astrazeneca plc second year-end late-stage …...december 15, 2016 / 4:00pm, azn.l - astrazeneca plc...

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EDITED TRANSCRIPTAZN.L - AstraZeneca PLC Second Year-End Late-Stage PipelineInvestor Science Presentation

EVENT DATE/TIME: DECEMBER 15, 2016 / 4:00PM GMT

OVERVIEW:

Co. provided an update on their late-stage pipeline.

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C O R P O R A T E P A R T I C I P A N T S

Thomas Kudsk Larsen AstraZeneca PLC - Head of IR

Sean Bohen AstraZeneca PLC - Head of Global Medicines Development and Chief Medical Officer

Rob Iannone AstraZeneca PLC - Head of Immuno-Oncology, Global Medicines Development

Colin Reisner AstraZeneca PLC - Head of Respiratory, Global Medicines Development, Chief Medical Officer, Pearl Therapeutics

Elisabeth Bjork AstraZeneca PLC - Head of Cardiovascular and Metabolic, Global Medicines Development

Klaus Edvardsen AstraZeneca PLC - Head of Oncology, Global Medicines Development

C O N F E R E N C E C A L L P A R T I C I P A N T S

Sachin Jain BofA Merrill Lynch - Analyst

Seamus Fernandez Leerink Partners - Analyst

Luca Issi Cowen and Company - Analyst

Simon Baker Exane - Analyst

Tim Anderson Bernstein - Analyst

Trung Huynh Credit Suisse - Analyst

James Gordon JPMorgan - Analyst

Eric Keisman Capital Group - Analyst

P R E S E N T A T I O N

Operator

Good afternoon. Welcome, ladies and gentlemen, to AstraZeneca's second-year end late stage pipeline investor science webcast.

Before I hand over to AstraZeneca, I would like to read the Safe Harbor statements. The Company intends to utilize the Safe Harbor provisions ofthe United States Private Securities Legislation Reform Act of 1995. Participants on this call may make forward-looking statements with respect tothe operations and financial performance of AstraZeneca. Although we believe our expectations are based on reasonable assumptions, by theirvery nature forward-looking statements involve risk and uncertainties, and may be influenced by factors that could cause actual results to differmaterially from those expressed or implied by forward-looking statements. Any forward-looking statements made on this call reflect the knowledgeand information available at the time of this call. The Company undertakes no obligation to update forward-looking statements.

I will now like to hand the call over to Mr. Thomas Kudsk Larsen. Please go ahead, sir.

Thomas Kudsk Larsen - AstraZeneca PLC - Head of IR

Good morning and good afternoon, depending where you are, and welcome to our second year-end conference call and webcast to discuss ourlate stage pipeline. I'm Thomas Kudsk Larsen from Investor Relations, and I'm pleased to see so many of you on the call today.

Before we get started, I want to thank Nick Stone and Henry Wheeler from the IR team for the work planning and doing the webcast today. Alsowant to remind everyone, that our focus today is on the clinical aspects of the late stage pipeline. So we'll aim at leaving any commercial or financequestions for another day. The presentation is available for download on AstraZeneca.com.

Please turn to slide number 2, and here you'll see the usual Safe Harbor statement.

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DECEMBER 15, 2016 / 4:00PM, AZN.L - AstraZeneca PLC Second Year-End Late-Stage Pipeline InvestorScience Presentation



Please turn to slide number 3. Today we're joined by Sean Bohen, our Head of Global Medicines Development and Chief Medical Officer. Sean willreview the most exciting medicines in our late stage pipeline. We expect to spend about 45 minutes on the presentation.

For the Q&A session afterwards, we also have several of Sean's colleagues to help us if needed, including Rob Iannone, to cover immuno-oncology,Klaus Edvarsen to cover small molecule oncology, Elisabeth Bjork, to cover cardiovascular and metabolic diseases, and Colin Reisner to coverrespiratory. We expect to have another 45 minutes for the Q&A session.

With this, I'll hand over to Sean on slide number 4.

Sean Bohen - AstraZeneca PLC - Head of Global Medicines Development and Chief Medical Officer

Thank you, Thomas, and thank you to everyone for joining us today. It's a pleasure to be with you to discuss the medicines that we are most excitedabout in our late stage pipeline. I'd like to reiterate that this call will highlight only select pivotal and lifecycle clinical programs that represent ourmost meaningful near-term opportunities.

Today I want to take you through the 2016 highlights across our three main therapy areas, namely oncology, cardiovascular and metabolic diseases,and respiratory. We'll also look at progress within other opportunities, before concluding with a review of the expected news flow in 2017 and2018. Next slide, please.

To start with, turning to the significant level of news flow we delivered in 2016, it's fair to say that it's been an encouraging year for AstraZeneca.The green boxes that you can see on the slide represent a favorable outcome for us. These really outweighed the number of unfavorable greyboxes. We recognize that, as we take an appropriate amount of pipeline risk onboard, we'll occasionally encounter disappointments, but this yearwe were rewarded with real successes that were spread across our therapy areas.

Next slide, please. Here on slide 6, we have 14 new medicines listed, key lifecycle programs, or in Phase III or under registration. This number is justone way of illustrating that we have one of the richest and most comprehensive pipelines in the industry. Our emphasis on three main therapyareas means that we've been able to focus our resources and energy in the most promising areas of unmet medical need, and deliver against ourhigh expectations.

People ask us all the time, which of our potential medicines excite us the most? The volume of opportunities on this page is overwhelming.

So if you turn to slide 7, I'll give you a clear idea of our priorities. As you may have heard us say many times this year, there's more to our IO programthan the MYSTIC trial. There's more to our oncology program than IO, and there's more to AstraZeneca than oncology.

Our current late stage oncology pipeline can be divided into four main opportunities, immuno-oncology, Tagrisso, Lynparza, and acalabrutinib Iwant to take you through the potential of each of these today.

In cardiovascular and metabolic diseases, we're most excited about the prospects for ZS-9 in hyperkalaemia, and roxadustat in anemia. And finallyin respiratory, our near-term late stage news flow focus is on benralizumab for the treatment of severe uncontrolled asthma.

Please turn to slide 9. Next one, please. There we go. I want to kick off my late stage pipeline review with one of our newest oncology medicines,Lynparza. At ASCO this year, we were very excited to present our long-term follow-up from BRCA-mutated cohort of Study 19, a trial of Lynparzain ovarian cancer patients. The key takeaway here was that at five years out, a remarkable 15% of patients were still alive. This is a true testamentto a great medicine, providing a tail on the curve akin to that sometimes seen with immunotherapy.

In October, we were pleased to announce that our confirmatory Phase III randomized trial in the maintenance of second-line ovarian cancer patientsread out positively, substantially exceeding the benefit that we saw in our Phase II Study 19 trial. We believe that when we present the data, thatthe profile will be a very competitive one.

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It is also important to note that SOLO-2 will allow us to bring tablets to the market, significantly reducing the pill burden for patients from 16capsules per day now, to 4 tablets per day in the future. We plan to share and discuss SOLO-2 data plus Study 19 with the FDA to support Lynparza'suse as second-line maintenance treatment for ovarian cancer patients.

We were disappointed by the result of the GOLD trial in gastric cancer. Lynparza did provide a marginal benefit as presented at ESMO, but did notreach statistical significance in this unselected Asian patient trial.

We are, however, pleased to announce that we have posted our Phase III prostate cancer trial, PROFOUND based on the compelling Phase II TOPARPdata, which showed an 88% response rate in patients. Worth noting is also that this is the first Phase III trial to utilize the new 15 gene panel testthat we discussed with you at our ASCO presentation back in June. We also look forward to data readouts in breast cancer, first-line ovarian cancer,and the various combination trials from next year and beyond.

