AstraZeneca PLC (AZN) Earnings Call Transcript & Summary

Good morning to those joining from the U.K. and the U.S. Good afternoon to those in Central Europe, and good evening to those listening in Asia. Welcome to AstraZeneca's Half 1 and Q2 2026 Webinar for Investors and Analysts. Before I hand over to AstraZeneca, I'd like to read the safe harbor statement. The company intends to utilize the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Participants on this call may make forward-looking statements with respect to the operations and financial performance of AstraZeneca. Although we believe our expectations are based on reasonable assumptions, by their very nature, forward-looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements made on this call reflect the knowledge and information available at the time of this call. The company undertakes no obligation to update forward-looking statements. Please also carefully review the forward-looking statements disclaimer in the slide deck that accompanies this presentation and webinar. [Operator Instructions] And with that, I'd now like to hand the conference over to the company.

A warm welcome to AstraZeneca's Half Year and Second Quarter 2026 Presentation Conference Call and webcast for investors and analysts. I'm Joris Silon, Head of Investor Relations. And before I hand over to Pascal and members of our executive team, I would like to cover some housekeeping items. Firstly, all of the materials presented today are available on our AstraZeneca Investor Relations website. Please advance slide. This slide contains our forward-looking statements, including the safe harbor provisions, which I would encourage you to take the time to read. We will be making comments on our performance using constant exchange rates, or CER, core financial numbers and other non-GAAP measures. A non-GAAP to GAAP reconciliation is contained within the results announcement. All numbers quoted are in millions of U.S. dollars and was stated otherwise. Please advance slide. This slide shows our agenda for today's call. Following our prepared remarks, we will open the line for questions. As usual, we will try to address as many questions as we can during the allocated time, although please limit the number of questions you ask to allow others a fair chance to participate in the Q&A. And with that, please advance to the next slide. And Pascal, I will hand over to you.

Thank you, Joris, and welcome, everyone. I'm really pleased to report that in the first half of '26, we saw strong growth momentum and continued pipeline delivery. Total revenue grew 6%, driven by strong demand for our innovative medicines, excluding the impact of Farxiga and Brilinta, which are affected by generics, as you know, total revenue grew 11%. That is a clear demonstration of the underlying strength of our portfolio and our broad geographical footprint. We also saw strong growth in core EPS increasing 11%. In the first half, we announced positive results from 6 key Phase III programs including 3 new molecular entities. We secured 30 major market approvals across our diverse portfolio, including the first approval for 2 NMEs, Etcamah in breast cancer and Baxfendy in hypertension, and increasing our number of approved NME to 11 since we outlined our target to achieve 20 by 2030. Our confidence in reaching our 2030 target is underpinned by the exceptional quality and momentum of our pipeline, together with our proven track record of successful execution and launches. We continue to invest in our pipeline and commercial capabilities to bring innovative medicines to patients around the globe and to support growth through 2030 and beyond. So please move to the next slide. There you can see the breadth of our company remains a key competitive strength. Oncology and Rare Disease delivered strong double-digit growth in the first half, while within biopharmaceuticals, we see continued momentum in respiratory and immunology that help mitigate the expected impact of loss of exclusivity in severe in particular, Farxiga and Brilinta. We delivered strong growth in the U.S., in Europe and in the emerging markets outside of China. Growth in China was impacted by continued effects from volume-based procurement, and we expect the recent NRDL additions and new regulatory approval in 2026 to fuel future awards. Move to the next slide, please. An important message for today is that when we said our $80 billion revenue ambition for 2030, we did so based on the strength of our diversified portfolio, not on a single program. As you know very well, the $80 billion is a risk-adjusted forecast. If everything worked, we would be above the $80 billion. So we have, of course, expected setbacks to happen. Unfortunately, the results of the CARDIO-TTRansform trial were not what we hoped. And they were disappointing for our team and most importantly, for the patients we sought to help. This serves as a reminder, the transformative since carries inherent risk and not every program will succeed. Our pipeline, however, continued to deliver during the first half with positive results from 6 high-value Phase III programs, including the first pivotal data for 3 new molecular entities to zorakimab in COPD, which we look forward to presenting at [indiscernible] alpha in HPP. And as announced today, our first wholly owned -- including 18.2 positive gastric cancer. We also received 8 major market approvals across important indications, including 2 additional NMEs. We're very happy to see first approvals for in first-line hormone receptor positive breast cancer with emergent ESR1 mutations in Europe and Japan and a few other countries. This approvals demonstrate the value of this innovative treatment approach, and we continue to have constructive discussions with the U.S. FDA. We also saw U.S. FDA approval for which has the potential to transform outcomes for patients with uncontrolled or resistant hypertension, and we continue our launch activities at pace. This, together with the more than 20 approvals we have achieved in the first half of this year support our continued growth trajectory and strengthen our confidence in delivering the 2030 ambition. And as you will hear today, we are also working very hard and making great progress on our post 2030 growth. And with that, I will hand over to Aradhana to take you through our financials. Please advance to the next slide.

