AstraZeneca PLC Q4 FY2025 earnings call

• Financial performance: The company delivered strong financial performance in 2025 with revenue growing 8% and product revenue growing 10%. Core EPS grew by 11%. • Pipeline: Had strong momentum with over 100 Phase III trials ongoing. Expected 20 Phase III readouts in 2026 with potential to drive over $10 billion of peak revenue. Prioritized 5 technologies including ADCs, cell therapy, bispecifics, etc. • Commercial: Oncology, BioPharmaceuticals, and Rare disease all had specific growth drivers. Oncology had key medicines like Tagrisso, Imfinzi, etc. achieving milestones. BioPharmaceuticals had growth in R&I and challenges in CVRM. Rare disease had specific product growth. • Global reach: Diversified revenue streams and manufacturing/R&D footprint in the US and China to ensure resilience to regional disruptions.

Oncology: In 2025, total revenues were $25.6 billion, an increase of 14% year-on-year (excluding the 2024 Lynparza sales milestone). Product revenue grew by 10% driven by continued global demand for innovative medicines. There were 16 blockbuster medicines in 2025, with 17 of those growing at double digits. BioPharmaceuticals: In 2025, total revenue was up 5% to $23 billion. R&I revenues in the fourth quarter were up by 10%, with revenue from growth medicines increasing by 27%. CVRM revenues were 6% down year-on-year due to generic competition affecting Farxiga and Brilinta. Rare disease: In 2025, rare disease delivered total revenue of $9.1 billion, up 4% year-on-year, driven by growth in neurology indications, increased patient demand, and global expansion. Ultomiris grew 15%, Soliris revenues declined due to conversion to Ultomiris and biosimilar pressure, Strensiq grew 15%, and Koselugo had strong demand.

• Total revenue is expected to grow by a mid- to high single-digit percentage in 2026 despite headwinds such as VBP in China for Farxiga, etc. • Core gross margin is anticipated to be broadly flat to slightly higher in 2026. • Core tax rate is expected to be between 18% and 22% in 2026, and core EPS growth is expected to be a low double-digit percentage. • Anticipates a low single-digit positive FX impact on total revenue and a neutral impact on core EPS. • R&D expenses are expected to be at the upper end of the low 20s percentage range of total revenue in 2026. • Targets a mid-30s operating margin in 2026 but prioritizes absolute profit growth and long-term value for shareholders.

• Uncertainty in the outcomes of Phase III trials as not all will be positive. • Impact of generic competition on products like Farxiga and Brilinta. • Regulatory risks associated with new product approvals. • Intense market competition in various therapeutic areas that could affect sales and growth.

Q: Thoughts on growth beyond 2030 and the $10 billion risk-adjusted peak sales potential in 2026, including asset mix and success rates.

A: Pascal Soriot and others discussed the pipeline momentum and the importance of identifying the right patient population.

Q: Update on China in 2026, including profitability.

A: Iskra Reic talked about headwinds like VBP in China and tailwinds from new launches like Fasenra, etc., and mentioned profitability in China is lower than the group but with growth opportunities.

Q: Implications of the lidERA result on the SERENA-4 trial design.

A: Susan Galbraith explained the SERENA-4 trial design was enriched for endocrine-sensitive patient populations.

Q: Confidence in elecoglipron moving to Phase III.

A: Sharon Barr and others discussed confidence in the Phase II profile and the product's potential in weight management.

Q: Points of differentiation of tozorakimab.

A: Sharon Barr explained tozorakimab's ability to hit multiple pathways and its broad trial design for COPD.

Q: Growth of Calquence and the AMPLIFY regimen.

A: David Fredrickson talked about the potential of AMPLIFY and other growth opportunities for Calquence