Please turn now to slide 10. Before we move on to Tagrisso, I wanted to highlight the unique potential for AstraZeneca in non-small cell lung cancer.Our legacy medicine, Iressa has been used to target the EFGR mutation, which as you can see is very prominent in the Asian patient population.Tagrisso, the next-generation tyrosine kinase inhibitor now leads the market in second-line T790M patients with the potential to be the best-in-classmedicine in the EGFR space.

It is also worth highlighting the current unmet medical need in EFGR and ALK wild-type patients shown in the purple section of the pie chart. It ishere that we are testing our immunotherapy medicines, Durvalumab and Durva + Treme, which I will provide more detail on later in the call. Thisis also where combinations with chemotherapy may have a role to play in some patients. In short, Tagrisso will build upon our legacy in EGFRmutant non-small cell lung cancer, and our IO program is expected to further increase our presence in this cancer type over the coming quartersand years.

Please turn to slide 11. Just last week, we presented data from our confirmatory Phase III trial, AURA3 in second-line T790M patients. As you cansee by the Kaplan-Meier plots, there is a clear separation of the curves versus chemotherapy. The separation occurs very early on and widens withtime. It's probably a little early to draw conclusions from this data, but we are also seeing a sustained tail response in about 30% of patients.

With a hazard ratio of 0.3 and a median progression-free survival benefit of almost six months versus standard of care, we feel this is fantastic newsfor patients who harbor the T790M mutation. Further, the AURA3 trial showed a hazard ratio of a similar magnitude in patients with brain metastases.This we believe this is due to the blood-brain barrier penetration ability of Tagrisso. Today we are delighted to announce acceptance of the AURA3regulatory submissions in both the United States and EU, with priority review status already granted in the US.

Please turn now to slide 12. Building on the next steps for Tagrisso, beyond second-line T790M patients, the compelling brain metastasis data forTagrisso versus other tyrosine kinase inhibitors will be a key driver for the wider use of this medicine. On the right hand side, we see the compellingPhase I data presented at ELCC this year, where we saw a 77% confirmed overall response rate, and almost 20 months median progression-freesurvival in the first-line setting. We very much look forward to the first-line data from the FLAURA trial expected in the second half of next year.

Please turn to slide 13. To summarize 2016 for Tagrisso, we stand here, a month and a year after the launch in the US, with one of the fastestdevelopment time lines in the industry, from first-in-man to regulatory approval. We've built on the US approval this year with launches in the EUand Japan, and with the commencement of the China submission. We also saw the approval of the blood-based diagnostic in the US by ourdiagnostics partner, which will assist in the identification of patients harboring the T790M mutation.

As we look to 2017, we hope to build on the Phase I first-line data with a read-out for the FLAURA trial in the second half of 2017, and in the adjuvanttrial already underway. In summary, we look forward to a continued exciting journey with Tagrisso, with many more data points coming.

Please turn to slide 14. Turning now to our IO program, we can see efficacy being well-established in non-small cell lung cancer. Recently at ESMOfor PD-L1 expression greater than 25% in Durvalumab monotherapy, we saw 6 month and 12-month overall survival at 80% and 71%, respectivelyfrom Study 1108. We continue to see the primary benefits of the immuno-oncology in overall survival.

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Looking at our internal data, we're continuously learning from Study 1108 and Study 006 to better inform our MYSTIC trial. To date, Study 1108has seen over 1,000 patients treated across multiple cancers and multiple lines of therapy. Similarly, in Study 006, we expanded into three additionalcohorts, beyond the original trial to now 460 patients, again across multiple lines of therapy. We have previously showed updates on both trials,and look forward to greater maturity of the survival data from Study 006.

Please turn now to slide 15. We now move on to MYSTIC. Our first of two IO/IO trials in first-line non-small cell lung cancer. This is a trial which Iguess, needs no introduction to some of you. Following trial changes communicated in February this year, both progression-free survival andoverall survival are co-primary endpoints, which along with a much larger trial size increases the strength of the trial to demonstrate the benefitof any of the two experimental arms, combo or durvalumab monotherapy versus standard of care chemotherapy.

As mentioned before, first, the MYSTIC trial could potentially provide a monotherapy label for durvalumab. Second, the MYSTIC trial enrolls all-comerpatients, but has the potential to analyze PD-L1 positive and PD-L1 negative patients enrolled on a separate basis. PD-L1 positivity has traditionallybeen defined as more than 25% tumor cell staining in other durvalumab and durva + treme clinical trials.

It is possible to change the statistical analysis planned for the MYSTIC trial, for as long as the trial remains blinded to the Company with no analysisperformed. In making the decision on such a change, there is flexibility to consider available external data, as well as available data from otherAstraZeneca trials, including Study 1108, Study 006 that we just discussed, and ATLANTIC, our Phase II trial of durvalumab monotherapy in third-linePD-L1 positive metastatic non-small cell lung cancer.

In short, primary endpoints are progression-free survival and overall survival, with overall survival having received greater emphasis with its elevationto a co-primary endpoint. The principal strategy is combination durva + treme, and the trial can also assess the efficacy of monotherapy. There isan ability to look at all-comer patients, as well as patients who are positive for PD-L1.

Since Q3 2015, the MYSTIC trial has enrolled about 1,100 patients, with the last patient having commenced dosing in early Q3 2016. Timelines didnot change. The progression-free survival data are expected during the first half of 2017, and the final overall survival data latest in 2018. NEPTUNE,the second first-line metastatic non-small cell lung cancer trial, is expected to have overall survival data available in 2018.

Please turn to slide 16. A few days ago, we announced that the FDA had accepted the first biologic license application for durvalumab, and grantedus priority review status with a PDUFA date in the second quarter 2017. The BLA submission was for the treatment of patients with locally advancedor metastatic urothelial carcinoma, whose disease has progressed during or after one standard platinum-based regimen. This is based on the resultsof the urothelial cancer cohort of Study 1108, and follows the FDA's Breakthrough Therapy Designation for durvalumab in bladder cancer grantedin February.

As a reminder, Study 1108 is a Phase I/Phase II multi-center open-label dose escalation and dose expansion trial investigating the safety and efficacyof durvalumab in adult patients with inoperable or metastatic solid tumors. Urothelial carcinoma is the most common kind of bladder cancer, andaccounts for more than 90% of bladder cancer cases worldwide. Urothelial carcinoma is an area of significant unmet medical need, and platinum-basedchemotherapy is the current standard of care for urothelial carcinoma patients with inoperable or advanced metastatic disease.

As part of a broad development program, durvalumab is being tested as monotherapy, and in combination with tremelimumab in the Phase IIIDANUBE trial, as first-line treatment for patients with metastatic urothelial carcinoma regardless of eligibility versus [platin-based] chemotherapy.We expect DANUBE data in 2018, and we believe we are leading the field with the IO/IO combo in first-line.

Please turn to slide 17. This slide illustrates the key Phase III data readouts that you should expect to see from our mono and combo immuno-onocologyportfolio through 2018. Last month, we resumed new patient recruitment with head and neck cancer in clinical trials of durvalumab as monotherapy,and in combination with tremelimumab or other potential medicines. As a reminder, the partial clinical hold on new patient enrollment relatedonly to head and neck cancer. I would like to thank all of my AstraZeneca colleagues who put patients first, and worked incredibly hard to quicklyrestart enrollment in these trials.

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We have gotten the first and early data from the CONDOR trial, a randomized non-controlled Phase II trial in PD-L1 negative head and neck cancerpatients. While we are still analyzing the data, we do not think this non-controlled trial can facilitate a regulatory submission. The approval in theUS for a PD-1 medicine in the second-line setting based on an overall survival benefit in all-comers has significantly increased the hurdle fornon-controlled Phase II trials such as CONDOR. We will therefore await the randomized and controlled Phase III trials in head and neck, namelyKESTREL in first-line and EAGLE in second-line treatment.