Thank you, Pascal, and good morning and good afternoon, everyone. As usual, I will start with our reported P&L. Next slide, please. As Pascal has highlighted, we delivered continued top line momentum in the first half of the year. Total revenue increased by 6% with product revenue also growing by 6%. Alliance revenue increased by 29%, reflecting higher profit shares from our partnered medicines and HER2, [indiscernible] in markets where our partners record product sales. Next slide, please. Turning to our core P&L. Core gross margin was 83% in the first half. While the margin improved in the second quarter compared to the first quarter, we expect lower gross margin in the second half consistent with prior years, reflecting seasonal demand patterns for lower-margin medicines such as flu mist and -- For the full year, we continue to expect a stable to slightly higher core gross margin versus 2025. Core R&D expense increased by 6% in the first half, reflecting continued investment in our pipeline. Following the positive Phase IIb results for oral GLP-1 molecule, elecoglipron, we have now initiated comprehensive Phase III program in both obesity and type 2 diabetes with first patients dosed earlier this month. Core R&D represented 23% of total revenue in the first half and we continue to expect R&D expenses to be at the upper end of the low 20s percentage range for the full year as we continue to build our pipeline for long-term growth opportunities, including bispecifics, cell therapies, engagers in addition to our CVRM portfolio. Core SG&A expense also increased by 6% in the first half. During this period, we launched in the U.S. following FDA approval in May, and we continue to make prelaunch investments ahead of anticipated launch of dosiratumab following positive Phase III data. Both medicines are expected to be important growth drivers supporting growth to 2030 and beyond, and we are investing accordingly to maximize their potential. Other operating income was $341 million in the first 6 months, consisting of royalties and small regional divestitures, and we anticipate a broadly similar level in the second half. Our tax rate in the second quarter benefited from a onetime adjustment to deferred tax assets following certain internal legal entity changes. Overall, core EPS grew by about 11% in the first half, in line with our guidance for the full year. [indiscernible] [ 22 ] billion in the first half, and decline versus comparator period. This primarily reflects the Lynparza milestone received in the first quarter of 2025 skewing comparisons as well as working capital impact associated with U.S. loss of exclusivity for Forxiga. We expect these working capital effects to persist through the remainder of the year before normalizing. Capital expenditure was $1.5 billion in the first half. underscoring our commitment to investing behind our long-term growth ambitions. And as previously communicated, we anticipate CapEx to increase by around 1/3 in 2026. Key investments include our new ADC manufacturing facility in Singapore, along with several other strategic multiyear projects that will enhance our manufacturing network and support sustainable growth well into the next decade. Deal-related payments totaled $3.3 billion is included in both milestone payments and the $1.2 billion upfront payment for CSPC collaboration, which was during the second quarter. For the full year, we continue to expect milestone payments of approximately $2.5 billion relating to prior business development transactions. We have announced new BD transactions totaling just over USD 2 billion in upfront payments year-to-date, including the most recently announced Dizal transaction. Our lease liabilities also increased as we opened our new Kendall Square R&D center in Cambridge. Our capital allocation priorities remain unchanged. Net debt increased by around $3.5 billion in the first half primarily reflecting the payment of the second FY 2025 interim dividend in March and the deal payments I just mentioned. We remain comfortable with our level of gross debt. As previously communicated, following refinancing activities earlier in the year, resulting in higher than historic interest rate and lower interest income, we anticipate core finance costs to be higher in the second half compared to the first half. Turning to guidance. We are reiterating our outlook for the full year. We expect total revenue to increase by a mid- to high single-digit percentage and core EPS to increase by low double-digit percentage at constant exchange rates. So to summarize, we delivered another period of strong financial performance while continuing to invest significantly in both our pipeline and our commercial capabilities. We remain on track to deliver on our priorities in the near term and support growth in the long term. With that, I'll hand over to Dave to take you through the performance of our oncology business. Next slide, please.

