play a major part in the
  future of the (life science) industries.
  Companies will have to significantly expand
  investment in emerging markets across a wide
  range of activities, including Research and
  Development. - Economist Intelligence Unit
  Deloitte Touche Tohmatsu

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Scorecard for Future SuccessAZ case study
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The Fast Forward plan
AstraZeneca - Our Strategy
MAKING THE MOST MEANINGFUL DIFFERENCE TO
PATIENT HEALTH THROUGH GREAT MEDICINES
Valued medicines
Customer-centric mindset
Lean and agile organisation
Responsible leaders who make every interaction
count
Strengthen the pipeline
Grow the business
Change our behaviour and our culture
Reshape the business
Performance
People
Patient Needs
Products
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AstraZenecaAreas of Medical Focus

• Cardiovascular and Gastrointestinal
• Oncology and Infection
• Neuroscience
• Respiratory and Inflammation
• New Opportunities
• Across Biologicals, Small Molecules, Vaccines

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AstraZenecaInnovation Center China (ICC)

• AZs newest global RD centre site
• Focus on translational science by developing
  knowledge on potential ethnic difference and
  regional unmet medical needs
• Provide science support for our activities in
  this region
• Tap into the large talent pool and increasing
  innovation

ICC facility opening ceremony, Oct 15, 2008
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AstraZenecaPersonalised Healthcare (PHC)

• AZ evaluates every new drug candidate for PHC
  opportunity as a core component of the RD
  Operating Model
• Key AZ projects in regulatory development
  actively testing PHC strategies
• IRESSA PHC in action
• Dedicated team within RD

PHC aims to create superior patient outcomes
through the use of healthcare tools and
diagnostics, achieving right treatment, right
patient, right dose, right (first) time
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AstraZenecaLCM Update - Iressa
EU approval received across all lines of therapy
for EGFR mutation positive NSCLC based on
INTEREST, IPASS full data review July 09
Probabilityof PFS
In EGFR mutation-positive patients, IRESSA
reduces the risk of progression by 52 vs.
doublet chemotherapy
Treatment by subgroup interaction test, plt0.0001
Gefitinib EGFR M (n132)Gefitinib EGFR M-
(n91)Carboplatin / paclitaxel EGFR M
(n129) Carboplatin / paclitaxel EGFR M- (n85)
M, mutation positive M-, mutation
negative Pre-planned analysis of patients in
which EGFR mutation status was available
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AstraZenecaInnovative Partnerships

• In-licensing
• DSP, Dynavax, Argenta
• Acquisitions
• Arrow, Kudos, MedImmune
• Spin Outs
• Albireo
• Fostering
• Cancer Research UK
• Research and Screening
• Alcon
• Risk-Sharing
• BMS
• Combination Therapy
• Pozen, Abbott, Merck

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AstraZeneca Merck Phase 1 Collaboration

• First combination of two unapproved agents in
  early development, from separate pharma companies
  to treat patients with cancer

• Combination will block signalling in the two key
  pathways involved in cancer cell survival and
  growth

• Combination has much higher chance of providing
  benefit to patients with cancer than either agent
  alone

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AstraZenecaBPO in Clinical Data Management (CDM)

• December 2007 AZ partnered with Cognizant for
  CDM operations
• Largest outsourcing agreement of its kind in the
  pharmaceutical industry
• Drivers
• Process simplification and efficiencies
• Reduce costs
• Strategic decision to invest in core capabilities
• Benefits
• 150Mn cost reduction over 5 years
• Standardised high quality delivery process and
  tools
• 10Mn joint investment to fund continuing
  transformation and innovation
• Transition successfully delivered in 6 months
• In business as usual the CDM engagement is
  delivering to targets and meeting the broader
  organization goals of AstraZeneca

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AstraZenecaCase study
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