As previously mentioned, we also expect to hear back from the FDA in Q2 next year about durvalumab monotherapy in bladder cancer. A potentialfirst approval of durvalumab in bladder cancer could help accelerate time lines for the other indications listed on this slide, as subsequent applicationswill take shorter time to review, and the agency would be familiar with manufacturing and other important aspects. We will be sharing more detailswith you as we progress here, and we remain delighted about this first step in bringing Durvalumab to patients.

Please turn to slide 18. The final opportunity in oncology today is acalabrutinib. Here you can see the data that we've presented in the last 12months.

Down the left side is the ASH 2015 data in relapsed/refractory CLL. In the middle, is the front line data that we presented at ASCO this year. I wantto highlight the encouraging overall response rates, 85% at ASCO -- at ASH, I'm sorry -- 2015, and 88% at ASCO.

We also presented early data with respect to ibrutinib-intolerant and Richter transformation patients at ASH last week. We will follow up further,but these are very good Phase I data. The right hand table gives an overview of the clinical development plan for the major indications that we'refocused on.

Further, we are pleased to announce the addition of another Phase III trial to the acalabrutinib program, namely acalabrutinib versus idelalisib plusrituximab or bendamustine plus rituximab in relapsed/refractory CLL, with data expected in 2020. We expect a data readout on a Phase II B-cellblood cancer in the first half of 2017. As always, there are the usual caveats around non-randomized non-controlled Phase II trials.

Please turn to slide 19. I now want to focus on our opportunities in cardiovascular and metabolic diseases.

Please turn to the next slide. We have a broad and compelling platform of programs, both launched and in development to address the long-termrisk factors associated with cardiovascular and metabolic diseases, from heart disease to type-2 diabetes to kidney disease. We are taking a holisticapproach to improve long-term outcomes for the world's aging population, and address the late complications of progressive type-2 diabetes.

Please turn to slide 21. On Brilinta, in 2015 we saw data readouts from two Phase III trials in stroke and in peripheral artery disease. In SOCRATES,the stroke trial, Brilinta was compared to aspirin, and while fewer events were seen with Brilinta, the trend did not reach statistical significance. InEUCLID, Brilinta was compared to the active comparator, clopidogrel, and was not shown to be superior in patients with peripheral artery disease.

Despite these disappointments, we saw a positive recommendation for Brilinta being preferred over clopidogrel in the US for acute coronarysyndrome, and the extension of our label for post-myocardial infarction in Europe for continued use for one year after a heart attack. We continueto follow the science with Brilinta, and are currently on track with the THEMIS trial in 19,000 patients with type-2 diabetes and a composite MACEendpoint. We anticipate this trial to readout in 2018.

Please turn to slide 22. Turning now to diabetes, we recently saw promising data from the combination of Farxiga and Bydureon in the DURATION-8trial. We saw decreased hemoglobin A1C levels, in addition to a reduction in both weight and blood pressure, compared to each medicine usedindividually.

We plan to utilize the DURATION-8 data to submit for label updates for both Farxiga and Bydureon as quickly as possible. Additionally, the currentdata show a continuation of the weight loss effect. And once we're able to look at the longer 52-week data, we will evaluate the potential foradditional weight loss benefits for these patients.

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Lastly, in addition to the DECLARE trial, which we anticipate to readout in 2019 at the latest, we announced earlier in the year, our continuedinvestment in outcomes trials for Farxiga. Two trials will begin shortly, in chronic heart failure and chronic kidney disease for patients both withand without Type-2 diabetes.

Please turn to slide 23. Moving now to Bydureon. We're looking forward to the submission of our single chamber auto injector in the first half of2017. As you know, Byetta was the first GLP-1 on the market, and we were also first with the once-weekly injection of Bydureon.

Now with this innovative device, we will be able to improve the patient experience due to the hidden needle that is pre-attached. We believe thiswill reduce anxiety for patients, as they do not have to attach a needle or see it during the injection process. When the patient presses the newauto-injector against their skin, the needle deploys, and is then covered by a needle guard, so it is never seen. We are also looking forward to sharingthe results of our EXSCEL cardiovascular outcomes trial expected in 2018 at the latest.

Please turn to slide 24. Turning now to ZS-9, I want to take this opportunity to remind you of the potential for providing a best-in-class treatmentfor hyperkaleemia. You can see on the slide, the scale of the unmet medical need, with up to half of patients with chronic kidney disease sufferingfrom hyperkaleemia. ZS-9 acts as a highly selective potassium trap, is administered orally in 5 to 10 gram doses, mixed with three tablespoons ofwater. It is not systemically absorbed and is excreted in the feces.

Further, ZS-9 has a rapid onset of action, and the medicine is stable at room temperature. All together these are important benefits for patientsand physicians, and therefore competitive advantages. These factors make us excited about the potential approvals in the US in Q1, and in the EUduring the first half of next year.

Please turn to slide 25. Lastly in CVMD, I would like to provide a status update for roxadustat, our potential first-in-class treatment for anemia, inchronic kidney disease and end stage renal disease. Our partner, FibroGen, is making good progress with trials in China, initiating the rollingsubmission this quarter, and utilizing the expedited domestic regulatory pathway. In the US, our regulatory submission will be based on the pooledsafety data from all trials, including those being run by both FibroGen and Astellas. We anticipate the US regulatory submission in 2018.

Now I'd like to complete the review of our three main therapy areas, and tell you about our late stage program in respiratory. Please turn now toslide 27. This table depicts the current treatment guidance from the global initiative for asthma, where medicines are stepped up or stepped down,based on the patient's current level of asthma control.

I am pleased that we have a compelling portfolio of medicines that addresses all aspects of asthma control. With the positive data from the trialsfor the SIROCCO and CALIMA trials for benralizumab, we're now able to address steps four and five, which relate to severe asthma where higherdoses of existing medication, or the addition of new medication may be required. Next slide, please.

Asthma is a common disease affecting approximately 350 million people worldwide. Severe asthma is a term applied to asthma that requirestreatment with high dose inhaled corticosteroid-based therapy, combined with other asthma medications. Severe asthma is estimated to be presentin approximately 1 in every 10 asthma patients.

Patients with severe asthma account for more than half of the costs associated with asthma. Patients with uncontrolled severe asthma generateannual costs almost 3 times those of similar patients with controlled disease.

Benralizumab targets the IL-5 receptor which sits on the surface of the eosinophil. It causes more complete elimination of eosinophilic inflammation,and best represents a new treatment option for severe asthma patients.

The recently published data from the SIROCCO and CALIMA Phase III clinical trials for benralizumab demonstrated the potential benefit of addingbenralizumab to standard of care therapy for patients with severe uncontrolled eosinphilic asthma. The improvements you can see here wereobserved after the first dose, and sustained throughout the duration of therapy. These results were obtained with once every 8-week dosing ofbenralizumab using a prefilled syringe for subcutaneous injection, which may be more convenient for patients than other IL-5 options currentlyavailable.

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Please turn to slide 29. Tralokinumab has the potential to be a first-in-class anti-IL-13 biologic that specifically blocks IL-13, a central mediator ofdisease in about 50% of severe uncontrolled asthma patients. To reach the broadest patient population, we anticipate that a companion diagnosticwill be required for Tralokinumab to reach its full potential.

I'm often asked, why do you believe in IL-13, and what are the key differences between the competitor's LAVOLTA and your STRATOS program?There are a couple of points I would make in this regard.

First, patients enrolled in STRATOS have a documented history of two or more exacerbations in the prior year. Second, the novel biomarkers,periostin and DPP4 are included in a sequential analysis of the two pivotal trials to determine the most predictive diagnostic for response.