Thank you, Aradhana. Next slide, please. Oncology total revenues grew 15% in the first half to $14.1 billion, underpinned by double-digit growth in all major regions. Growth in the U.S. and Europe was particularly notable at 18% and 16%, respectively. Focusing in on the quarterly performance of our key medicines. Tagrisso delivered 6% growth in the second quarter to revenues of $1.9 billion, supported by double-digit growth in the U.S. The share of combination regimens in the first line continues on an upward trajectory in key markets with FLAURA2 remaining the clear preference. Turning to Calquence, which grew 16% in the quarter generating more than $1 billion in revenue for the first time in a single quarter. Calquence maintains its position as the leading BTK inhibitor in frontline CLL across major markets despite intense competition. Within the finite duration class, AMPLIFY continues to gain share in reimbursed markets with encouraging early signs in the U.S., where it is uniquely positioned as the only BTK inhibitor with both finite and treat to progression options. We continue to see AMPLIFY as a significant growth driver through the remainder of 2026, supported by the clear global trend towards adoption of finite duration treatments. Imfinzi and Imjudo delivered growth of 25% in aggregate in the second quarter. Imfinzi growth continues to be driven by a combination of new launches and increasing demand for established indications. Meaningful contributions from Matterhorn and gastric cancer reflect its rapid establishment as the standard of care in reimbursed markets and in lung, Adriatic continues to be an important additional source of growth. We continue to see strong global momentum for Imfinzi in muscle invasive bladder cancer. And while the U.S. market is evolving with competitive entrants, VOLGA will continue to expand Imfinzi's reach. Turning to HER2, we delivered growth of 31% in the quarter and reported revenues of $888 million. Growth continues to be across all regions and reflects sustained market leadership in the HER2-positive and HER2 low breast cancer indications in major markets. This strong position is complemented by increased adoption and additional launches in emerging markets. We are seeing encouraging early signs of adoption and growing awareness in the first-line DESTINY-Breast09 setting in the United States following its approval late last year. Together with the recent simultaneous U.S. approvals of DESTINY-Breast05 and DESTINY-Breast11 in the curative setting, these growth drivers will become increasingly important through the remainder of the year. Truqap revenues of $233 million in the quarter represent growth of 37% over the prior year. As we've indicated previously, the majority of this growth is from ex U.S. markets, with the U.S. opportunity at peak and the best indication. Beyond breast, we are looking forward to bringing Truqap to patients with P10 deficient metastatic hormone-sensitive prostate cancer following the recent approval of CAPItello-281 in the U.S. and a near-term priority is to establish testing in the setting, which today is not common practice. The actuary revenues of $55 million in the second quarter demonstrate growing demand in later line EGFR mutated lung cancer with signs of increasing utilization in the second-line setting in the U.S. We're excited for the ongoing launch of data in patients with triple-negative breast cancer were not candidates for immunotherapy, following the U.S. approval of TROPION-Breast02 earlier in the quarter. Given its differentiated profile, we see this as a significant opportunity and look forward to additional market launches in the second half. With strong momentum demonstrated across our portfolio in the first half, we are well positioned for continued growth through the rest of the year as we deliver innovative oncology medicines to more patients. Please advance to the next slide. Focusing in on EGFR mutated lung cancer, Tagrisso is the #1 prescribed third-generation EGFR TKI globally approved across all stages of disease. This leadership position is underpinned by the breadth of our clinical development plan and our differentiated product portfolio. In the first-line combination setting, we've seen significant global market expansion over the past 12 months with FLAURA2 the clear market leader in the highly competitive U.S. market, FLAURA2 holds around 3/4 of this growing segment. We were pleased to announce the in-licensing of a novel oral EGFR inhibitor earlier this month. is already approved in the U.S. and China for patients whose tumors carry exon 20 insertion mutations, following progression on or after platinum-based chemotherapy, based on the WUCON28 data presented at ASCO, filings for the first line have been submitted in China and the U.S. This deal complements our existing EGFR leadership and allows us to bring a differentiated treatment to patients with limited treatment options globally. Importantly, it's also a clear signal of our intent to remain the definitive leader in this space. I'll now hand it over to Susan to discuss some more of the specific near-term pipeline opportunities.

