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Big Pharma - The Way Forward

Big Pharma - The Way Forward. Swedish-American Life Science Summit 20 th August 2009. Anders Ekblom Executive Vice President Global Drug Development. AstraZeneca Global R&D organisation. Södertälje Mölndal Lund. Alderley Park Charnwood Cambridge. Montreal Boston Wilmington

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Big Pharma - The Way Forward

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  1. Big Pharma - The Way Forward Swedish-American Life Science Summit 20th August 2009 Anders Ekblom Executive Vice President Global Drug Development

  2. AstraZenecaGlobal R&D organisation Södertälje Mölndal Lund Alderley Park Charnwood Cambridge Montreal Boston Wilmington Gaithersburg Reims Osaka Mountain View Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development Shanghai Bangalore

  3. Agenda • The Pharmaceutical Industry in Perspective • Challenges • Opportunities • Scorecard for Future Success – AZ Case Study Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  4. The Pharmaceutical Industryin Perspective

  5. 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development 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

  6. $897+ million USDto bring one drug from concept to market 12 yearsto develop a new medicine One in 5000new chemical compounds make it to market Pharmaceutical Industry -Key facts Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development • 80% drugs fail leaving 20% to fund the R&D engine

  7. Pharmaceutical Industry -R&D expenditure Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development 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 R&D. Mid and Other companies are defined as those spending <US$ 1.8 billion in 2005 on ethical pharmaceutical R&D.

  8. Pharmaceutical IndustryChallenges

  9. Challenges -Industry Trends Industry Overview: Global R&D expenditure, development times, global sales and NME output 1998 - 2008 +160% Sales + 80% R&D Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development +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

  10. Challenges -R&D Productivity NME Success Rates By Phase And Overall 2004-2008 Industry Portrait, Pure Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development 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 R&D General Metrics 2008, slide 198 Cohort: PBF member companies

  11. 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 R&D) • NICE and HTA • Patent Expiry • 20 year patent – 12 year development time = limited time to recoup R&D costs Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  12. NICE: Impact so far Result of 232 reviews and decisions Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development Approved Research only Restricted No use

  13. Pharmaceutical IndustryOpportunities

  14. Opportunities -Future Unmet Medical Need Smoking addiction Living longer Obesity • Symptomatic  Disease modification/prevention • One size fits all  Personalised medicine • Ageing population • Rational sequence of treatment and combinations Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development Allergy Stress/Pain

  15. Mechanism Model Marker Patients 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  16. 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. Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  17. 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 molecules—genes, proteins, and antibodies as drugs • Fewer toxicological issues with biologics Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  18. Opportunities -Emerging Markets “ Emerging markets will play a major part in the futureof 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  19. Scorecard for Future SuccessAZ case study

  20. AstraZeneca - Our Strategy The Fast Forward plan “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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development Change our behaviour and our culture Strengthen the pipeline Grow the business Reshape the business Products Patient Needs Performance People

  21. Cardiovascular and Gastrointestinal Oncology and Infection Neuroscience Respiratory and Inflammation New Opportunities Across Biologicals, Small Molecules, Vaccines AstraZenecaAreas of Medical Focus Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  22. AstraZenecaInnovation Center China (ICC) AZ’s newest global R&D 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development ICC facility opening ceremony, Oct 15, 2008

  23. AstraZenecaPersonalised Healthcare (PHC) • AZ evaluates every new drug candidate for PHC opportunity as a core component of the R&D Operating Model • Key AZ projects in regulatory development actively testing PHC strategies • IRESSA – PHC in action • Dedicated team within R&D Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development “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”

  24. 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, p<0.0001 Gefitinib EGFR M+ (n=132)Gefitinib EGFR M- (n=91)Carboplatin / paclitaxel EGFR M+ (n=129) Carboplatin / paclitaxel EGFR M- (n=85) Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development M+, mutation positive; M-, mutation negative Pre-planned analysis of patients in which EGFR mutation status was available

  25. 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  26. MK-2206 AZD6244 AstraZeneca & Merck Phase 1Collaboration • 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development • Combination has much higher chance of providing benefit to patients with cancer than either agent alone

  27. AstraZenecaBPO in Clinical Data Management (CDM) • December 2007: AZ partnered with Cognizant for CDM operations • Largest outsourcing agreement of it’s 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 Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development

  28. AstraZenecaCase study ü ü ü ü Big Pharma: The Way Forward Anders Ekblom, Executive VP Drug Development ü ü ü ü ü

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