The biomarker that has the best predictive response will be chosen from the STRATOS 1 data and confirmed in STRATOS 2. The choice of biomarkercould be either periostin, DPP4, or a combination of the two.

In the Phase IIb trial, we looked at eosinophil levels as a predictor of response, and it was shown to be less predictive than either periostin or DPP4.However, for completeness, both eosinophils and exhaled nitric oxide or FENO are included in our Phase III trial for exploratory analysis. We anticipatethat tralokinumab will deliver important benefits across a range of asthma control endpoints, with anticipated first data in the second half of 2017and regulatory submission in 2018.

In addition to the upcoming launch of Bevespi, we're looking forward to getting the closed triple medicine PT010 to market in both COPD andasthma. There is a significant unmet need in COPD patients that is well-established, with around 40% to 50% of patients treated with inhaledcorticosteroids or ICS or long-acting beta adrenergic receptor agonists or [LABA], receiving an add-on medication in the form of a long-actingmuscarinic antagonist or LAMA. The differentiating factor for PT010 will be the pressurized metered dose inhaler from Pearl, with a fast onset andinclusion of budesonide. First data in the second half of 2017.

Finally, tezepelumab, an anti-thymic stromal lymphopoietin biologic or TSLP is the first epihelium targeting medication with potential differentiatedefficacy with patients with moderate to severe asthma. We are currently potentially exploring the potential efficacy of tezepelumab in severeasthma in the Phase IIb study PATHWAY, a three arm trial versus placebo, and we anticipate data in 2017. We will then discuss with our partnerAmgen about next steps.

Please turn to slide 30. So far we've looked at our three main therapy areas. Now I want to briefly look at two other late stage pipeline opportunitiesthat often get overlooked. Please turn to the next slide.

Lupus is a chronic severe autoimmune disease. The unmet medical need is very high, and we're very encouraged about how well the anifrolumabTULIP program is progressing in systemic lupus. The data on this slide is from the Phase II anifrolumab trial, where we showed a doubling in thepercentage of patients who achieved a SRI4 response at day 365, in the 300 milligram dose group relative to placebo. The trial also demonstratedconsistency across multiple disease activity endpoints, as well as improvements in organ-specific measures such as in the joints and the skin.

The anifrolumab development program includes an additional personalized health strategy to best identify which patients will respond better toanifrolumab relative to standard of care based on an interferon gene signature test. As you can see the majority of the SRI4 response is driven bythe subset of patients who have a high interferon gene signature. We anticipate the completion of enrollment next year and final data in 2018. Wealso have an ongoing Phase II program in lupus nephritis, and recently completed a Phase I trial initiating the development of our subcutaneousroute of administration.

Please turn to slide 32. Our BACE inhibitor has the potential to be a novel disease modifying treatment for patients with early Alzheimer's disease.Given the setbacks with other medications, one may say that the BACE inhibitor class is now the next and best hope for patients. BACE cleavageof the amyloid precursor protein or APP is the first step in the amyloid cascade. This is a different mechanism of action, than that of the amyloidbeta targeting antibodies, and is a mechanism underpinned by strong genetic evidence.

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Robust target engagement was observed in Phase I in both human volunteers and Alzheimer's patients with significant and dose dependentlowering of beta amyloid. The Phase II AMARANTH trial passed a safety review in April, and progressed to Phase III. We also initiated another PhaseIII trial this year, namely DAYBREAK-ALZ in patients with mild Alzheimer's dementia.

Along with our partner Eli Lilly, we've received fast-track designation for AZD3293 in August, and are excited about the opportunity we have giventhe very high unmet medical need, and the burden for patients and their families. You may have also seen, that we recently announced that weare developing another potential Alzheimer's medicine with Eli Lilly, MEDI1814, a so-called amyloid beta 42 antibody, a more specific form ofantibody currently in Phase I.

Please turn to slide 33. Before we go onto your questions, I would like to complete the presentation by summarizing the large amount of late stagepipeline news flow that we anticipate in 2017 and 2018. Next slide, please.

Looking at the first row on this slide, you can see many potential approvals and launches across the therapy areas and regulatory jurisdictions.First, we are looking forward to durvalumab in bladder cancer. I also want to highlight the opportunities we have for Tagrisso, ahead of the first-linedata in the second half. In CVMD, I'm especially excited about the prospects for ZS-9 in the US and the EU.

In the second row of the slide, we can see the sheer number of anticipated regulatory submissions coming up. Unsurprisingly, oncology willdominate the headlines, with potential IO submissions in lung, head and neck, and bladder, alongside the first-line data for Tagrisso, submissionsfor Lynparza in ovarian and breast, and the potential fast to market regulatory submission for acalabrutinib.

I also want to point out other data readouts in the third row, including roxidustat in anemia, Brilinta in diabetic patients, the triple inhaled medicine,PT010 in COPD, and anifrolumab in lupus. It will be a busy period, but one which we're clear on what we want to achieve, as we build and growthe new AstraZeneca. Thank you so much for listening to the presentation. Please turn now to slide 35.

It's now time for you to submit your questions, please dial star 1 to ask a question. As Thomas mentioned earlier, I have several of my colleaguesready to help with the questions. Please note that we have a prize available for the first question that is not about the MYSTIC trial.

Now, I know we've asked this before, but I'd be grateful if you could keep to one question per turn. We'd love for everyone on the call to have anopportunity to ask their question. We can always then do another round, if time permits. Thank you again.

Q U E S T I O N S A N D A N S W E R S


Okay, we have our first question from Sachin Jain at Bank of America.

Thomas Kudsk Larsen - AstraZeneca PLC - Head of IR

Sachin, please go ahead.

Sachin Jain - BofA Merrill Lynch - Analyst

Hi, thanks a lot. And a question on IO for me. So just on 006, where you've mentioned that no survival assessment is possible as yet. Can you justcomment, does that mean you've not reached median peer for PFS or OS despite two years of follow-up, and what we can infer from that, andwhether you've looked at 6-month and 12-month PFS and OS rates. And if you have looked at them, if you can give any color as to how they'relooking versus the CheckMate-012 data which we saw at ESMO? Thank you.

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So thank you for the question, Sachin. Unfortunately, we can't really reveal anything more specific. We have to reserve that obviously for a scientificcongress, and what we are doing is we're waiting for data maturity, and I guess, you can infer from that whatever you like. We want to be able topresent data with an adequate level of maturity that people can really infer from what we have in 006, what they may be able to expect from ourpivotal programs, and we just have not seen that level of maturity yet.


Can I just take one follow-on? Are you waiting for that data to mature, to record, deciding what to do with MYSTIC statistical analysis, or is itindependent of that?


Right. So there are two separate things here, I think, and you're absolutely right to separate them out. One is looking at the data, and being ableto use that data to inform how we would like to analyze the MYSTIC data, and what we think is the most meaningful analysis to do. That's somethingthat we do. That's ongoing, and that's an internal activity.

The question I answered before had to do with the maturity, really within 006 to be able to present a picture, and give everybody an idea of ourIO potential in non-small cell lung cancer. So those two things are separate, and actually time-wise are separate.


Thank you.


You're welcome. Thank you. Let's go on now to Seamus Fernandez from Leerink.

Seamus Fernandez - Leerink Partners - Analyst

Thanks very much for the question. So I hate for this to be a repeat of the same question, but in terms of the three expansion cohorts beyond theoriginal trial in Study 006, can you specify a little bit more, just sort of the relative size of the first-line expansion cohort within the context of those460 patients? And then, is there an idea of when perhaps we might see those data from the 006 study?

And then just a quick follow-up on the acalabrutinib opportunity. I know you guys continue to say that this is a blood cancer. Is it accurate to thinkthat mantle cell is the most sensible one because there's an accelerated approval there if, whereas it's mostly full approvals for other indications?Or are there potentially other indications beyond mantle cell lymphoma that could facilitate an early filing? Thanks.