Thank you, Dave. Turning to the right-hand side of this slide. Our near-term pipeline readouts provide the opportunity to further strengthen our position in EGFR-mutated lung cancer with Tagrisso as the backbone TKI with two Phase III trials due to read out later this year, investigating combinations in the sizable post-TKI second-line setting. TROPION-Lung15 evaluates Datroway alone and in combination with Tagrisso, building on the growing position Datroway already has in later line lung cancer based on TROPION-Lung05. SAFFRON, then evaluates Tagrisso combined with Orpathys, offering a differentiated combination approach in patients with MET-driven resistance supported by the encouraging data we've already seen from SAVANNAH and Sachi. Looking further ahead, TROPION-Lung14, then aims to bring the combination of Datroway and Tagrisso into the first line, building directly on the success of FLAURA2. This represents significant long-term opportunity to extend our first-line leadership and improve outcomes with the next-generation combination. Taken together, these opportunities represent a comprehensive strategy to maintain leadership in EGFR-mutated lung cancer for years to come. Next slide, please. I'm also delighted to share with you today the high-level results from two recent Phase III trial readouts. Back in May, we announced positive results from the planned interim analysis of the Phase III VOLGA trial for PMC patients with muscle invasive bladder cancer who are not candidates for cisplatin. VOLGA builds on our existing presence in this setting, where the Niaga regimen has already established Imfinzi as a key treatment option for cisplatin eligible patients. VOLGA explores whether the combination of important vedotin and Imfinzi plus or minus Imjudo can improve outcomes for the 50% of patients who are not candidates for cisplatin. Importantly, in this regimen, enfortumab vedotin is only given in the neoadjuvant setting, aiming to optimize outcomes whilst balancing the overall benefit risk profile. Imfinzi in combination with important apedotin demonstrated statistically significant and clinically meaningful improvements in both event-free survival and overall survival, underscoring the potential of this regimen to meaningfully improve outcomes in bladder cancer. The Imjudo containing arm also demonstrated a statistically significant improvement in event-free survival with a favorable trend in overall survival. VOLGA broadens our presence in balder cancer, enabling more patients to benefit from an Imfinzi based regimen, complementing in muscle invasive blader cancer, and the recently U.S. approved Patena indication in earlier-stage non-muscle invasive disease. We also saw positive results this quarter. And whilst the landscape in the first-line setting has evolved significantly since we started this trial, it further reinforces Imfinzi's value across the full spectrum of blood cancer. Turning now to gastric cancer. We announced today positive results from the Phase III CLARITY-Gastric01 trial, evaluating solicitate vedotin or in previously treated patients with advanced gastric cancer expressing Claudin 18.2. CLARITY-Gastric01 is the first Phase III trial to demonstrate an overall survival benefit with a Claudin 18.2 targeted antibody-drug conjugate in the second-line plus setting. This is a population with a particularly poor prognosis, fewer than 20% of patients with advanced gastric cancer survived beyond 1 year. And at present, there are no targeted options to Claudin 18.2 positive non-HER2 positive tumors in the second-line plus setting. The trial met its overall survival dual primary end point with Sunny V demonstrating a statistically significant and highly clinically meaningful improvement in overall survival versus investigator's choice of therapy in patients treated with at least 2 prior therapies. There was also a trend to PFS benefit, we should not meet statistical significance. Critically, the trial also met its key secondary end point, demonstrating a highly clinically meaningful overall survival benefit in patients treated with at least one prior line, potentially extending the benefit to a broader patient population earlier in their treatment journey. Importantly, the survival data were demonstrated in patients with Claudin 18.2 expression as low as 25% at any staining intensity, a lower threshold than that required by other Claudin 18.2 targeted therapies, meaning that Sunny V could potentially benefit around 50% of patients with second-line plus cancer -- gastric cancer, representing more than 180,000 patients across the U.S., EU5, China and Japan. CLARITY-Gastric01 represents a landmark milestone for our oncology portfolio. Sunny V is our second ADC to demonstrate an overall survival benefit in gastric cancer following HER2. And our third positive Phase III readout in this tumor type in just 2 years, following Matterhorn for Imfinzi and DESTINY-Gastric04 in HER2. It is also the first Phase III data from our wholly owned ADC portfolio, marking an important step as we establish our independent position in this space. We look forward to presenting the data later this year. Together with VOLGA, these data strengthen our conviction and the opportunity to combine I/O with ADCs, an approach we believe could be transformative across multiple cancers. And specifically, these two readouts reinforce our confidence in CLARITY-Gastric02, our first-line gastric cancer trial, evaluating Sunny V in combination with capecitabine, with or with that, we'll be gusto make on novolumab. And with that, please advance to the next slide. And I'll pass over to Ruud to cover about our pharmaceutical performance.

Thank you so much, Susan. Next slide, please. Our biopharmaceutical business is in a transitional period. And in the first half of 2026, total revenue declined by 5% to $11.2 billion. This reflected the loss of exclusivity headwinds for Farxiga, Brilinta and roxadustat, which were largely offset by the growth of our respiratory portfolio. The strong momentum in respiratory was supported by our established biologics for severe asthma, which generated over $2 billion of in-market sales in the first half. Focusing in on the quarter, respiratory and immunology total revenue grew by 11%. Fasenra grew 13% to $570 million, driven by its continued leadership of the 5 class. In the emerging markets, Fasenra grew 75%, thanks to the ongoing success of its launch in China, where it entered the national reimbursement drug list at the start of the year. Tezspire grew by 45% to $390 million, with strong performances in the United States and Europe being supplemented by uptake in the emerging markets. In our inhaled portfolio, Breztri continued on its positive trajectory with 20% growth through $346 million. Breztri received its first approval for asthma this year in the United States. And last week, received a positive recommendation for asthma from the CHMP in Europe. We are excited about this important new indication, which will help us bring this therapy to more patients. Symbicort revenues of $671 million were down 8% due to the price pressure in the United States, reflecting a new generic competitor entering the market. Saphnelo revenues increased 24% to $209 million, driven by share gains in the intravenous segment for SLE patients. The new subcutaneous formulation is now available in the U.S. and some European markets, which broadens Saphnelo's reach to patients who favor self administration. As expected, generic competition for Farxiga entered the U.S. at the start of the quarter. And this, along with loss of exclusivity in some other markets and VBP in China saw Farxiga declined by 90% overall resulting in $1.8 billion of revenue for the quarter. Navigating these expected life cycle transitions is a natural part of our business, and we remain confident in the long-term strength of our broader portfolio and pipeline. In May, we secured the approval and launch of Baxfendy in the U.S., and we are now building early market access through affordability programs. We anticipate commercial access for Baxfendy will broaden over the next few quarters in anticipation of Medicare party reimbursement from 2028. We're also making an early start on our launch preparations for tozorakimab. We are encouraged by the data, which showed highly clinical meaningful benefits in the and titanium trials, representing a broad COPD population, and we are looking forward to bringing this innovation to patients around the world as soon as possible. I will now hand over to Sharon to take us through the latest developments in the biopharmaceuticals R&D pipeline.

Thank you, Ruud. Next slide, please. I'd like to start by acknowledging the Phase III CARDIO-TTRansform transform trial for Wainua in transthyretin-meated amyloid cardiomyopathy. This trial was conducted in a contemporary ATTR cardiomyopathy patient population, designed to examine the role of Wainua, a gene silencer treatment on top of today's standard of care in reducing recurrent cardiovascular events and CV mortality. In this contemporary patient population treated with standard of care, including 57% on a stabilizer, adding Wainua did not provide a statistically significant benefit on the composite outcome of CV mortality and recurrent CV events. However, in a prespecified subgroup analysis of patients treated with Wainua monotherapy as compared to placebo, fewer primary composite events were observed, and this result was nominally significant. In patients who were on stabilizer therapy at baseline, no treatment effect was observed. Although the trial did not meet its primary endpoint, we believe these results contribute meaningfully to the greater scientific understanding of treatment approaches for the hundreds of thousands of patients worldwide suffering from this progressive and often fatal condition. AstraZeneca and Ionis will analyze the full data set to further understand the results, and we look forward to presenting these data at the European Society of Cardiology Congress in August. Turning now to elecoglipron where we are building strong momentum into Phase III. At the American Diabetes Association meeting in June, we presented results from our Phase IIb VISTA and SOLSTICE trials, which demonstrated the potential of elecoglipron as a multi-blockbuster asset for AstraZeneca. In VISTA, we observed a clinically meaningful and statistically significant weight loss of up to 11.8% at week 36, importantly, without evidence of a plateau. In SOLSTICE, there was an up to 1.9% reduction in HbA1c at week 26 with the vast majority of patients with type 2 diabetes reaching their glycemic goals. Elecoglipron demonstrated a favorable safety profile with no unexpected safety signals, low discontinuation rates and tolerability consistent with the GLP-1 receptor agonist class. It is worth emphasizing that elecoglipron is an oral small molecule. This 1 daily treatment requires no fasting or fluid restrictions and critically can be combined with other oral small molecules to treat interconnected chronic diseases. Based on the strength of these data, we are advancing an ambitious Phase III program. In BOLD is studying elecoglipron monotherapy in patients with obesity or overweight with or without type 2 diabetes. The ILLUMINATE program, which includes 5 Phase III trials, evaluates olecoglipron, both as bonotherapy and in combination with epagliflozin across broad patient populations with type 2 diabetes. I am pleased to say that we achieved first subject in for both the Embold and ILLUMINATE programs. Beyond these, we also plan to initiate ELEVATE an indication seeking outcomes program designed to demonstrate the value of elecoglipron heart failure with preserved ejection fraction and chronic kidney disease on the background of dapagliflozin and other standard of care. Finally, I want to highlight a few additional advancements in our biopharmaceuticals pipeline during the second quarter. Staying in weight management, the Phase II APRICUS trial studying AZD6234, our selective amylin receptor agonist read out this quarter, and we are now initiating a Phase III monotherapy trial. We look forward to sharing the Phase II data with the medical community at EASD later this year. In dyslipidemia, we look forward to the Phase III readout of our oral PCSK9 laraprostat in the first half of 2027 and are advancing our first fixed-dose combination of laraprostat with rosuvastatin into Phase III, bringing together the benefits of a statin and a PCSK9 inhibitor in a single tablet. Moving to our respiratory portfolio. We are excited to present the highly clinically meaningful results from the Oberon and Titania Phase III studies for doserakimab in COPD at the European Respiratory Society Congress in September, highlighting the compelling profile we have seen for this potential first class asset. We made exciting progress in other areas of our respiratory portfolio this quarter. Our inhaled TSLP sunacamet, which was formerly referred to as AZD8630 read out its Phase II study, and we are discussing plans for Phase III with our partner, Amgen. Additionally, we entered into an exclusive license agreement with CTTQ, a subsidiary of Sino Biopharmaceuticals, for the development, manufacturing and commercialization of TQC3721, an inhaled small molecule PDE3/4 inhibitor currently in Phase III trials in China for COPD. This licensing agreement strengthens our respiratory portfolio with a novel inhaled option for people living with COPD, a disease with continued patient need, particularly for those who remain symptomatic despite exiting treatment options. And with that, please proceed to the next slide, and I'll pass over to Marc to cover rare disease.