Okay. So let me first go to 006 and first-line. We haven't specified what number of patients. We have revealed that we have first-line patientscontained in 006, we have not specified what number or percentage we have there. And so, we're not going to do that right now. With regard totiming, which was your other question within that, timing of sharing the 006 data.

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And what we do, is we wait until we are accepted at a Congress. And then, we, when we have acceptance of that abstract, we're able to give youthe name of the congress. And then, obviously, you'll get the date, and know what to look for. But prior to our acceptance at the Congress, we tendnot to give the timing, because we aren't sure until we get that acceptance. So that's where we are unfortunately.

The next question was about acalabrutinib and accelerated approval. The reason that we haven't specified is because there are multiple opportunities,and it's an evolving data picture, and as well an evolving regulatory landscape, which you also brought up in your question, and it's quite appropriate.And so, we've left it as blood cancer because we see more than one potential path. I think once we are more confirmed, that there is a specificopportunity, should it arise and should the data support it, then we'll be able to come back to you, and be very specific about where we're goingfirst.


Okay. Thank you.

Operator

Can I -- we'll go now to Luca Issi from Cowen.

Luca Issi - Cowen and Company - Analyst

Yes. Thank you for taking my question. Luca Issi, Cowen and Company on behalf of Steve Scala. Just have two quick questions. So the first is, whatare your expectations for the durvalumab label in bladder cancer? If I recall you correctly, the data at ASCO showed no responses in the PD-L1negative cohort of this study. So I just wonder if it's fair to assume that initial approval will only be in PD-L1 positive patients? And then the secondquestion is just more like high level. What is your take on Bristol's recent decision to add a chemo combo arm to their pivotal study in lung CheckMate227? Is the lack of such an arm in MYSTIC a potential vulnerability for this study? Thank you.


Thanks for the question. So let me start with durva bladder. And then, I think maybe, what we'll do, is we'll give Rob a chance to talk to you aboutBMS and IO chemo combos, which was your second question. So let me start first with the durva bladder, so a couple things about that. And thiswill probably be pretty obvious, but it's good to make explicit.

We have more data than we've shared publicly on durvalumab in urothelial carcinoma, and we're able to support the filing with that data, andshare that data with the regulators. There's been a bit of a lag. We will, of course, present it publicly at the next opportunity to do so at a scientificCongress.

So we don't speculate on what the label will be. That's really an interaction with regulators, and it obviously depends very strongly on their judgmentof what they are seeing in the data. We're very encouraged that they've accepted the filing for accelerated approval. And the only thing I can sharewith you, is they've seen more, and we've seen more, than we've been able to share so far. But we'll try to get that in front of everybody in a timelyfashion, at a scientific Congress. With that let me pass over to Rob for the answer to your second question, which was the addition of IO chemo byBMS to their trial, and maybe a little bit on our strategy around that. Rob?

Rob Iannone - AstraZeneca PLC - Head of Immuno-Oncology, Global Medicines Development

Sure. Thank you, Sean. Just to add one detail on the bladder data published at ASCO. Certainly, the data we published shows activity even in PD-L1negatives. By RECIST 1.1 criteria, we were showing 0%, but clearly the waterfall shows activity. And so, while the biomarker does have predictivevalue, we feel there's activity even in the PD-L1 low negatives, just to clarify that point.

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And then to the question of IO chemo, I would just like to reiterate that our strategy is durva treme as a priority in first-line lung cancer. We feelthat there's an opportunity to replace chemotherapy, and all the potential negative side effects from chemotherapy with a better regimen. Havingsaid that, there may well be specific patient populations who would benefit from getting chemotherapy earlier in their treatment course. And theremay be some physicians who want that as a treatment option. And so, we're looking carefully at the data that we're generating, some of whichwere recently published in the CCTG trial to really understand how we can best differentiate in two ways. One, by leveraging a combination withboth durva and treme with chemotherapy, and also to understand the patient populations who might derive the most benefit from receivingchemotherapy up front with immunotherapy.

Luca Issi - Cowen and Company - Analyst

Thank you.


All right. Well, thank you, Luca. Thank you, Rob. We have now -- we have two questions that were e-mailed in, and they're both respiratory questions.So Colin, I'm going to go ahead, and refer them to you. And I'll give them to you one at a time, so you only have to think about one at a time.

I'll start with one from Eric Keisman at Capital World. And Eric is asking about the PT010, the closed triple. His question is, doesn't the new GOLDguideline reduce the opportunity for the closed triple?

Colin Reisner - AstraZeneca PLC - Head of Respiratory, Global Medicines Development, Chief Medical Officer, Pearl Therapeutics

Thank you, Sean, and thank you for the question, Eric. The -- interestingly, the GOLD actually acknowledges the benefit of escalation to triple therapyfor those patients who are still exacerbating despite a LAMA/LABA, or those who are still symptomatic on an inhaled steroid long-acting betaagonist. Importantly for us over the next two years, data from our randomized controlled trials, from our triple program namely CHRONOS andETHOS will readout, and will provide a lot more information on that. And add to that effect, we're really excited about our triple product.

Several components that we think are very competitive. Firstly, it's in our pMDI formulation which you alluded to earlier, Sean, known as (inaudible)co-suspension delivery technology, and that ensures the drug delivery to the lung. The other feature of our PT010 program is it's the only fixed-dosetriple combination evaluating two doses of inhaled steroids. And again, getting to those GOLD guidelines, we'll be able to answer quite a lotquestions on that front. Our triple contains budesonide, which many of you know has a very solid benefit risk profile. We have two fast-actingbronchodilators that have been well-established, and the twice-daily administration will result in both morning and evening, peak FEV1 that willdeliver relief to COPD patients when they need it most. Following on, we have some very robust plans for our Phase IIIb and IV to drive furtherdifferentiation versus (inaudible) and GSK's triples, and we'll announce those post the Phase III readout.


Great. Thank you, call Colin. I'm not going to let you rest very much here. I'm going to move on to Marietta at Prime has a benralizumab basedseries of questions. So I'm going to read the whole thing to you, and then give you a chance to address.

So Marietta said, benra comment on the regional differences in the pivotal trials. In those regions where no effect was seen, was that due to strongplacebo effect, or did the treatment group get no benefit? Speculate on reasons? What happens to the effect size, if you strip out the regions? Andthat's the full question.

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Colin Reisner - AstraZeneca PLC - Head of Respiratory, Global Medicines Development, Chief Medical Officer, Pearl Therapeutics

Thank you. Thanks for the question. There was regional effect across the CALIMA program, we saw a reduced exacerbation rate in the placebogroup, and this was more marked in several regions, mostly in eastern Europe. When we either remove those groups, or more importantly, whenwe look at those patients who had three or more exacerbations in the year prior to entry, we saw a more marked effect, and that more consistentacross both programs.

Again, we're very excited by the profile of benralizumab, meeting the needs of patients on many fronts, including the reduction of annual exacerbationrates, the reduced use of oral corticosteroids. Importantly, you can see a significant improvement in lung function, actually saw that in both studies,and with a FEV1 improvement of up to 159 mls seen after the first dose, and assessed four weeks after the initial dose. We also see a significantimprovement in asthma symptoms across the board, and such as wheeze, cough, chest tightness and shortness of breath. And actually, we're reallyexcited over and above all of this, is we have a dosing administration that could result in dosing patients every two months in a convenient pre-filledsyringe, which certainly would be welcomed by both patients and physicians.


Thanks a lot, Colin. We're going to go back to the phones now. I have a question from Simon Baker at Exane. Simon?

Simon Baker - Exane - Analyst

Thanks for taking my question. I'll move away from IO and onto ZS-9. I wonder if you could comment on the clinical implications, for the differentselectivity profile of ZS-9 versus Veltassa, the fact you don't appear to sequester magnesium and calcium ions, but you do see some sequestrationof ammonium, which can raise bicarbonate levels. So how does that -- how do you think that manifests itself in the overall clinical profile versusthe key competitor? Thank you.


All right. So thank you for the question, Simon. I'm going to pass on to Elizabeth Bjork, our head of CVMD Before I give Elisabeth a chance to answeryour very specific question, I just want to remind everyone that we really see ZS-9 as potentially best-in-class. And a number of factors relate intothat including drug-drug interaction, the ability to dispense it very, very quickly because it's stable at room temperature, so it doesn't have a complex-- it doesn't have to have a complex distribution. But I'll let Elisabeth, if you could, go ahead and answer Simon's questions about selectivitydifferences versus Veltassa?

Elisabeth Bjork - AstraZeneca PLC - Head of Cardiovascular and Metabolic, Global Medicines Development

Thank you, Sean. And it's a main differentiator, the fact that ZS-9 is very selective. That's of course, an advantage, as you will only trap potassium,and not the other the ions, and you see that also in the clinical profile that you will have less of hypermagnesemia, and not so much effect on theother ions. So we do see this as being a clinical benefit that will benefit patients in the end that ZS-9 is so selective.


Thank you very much, Elisabeth. Can we now move on to Tim Anderson from Bernstein. Tim?

Tim Anderson - Bernstein - Analyst

Thank you. If I can ask about MYSTIC. You made the comment suggesting you'll allocate more alpha to overall survival versus PFS, and I think you'vemade those suggestions in the past. Is this because you view overall survival really as the must-have item here, so you don't want to take any

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chances, and therefore you're going to put more alpha behind that? I'm guessing, there has to be some concern with overall survival because ofcrossover and maybe even powering. But if this is correct, and it's suggested hitting PFS might be more in jeopardy by virtue of having less alpha?So can you maybe talk about why you're emphasizing OS more than PFS? It seems that there's various ways that we can interpret that.


Yes, that's a great question, Tim, thank you, and I'm happy to spend a little time on it. So I think the IO field in aggregate, what we're seeing is thatOS is really the gold standard endpoint to define the benefit derived from immunotherapy for oncology. And I would say we feel that way withindata we've seen within our programs, but not unique to that at all external data, I think over time is really emphasizing that. It's different in differentdisease types. I think it's particularly true for instance, in head and neck cancer where response rate and progression-free survival have sometimesnot shown any evidence of benefit. And then, when you turn around, and look at overall survival, you see that the PD-1 targeting agents are givinga benefit to patients, with a decent hazard ratio and nice tolerability.

In lung cancer, it's a little more mixed. PFS definitely has some ability to capture the benefit, but again, we still think that overall survival is thebetter endpoint to capture the benefit that you derive from IO. The next part of it has -- there was another part of your question which I think italso does figure into it, which is of course, overall survival is the gold standard. If you see the survival benefit, that will be the strongest thing ingenerating regulatory confidence, that this is a good therapy, patient and prescriber confidence, that this is how you should treat patients. So thatfigures in as well.

The last part is some detail we haven't gotten to in terms of their risk. I think it was in your question, is there a risk, by virtue of elevating overallsurvival that we somehow or another underpower progression-free survival? And I think there would be, if we didn't make the trial a lot larger,right? So we've took MYSTIC from 700 to almost 1,100 patients, at the same time that we made this judgment to elevate overall survival. And I thinkthat, that then allows us to have an ability to have an ability to look at the multiple primary endpoints, and be adequately powered for a meaningfultreatment effect for the -- for both PFS and overall survival.


Can I -- but when I look at -- when you increased the size, I mean, that was all pre August 5. And it's really downstream of August 5, that kind of theworld changes, and you guys are certainly entertaining possible changes to the statistical analysis plan. So you were powered, I think, appropriatelywhen you had a less elevated to a co-primary pre August 5, but it just makes me wonder, if there can be a powering issue? And again, maybe thatgoes back to why you're feeling the need to put more alpha behind OS versus PFS?


We're confident in the trial, and size of the trial and the way we're designing it. So we -- it's not so much August 5, as a change to the power, andwhat we needed in terms of the number of patients. It's more what we're seeing both internally and externally, in terms of scientifically, where dowe think we'll derive the greatest benefit of both monotherapy and IO/IO combination therapy in first-line patients with non-small cell lung cancer,and how do we analyze MYSTIC's data in order to best reflect that? And that's the scientific principal that we're using to guide how we analyze thedata.


Thank you.


Okay. Next moving onto Trung Huynh from Credit Suisse.

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Trung Huynh - Credit Suisse - Analyst

Hi. Thanks for taking my question. Just a straightforward one for me. With all your developments highlighted, some late stage studies rolling offand some beginning, how should we think about your R&D costs moving forward?


Yes, I think we provided some guidance on this. I mean, we feel like we are dedicating a very, very healthy amount of resources to R&D, and thatwe will roughly maintain the amount of resources that we are dedicating. We will, of course, in February as we move to full year results, be able toprovide some more specific guidance to you, as we do that webcast, and then also that call. And then also, I can meet with you, many of youafterwards.

Can I move to -- I'm going to go on to a question that has come online. And Rob, I'll give you a head's up. So listen carefully. This one is going tocome to you. So we have Marie-Helene at Amundi has a very specific question about the PD-L1 positive threshold from MYSTIC. So her questionis, can you discuss whether the Definiens technology plays a major role in adding to the information you gather from studies 1108 and 006 for adecision around the PD-L1 positive threshold for MYSTIC? Rob?

Rob Iannone - AstraZeneca PLC - Head of Immuno-Oncology, Global Medicines Development

Thank you for the question, Sean. So just want to remind folks that the Definiens technology allows us to integrate information that we're gettingbased on immunohistic chemistry, specifically allowing us to look at multiple dimensions. Not just PD-L1, but also PD-1, CDA, and really anythingwe can conceive of. For the most part, that technology is being used for next generation biomarker development. So specifically, the Definienstechnology is not likely to impact how we think about the MYSTIC trial per se, or a cut-off within the MYSTIC trial. (multiple speakers) Thank youvery much, Rob. I'm going to go back to the phone now. James Gordon, JPMorgan. James?

James Gordon - JPMorgan - Analyst

Hello. Thanks for taking my question. If I heard correct, that you won't be filing on CONDOR, which is the combo study, or the study that includesa combo in PDL negative head and neck cancer. But my question was, could we assume from that, that you didn't see strong efficacy for the comboin negative patients, and does that change how optimistic you are about the combo showing a benefit in PDL negative patients in KESTREL andEAGLE? And if I could squeeze one other little one, just thoughts on the AbbVie PARP data for their part in breast cancer which didn't work in PhaseII, and whether that has any read-through to your Lynparza Phase III in breast cancer?


Yes. So let me -- so I'm going to do two things. One, I'm going to give Klaus Edvardsen, our Head of Oncology, a little bit of a head's up, becauseI'm going to take your AbbVie PARP inhibitor question, and I'll say a couple words about that, after I talk about CONDOR. And then, I'm going togive Klaus a chance to answer your question. So the question with regard to CONDOR.

So the regulatory landscape here had changed quite significantly, as we were going through this. And I think we've always been very clear witheveryone that, that these accelerated approval on Phase II non-controlled data, is really subject to someone not getting full approval based onstrong data in that same indication. And as we well know, what happened over the course of time, was there's full approval of anti-PD-1 in headand neck squamous cell carcinoma.

It does not limit to a particular PD-L1 expression status, and it's based on overall survival. And so, that really significantly increases the bar foranybody to be able to go with data for an accelerated approval. That's basically what came to pass over the course of this past quarter, and it justreally raises the bar for us. And we'll share the data with you, when we have an opportunity at a scientific upcoming scientific meeting.