Thank you, Sharon. Can I get the next slide, please. Rare Disease total revenues grew by 11% in the first half to $4.9 billion underpinned by double-digit growth access all key medicines. This is driven by increased patient demand and continued global expansion following launches. In the second quarter, Ultomiris grew 12% driven by patient demand across indications, including the competitive MG and PNH markets. Solid risk revenues continued to decline due to successful conversion to as well as biosimilar pressure. Strensiq grew 36% year-on-year, reflecting strong patient demand. Strategic remain one of AstraZeneca's fastest-growing blockbuster medicines, supported by ongoing investment in commercial capabilities, infrastructure and disease awareness. These investments are driving continued growth today while also laying the foundation for the potential launch of the -- alpha and future franchise growth. continues to deliver strong global momentum, supported by expansion in adult patients with NF1 PN, an uptake of the granule formulation in recently launched market. Koselugo remained the market leader in patients with PN. Overall, we continue to see great momentum across the Rare Disease portfolio, and please advance to the next slide. Turning to our Rare Disease pipeline. We have continued to build momentum with Phase III data presentation across rare disease indications, highlighting the breadth of our portfolio and the strength of our late-stage execution. In IgA nephropathy, Phase III data from the ICAN trial for Ultomiris showed a 43% reduction in proteinuria, with significant proteinuria reduction seen as early as 10 weeks. Importantly, treatment effects were consistent across patient groups, including those at higher risk of progression and with more inflammatory disease. Wigan is becoming an increasingly competitive treatment landscape, the eternity of the disease underscore the importance of multiple treatment approaches. And the data we presented at further support the role of complement in disease pathopasiology. The Higano opportunity represents an important step in the continued expansion and development of our C5 franchise building on Ultomiris established leadership across multiple complement-mediated disease. We are now filed in both the U.S. and For alpha in repo phosphatase Data from our Phase III pediatric trials, Mulberry and FastNet were presented at the International Conference and Children's born Health in June. Menbery demonstrated clinically meaningful improvement in bond health function and quality of life. In our -- switch safety study, Chesnut, or infiltrates alpha was well tolerated and demonstrated a favorable safety profile in pediatric patients. In a pooled analysis of the Phase III Mulberry -- trials, including pediatric, adolescent and adult patients, treatment with resulted in a median of 261 days per year free from injection site reactions. And injectite reactions rates were 5x lower than Strensiq. Data from the CORE trial will be presented at the American Society for Bone Mineral Research in October. We are progressing filings across major markets to support a broad SPP patient population. Also, data from the CALYPSO Phase III trial was presented in May at ECE, demonstrated maintenance of serum calcium within the target range, normalization of urinary calcium and restoration on normal bone turnover in patient with An onselimumab in Kappa light chain amyloidosis patients, results from the CARES program demonstrated a 62% reduction in all-cause mortality and a 71% reduction in cardiovascular spetulization with an overall survival benefit observed even in patients with advanced myostage disease. Taken together, this program illustrates the strength of our rare disease pipeline with multiple near and midterm catalysts with potential approvals and future launches across several high-value rare disease indication. And finally, an update on our pace Ultomiris Phase III trial in adults with thrombotic microangiopathy after SCT. High-level results showed that did not achieve statistical significance for the primary endpoint of event-free survival through 26 weeks compared to placebo in adult and adolescents age 12 years old with Ultomiris showed a trend towards treatment benefit and discussion with as authorities are ongoing regarding the interpretation of this data, including in the context of real-world evils. In pediatric patients, with CT TMA, we're advancing regulatory filings based on data from open-label Phase III trial reported in 2025 and data from an external control study. As pioneers in complement biology, we continue to explore and advance treatment approaches in disease where complement is believed to play a central role in disease pathropatiology with limited treatment option available today. It reflects our ongoing commitment to bringing innovative therapies to patients with severe complement-mediated disease. And with that, please advance to the next slide, and I will hand back to Pascal.