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I'm now going to move onto your AbbVie question, interesting question. The one thing I want to point out about the AbbVie PARP inhibitor trialis that is a very, very -- it is always a challenge, when you're making cross trial comparisons. But in this case, it's really challenging, because thedesign of the trials, it's so very, very different than what we've done with our SOLO trials. And I will go ahead, and now refer it to Klaus for someadditional answers for the AbbVie PARP inhibitor trial.

Klaus Edvardsen - AstraZeneca PLC - Head of Oncology, Global Medicines Development

Sorry, James, I was there, for a second believing that oncology was only immunoncology. So I didn't quite catch your question. So if you couldrepeat it please?


So my question was just -- I saw that AbbVie reported disappointing data. I think it was the BROCADE study, which was the Phase II study, so thatwas their PARP on top of chemo in breast cancer, and that didn't show a statistically significant benefit on overall survival or PFS. I think the otherthing was just powering, but the magnitude of the efficacy didn't look that strong. So should we worry that the same thing could be true forLynparza in breast?

Klaus Edvardsen - AstraZeneca PLC - Head of Oncology, Global Medicines Development

I mean, as Sean was alluding to the design of the two trials are so fundamentally different here, by adding the PARP inhibitor on top of chemotherapyin that trial. So I don't think you can make that comparison directly to our OlympiAD. Obviously, we expect to see results from that trial early nextyear, and I am very confident that based on what we have seen up to now from our SOLO-2 data, that PARP inhibition also in metastatic breastcancer would be of a magnitude that would be important.


Thank you.


All right. Thank you, James. Let's go ahead and go onto Eric Keisman at the Capital Group. Eric?

Eric Keisman - Capital Group - Analyst

Hey, Sean, can you hear me?


We can.


Great. So listen, forgive me for a little bit of a testy question, but I think it's something that's on lot of investors' minds. Bristol has been sharing dataon their preliminary CheckMate-012 trial at pretty much every eligible conference throughout the year, it's like a perennial. And I feel like we get

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an update every few months, and that doesn't seem to stop them from getting top billing in oral sessions. So it's not like one would have to savethis data up to get good placement.

And if you've -- given the average time to response, it's just a few months. It's hard for me to imagine that you don't have a lot of response ratedata on the combination, the cross lines of therapy. So the only explanation I can come up with, as to why you haven't shown us any of yourfollow-up data is that, kind of like with Roche's PD-L1 in first-line in BIRCH, your response rate data is not as compelling, and you're counting onPFS and OS to really prove out the benefit of this combination. Is that a reasonable interpretation?

And a quick follow-on. On MYSTIC, you'll have 12 months of follow-up on every single patient by May-ish this year or so. So your survival curveshould be pretty mature, in terms of the number of patients at risk, and the KM curve is out to 12 months. So if you've got a benefit that you don'thave to squint to see, it should be evident when you look at the data for PFS. So can you look at OS at the same time, and is that a reasonableexpectation?


Let me, thank you, Eric. Let me first go with the question about 006 data and presentation. As I alluded to before, we, the response rate I think canbe meaningful, PFS can be meaningful in lung cancer. We're hopeful. We got it as a co-primary in MYSTIC obviously, but we really do believe thatthe durations of responses and survival are things that capture benefit in IO. And so, I think that's what we're waiting for. That's what we're goingto wait for, and you can interpret, however you like with regard to that approach.

I do think there's probably a stylistic difference here as well. We, I, over the course of the past week, had a number of investors and analysts comeand say, where did bladder cancer come from? And why are you telling us now? You didn't talk about it before, and we did that on purpose. It'snot completely true, we didn't talk about it. We announced the Breakthrough Designation in February when it was granted. But then we did goquiet for a bit, until we felt like we really had something to communicate that was meaningful. And we felt that the acceptance of filing doesn'tguarantee approval, but was a really meaningful thing to be able to share with everyone.

Again, we're going to communicate when we believe it is most meaningful. We probably won't do it at every meeting that you can present at. Nowgo ahead, Eric, and repeat the second one for me, MYSTIC OS?


The second question really has to do with the fact, that based on when you finished enrolling your study, right? That your Kaplan-Meier curves, Imean, you'll have -- almost all of the patients will be at risk in your curve at 12 months by something like May or June this year. If you look at thecurves that demonstrate an OS benefit in Merck's study, they had a lot fewer -- there was a lot less median and overall follow-up for survival. So it'shard for me to imagine that you won't have a pretty good robust sense of the survival benefit in the first half of this year. So help me understandwhy we have to wait till next year, and whether it's possible that we can see an OS look when you -- that OS could show, when you look for PFS inthe first half?


Yes. So let me talk a little bit about the MYSTIC trial and its enrollment, because I think I can shed some light on this. As you appreciate, we, earlierin the year decided to significantly increase MYSTIC, and that gave us the power to be able to elevate overall survival, and be able analyze both ofthese endpoints. And as we have also talked about, we're also looking at cut-off, and what we think is best to do there.

The complexity of what we did is that a huge number of patients enrolled in the past five to six -- in the last five to six weeks of enrollment. So ifyou look at the maturity of the trial and when events occur, it's not really right to look over the whole enrollment period, and think that you havethe patients at risk. Most of the patients at risk are actually in the latter part of the enrollment. And so, what we do with the analysis, is we go

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through, and when we look at the power, and we do an event-driven analysis, what we are doing for you is we're giving you our best guess as towhen the events will accumulate to trigger the analysis.

Now it could be more -- with some of our trials, Lynparza and Tagrisso, we've found that events come kind of slowly. And that we know now withthose trials, that's because those drugs work really well. And so, we've ended up pushing out on occasion. And so, that's really how we decide whenwe're going to analyze.

Now there is another -- I think there's another thing contained within your question, which has to do with interim analyses, and all of these trialshave, as is typical for oncology trials have interim analyses. We don't disclose a lot about them. We have independent data monitoring committees,so that we make sure that the trial integrity is preserved. And so, that is included in different aspects of the trial. What we're telling you in 2018, isthat's when we think we'll accumulate the required number of events for a fully-powered overall survival final analysis.


Thanks, Sean.

Operator

Sure. Sachin is back. Sachin Jain, Bank of America.


I just had a one follow-up question. So combining both Tim and Eric's question as to how to assess the PFS data in 1H 2017, and I just want to makesure I'm absolutely clear on some of your message. So and this just pertains to your commentary around durva mono. So firstly, is there any reasonwhy the PFS has a ratio we might see for your monotherapy, should be any materially different from the [0.6], [0.7] seen for Keytruda in their first-linestudy? And then second, if we do see that sort of hazard ratio, do you have enough power to stop the study in the first half of next year for thatmono arm? Thanks.


So let me back up. So let me talk about the PFS analysis. The PFS analysis that we're talking about in the first half of next year is a final analysis forPFS, okay? Because as everyone appreciates here, in first-line non-small cell lung cancer, chemotherapy doesn't cure anybody, but is an activetherapy with the standard of care, doublet chemotherapy, with demonstrated progression-free survival and survival benefit. And as well, thesepatients will have the opportunity to cross-over to other therapies. It's not included within the trial design, but of course, when they progress, theirphysicians can put them on whatever is the standard of care for second-line.

So the survival and the overall survival mature at very different rates. The analysis dates we're giving you are the final analyses for those endpoints,PFS, Half 1 next year, the final analysis. So it is powered to show a meaningful difference.

OS, again, event driven, so we give you a guess, we say 2018. So as we get closer, and we have the events, we can refine for you a little bit, and tellyou when we're going to do that. But that's the final analysis fully powered for that endpoint, okay? And again, this is the trial where they haveco-primaries. We could miss PFS for some combo, for some patient population, and later be positive for OS, and have a net positive trial with amatrix of potential outcomes.