Thank you, Marc. Next slide, please. As the slide shows you we carried strong momentum into the first half, 6 positive program readouts already delivered and a rich catalyst pass ahead. Over the next 18 months, we have 25 key Phase III trial readouts that are planned, giving us multiple opportunities to add further value and conviction to our trajectory. We expect pivotal data readouts for 6 new molecular entities in 2027 alone across our portfolio. Some of them are really important, as you can see here, and for instance, are pari is a big one, but there are many other very important readouts over the next 18 months or so. So I move to the next slide. Our growth ambition extends well beyond 2030, and we continue to invest behind the transformative technologies that we believe will redefine how many diseases are treated. If you remember, back in May 2024 we identified platforms that we call -- that we said would drive our growth post 2030, what we called at the time the day after tomorrow. And I'm pleased to say that we have made very good progress across many of these platforms, as you can see here, the slide highlights the momentum we're building in our next wave of innovation. So if we start with rate management and card risk factor. As Sharon mentioned, we expect the first Phase III data for in first half of 2027, and we have now initiated 5 Phase III trials for elicoglipram. So you can see here, our portfolio is building both scale and optionality and focused on not only weight management, but the risk factors that are -- that company excess obesity and particular obesity. In ADC and conjugates, we continue to make strong progress. As highlighted today, we've just had the first positive Phase III readouts for And we anticipate Phase III data for our second reowned ADC, next year. We also continue to advance our broader program having those patients in our first Phase III trials for Tovisam and also for adage this quarter. So very good progress across ADCs and radioligand. For next-generation biobaspecifics, we now have 16 Phase III trials across 8 tumor types, including 5 in combination with our ADCs. This supports our ambition to replace the current generation of checkpoint inhibitors. Our cell therapy and T cell engager portfolios are also advancing very rapidly. AZD0120 and both have multiple Phase III trials underway across hematology and importantly, both now have extended into autoimmune diseases, underscoring the broader therapeutic potential of the platforms very exciting program -- progress, sorry, across those two products. Beyond these lead programs, we're also investing behind of the shelf and in vivo cell therapies, which we believe will enable us to reach more patients across more disease areas. These programs continue to advance and are key components of our deep late-stage pipeline of multiple buster opportunities that will not open our next wave of growth. So move to the next slide. The strength of that opportunity is reflected in this slide. We have three recent launches, [indiscernible] each with speaker revenue potential of more than $5 billion. Beyond these launches, we have a broad portfolio of late-stage assets that are expected to deliver pivotal data before 2030, including multiple programs with multi-blockbuster potential. Together, these assets provide a strong foundation for growth into the next decade. And really, it's important to remember that our $80 billion is risk adjusted. If everything worked, 100%, we would be much above the EUR 80 billion, of course. But we've also assumed some projects would not work and other projects would work. And a good example of this is the strong data we obtain a -- a product that very few people thought was going to work. We ourselves had a low probability of success for it. We tried because we thought we have a different mechanism of action, and we have a chance, and it actually worked. You will see the data very soon. As a result, we have increased our peak revenue expectation to more than $5 billion. In addition, with a positive readout for Sunny V today, we estimate that this ADC will reach peak revenue between $3 billion and $5 billion. This is an example of the strength and the diversification in our pipeline. The likelihood that there will be puts and takes is part of how we plan. And we've taken this into account in our growth ambition beyond 2030 as well. We have built what we believe is one of the most exciting pipeline in the industry, one that can now more than offset losses of exclusivity and fewer growth well into the next decade. Including as we move to -- As we move to the next slide, I'd like to say that we delivered strong growth in the first half, again, 11%, excluding Farxiga and Brita showed you the strength of the pipeline and the geographical footprint, 6% growth overall. And so strong growth in the first half. The breadth and depth of our pipeline remain exceptional and our confidence in reaching $80 billion revenue by 2030 is intact. But what excites me most is what comes next. With multiple waves of blockbuster assets that are progressing through late-stage development and transformative technology platform scaling rapidly, we're building a company that will not just deliver on its 2030 ambition, but continue to grow well into the next decade. We have the science, we have the pipeline, and we have the team to make that happen. And with that, please advance to the next slide, and we'll move to the Q&A. As Joris mentioned at the start of the call, please limit the number of questions you ask to allow others a fair chance to participate. Please use the raise hand function on Zoom.

And now let's move to the first question, who actually is from Rajan Sharma of Goldman Sachs.