Does that get at -- you asked also about Keytruda. So the only thing I will say, is that the Keytruda data is a very highly selected as you appreciate,very highly PD-L1 positive, and even pretty highly selected beyond that, in terms of patient characteristics. So it is going to be difficult to do across-trial comparison there. But your question was, if we were to see that level of benefit, would it show up in a PFS analysis?

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It's a final mature analysis. It would show up in the analysis. We do believe it's clinically meaningful benefit that was shown. Does that answer yourquestion?


Yes, perfect. Thank you very much.

Operator

Let's go to Simon Baker at Exane.

Simon Baker - Exane - Analyst

Thank you. Let me continue on the same vein, pulling Eric and Tim's questions together. Just on a hypothetical point, if we think about the potentialoptions you have for changing the statistical plan on this. And if we accept that OS is the gold standard end point, could you simply drop PFS as aco-primary endpoint, and essentially move all of the alpha, and all of the emphasis of the study onto overall survival? Thank you.


So let me do two things there. So one is, could you switch from PFS to OS as the only primary? The answer is yes, you could. Have we? No, wehaven't. We have PFS and OS as co-primaries, with the time lines that I've described for you.

Tim Anderson, you have another question, Tim, Bernstein.


Yes. Thank you. Okay. So going back to MYSTIC, I'm sorry. On the monotherapy durva arm, that is only I believe, a secondary endpoint, so you can'tfile because of that, unless you elevate that to a primary. If you elevate it to a primary, then you split alpha even further. My guess is that, given thecompetitive dynamics with monotherapy in front line because Keytruda is already there, my guess is you probably sacrifice the mono opportunity,and save all your alpha for a combo opportunity? Is that an accurate assessment?


So we haven't talked about the hierarchy of analyses in MYSTIC. I think, what we've shared with you is that we believe the trial enables monotherapyapproval, if appropriate, and combination therapy approval if supported by the data. And also enables looking at a PDL-1 cut-off, and enrichmentfor people for -- whose tumors express PDL-1 versus those with less expression. We haven't been specific about how we're setting that. And so,that's what we have, and that's really all the answer we're going to have for now.


Okay. So is it fair to say though, it would be a change in the statistical plan for you to be able to file in mono as it is currently set? Because as asecondary end point, that's not viable data, correct?

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We haven't said what the hierarchy of endpoints is, and we're not going to disclose the hierarchy of endpoints. So we've disclosed I think, what Itold you about mono versus combo and PDL-1 positive, or high versus low in the cut-off.


Okay. Thank you.


And I think this is our last question. Seamus Fernandez, back from Leerink. What do you have, Seamus?


Sure, thanks. So just a quick question on MYSTIC again, I apologize. But Sean, if I just sort of take the tone of the conversation, it seems like you'rea little bit cautious on the opportunity to show a positive effect on progression-free survival. And I just want to offer you the opportunity to giveus your views and conviction that it's possible to succeed on a progression-free survival look? And then, the separate question is, what do youbelieve is necessary to communicate to investors when you actually take the PFS look, which I think many of us assume is sometime in the first halfof next year, but probably in the middle of that period kind of a March to April period? Can you just give us a general sense of what you believe isnecessary to communicate, because I think there's some significant materiality importance here? Thanks.


Yes, so great. Listen, so let me -- thank you, Seamus for the opportunity to clarify around PFS, and I think it's great to go back to the previousquestion. Could we have, for instance, dropped PFS as a primary endpoint, co-primary endpoint in MYSTIC, and said, look, we don't have confidencein it, and therefore we're going to complete with overall survival? We could have done that. We could still do that, and we have not, and are notgoing to drop PFS. And the reason is, that we have confidence in PFS as an endpoint, okay?

Overall survival is the gold standard. I think if you look at the data in aggregate, it is not that PFS in lung cancer doesn't capture benefit for IO, it'sthat these tails that you get with a subset of patients deriving extraordinary benefit do get captured more in overall survival. It's not that we've lostconfidence in PFS, and that's why we elevated OS. It's because we saw greater power developing over time in OS, and we wanted to be able tocapture both. In order to do so, we added more patients. So that we're able to preserve what we had originally intended for PFS, and then add inthis opportunity to capture overall survival, so we have confidence in it.

The next question has to do with communication, when we look at that. I have told you that, that's a PFS final analysis, will be driven by events,and we'll be able to give you as the events accumulate, and we have a better idea, we'll be able to give you a tighter time line, as to when thatanalysis will occur. We just don't have it yet. It's not mature enough. And again, I told you how the enrollment went in the trial, so that you canprobably figure out why I say that, about maturity of number of events.

The question of communication is a materiality question, as you appreciate. And you said, it's -- we're a public company, and if there's somethingmaterial, we have to disclose it in a timely fashion. That's an internal discussion that will occur at the time that we look at the data, and have theresult. And then, that will determine how we communicate, whether we feel we need to communicate immediately, or we take a more measuredapproach.

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Thanks.


Let's -- okay. Let's go to BlackRock, there's a BlackRock question. Let me read it. It says, asking about the statistical hierarchy for MYSTIC. Will thewhole population be analyzed first, or the PD-L1 positive group first?

Again, it's just not a question we're going to answer with any specificity. We have stated that we are using internal and external data to inform howwe do the analysis at MYSTIC, how we set the cut-off. And we are not revealing more details as to how exactly we're going through the analysisplanned for MYSTIC. So I will not be able to answer the question in more detail than that.

This I think will be our last question. Eric Keisman, back from Capital Group. Eric, go ahead, please. Are you there?


Hi, Sean, can you hear me?


There we go, can now.


There we go. Listen, the situation and events just find themselves in, is that we just don't have a lot of preliminary data from you, except the early006 data on which to extrapolate to the Phase III setting. And I think that's why you're getting all these questions, and you know that. If you cannotshare the data on 006, it would at least help us to know how much data you have, so that we can gauge the confidence you are expressing, againsthow much data you must have internally that you're basing it on. If I knew, for instance, if we knew -- that we've got 100 first-line patients, andwe've followed them for at least a year on this combination. Then we would feel like, okay, they've got a really robust picture of what that lookslike, but not even knowing how much data you have, leaves us a little bit at a loss. Is there a middle ground, without sharing the data itself, whereyou can just tell us how much of a robust data set you have in the front line setting?


We've shared what we're going to share, with regard to what we have. I mean, yes, it's challenging. You want to know how MYSTIC is going to turnout? I would also like to know how MYSTIC is going to turn out.

I have confidence in the mechanism of action. I have confidence in a really well-designed executed trial. I have confidence in enough patients todo well-powered analyses for the meaningful endpoints that enable us to move forward, progression-free survival, overall survival, look at thesefascinating questions of mono versus combo and cut-off. And that's what we've shared.


Thank you.

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Operator

Okay. Thanks everybody for your fantastic engagement, and interest in our pipeline. I want to just spend a few moments, before we close tosummarize. We believe the pipeline-driven transformation of AstraZeneca is on track. And in some cases, we don't get to talk as much aboutLynparza, about Tagrisso, Farxiga, even ahead of our expectations.

We have 14 opportunities in the late stage pipeline including key lifecycle programs, or medicines in Phase III or filed for registration. Oncology isprogressing ahead of expectations, with Tagrisso and immuno-oncology leading the way, now with our first filing for durvalumab for acceleratedapproval for bladder cancer, and we're very excited about that. That is coming ahead of our expectations.

We look forward to an extremely busy news flow, which we've outlined very clearly for you today over the next 12 months, and we'll be sharingmore information and detail on news flow, as we have it in due course. And with that, I really want to thank all of you for your interest, and takingthe time to hearing the AstraZeneca late stage pipeline update today. I wish everyone a really great holiday season and a happy new year. Thankyou very much.

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