Firstly, just on the oral PCSK9, which you highlighted. Could you just outline your expectations ahead of the data next year? And how do you expect this to compare relative to Merck And maybe you could just comment on your expectations for pricing in that market given we now have a list price for your competitor? And then secondly, on CV, you're guiding to $3 billion to $5 billion in peak sales now. Can you just help us understand how much of that is in the first line versus the data that you've disclosed today? And maybe could you just talk about geographical split of patients and potential revenues?

Thank you very much, Rajan. Maybe Ruud could take the first question and Dave, the second one.

Yes, of course, Pascal. Overall, I think we are excited about oral PCSK9. We will see the first data reading out in the first half of 2027. I think we will have -- and hopefully, we will have a competitive profile versus the compound of Merck. But I think the breadth of our portfolio for cholesterol-lowering medicines is broader than only the oral PCSK9 as Sharon has mentioned, we have started the first combination with Rosevestin. I think we have a unique opportunity because it's a true oral medicine in order to combine that with other products in our portfolio, and hence, that will increase the level of competitiveness. Regarding the pricing, of course, we have seen the official list price of our competitor in the United States. It will not change dramatically our own outlook. Of course, I'm not going to disclose our pricing strategy moving forward. It also depends on what we are going to see in our clinical trials. But overall, I think we are well on track in order to develop a very competitive oral PCSK9 moving forward.

So just picking up on the question about EV and CLARITY-Gastric. After I'm going turn it over to Susan, who can talk a bit more about the life cycle plan beyond CG01, but we're very excited about these results. and look forward to getting an opportunity to presenting them soon. Specifically, the CG01 opportunity has potential to be a blockbuster indication. Now some of that will depend, obviously, on indications that we are able to achieve, but the data set looks good. We look forward to sharing it. I think a couple of important points. First, we will pursue discussions across all major markets, U.S., Europe, China, Japan, and throughout the emerging markets. This data set, we think, supports those discussions. Secondly, as you saw, overall survival being an absolute gold standard within this setting, we think, well positioned Sunny V for uptake upon approval. And we expand the definition of Claudin 18.2 positivity with the cutoff that we're using in this study and that cutoff is greater than 25%. And that represents about half of the patients with gastric GEJ So it's a great opportunity and one that we're really looking forward to getting an opportunity to launch as quickly as possible. Susan, do you want to talk a little bit about the life cycle plan beyond CG01?

Yes. So obviously, in the first line, there's an opportunity to combine with IO agents, as I've discussed with both plus backbone of Cape sites been. And the CLARITY-Gastric02 study has two cohorts, one in the PD-L1 greater than 1% but also has a cohort in the less than 1% where we're looking at further fee-based regimen versus a standard of curve as well. So I think that gives us an opportunity to have a broad first-line opportunity to have a IandADC combination in the relevant patient population, and it is a big segment in gastric cancer. And then again, I think there are opportunities to consider based on the data that we've got with whether there's an opportunity to go into the earlier-stage setting. Plus point is not just expressed on gastric cancer but also on some pancreatic cancers and block cancers, and we're exploring those in our ongoing Phase I, and I'm encouraged by the data that we've seen to date. So I think there's going to be a broad program for Sunny V across all of these GI-based cancers.

Thank you, Susan, Dave. Maybe one thing I could add to the PCSK9 is that another fixed dose combo we are developing is with together with -- oral because if you have elevated cholesterol, typically, you also need to lose a bit of weight. This is a good example of how we can differentiate our we also differentiate our by providing convenient formulations to patients who are typically polymedicated in these circumstances. . So next question is, I think, Richard yes, Richard from JPMorgan?

One question, please, on Just now we've seen the persevere data in detail ASCO, I don't think when we last spoke, we'd seen it. Could you give us your latest thoughts around how SERENA-4 could differ in terms of patients enrolled and how that impacts your thinking around potential benefit of CAMI what it could deliver in the trial? And does the data you've seen change your view of the importance of endocrine sensitivity for generating a benefit? And how endocrine-sensitive do you think you have in the trial?

Susan, do you want to...

I'll take that. Yes. Okay. So thanks for the question. So as you said, the goal for SERENA-4 is to enrich for endocrine sensitivity. Again, as a reminder, we have a larger sample size, 1,370 patients enrolled compared to And I think what you've seen with the placebo data is evidence of activity, which varies across the different subgroups there. I can't comment on the exact today. Obviously, we're anticipating the trial readout in the second half of this year. And obviously, we have to wait for that readout to But again, we have striven to enrich for that endocrine sensitive population with the design of those subgroups. And again, I think what we're happy with the SERENA-6 data is the overall tolerability profile that we've seen with low rates of GI, side effects that are seen and a very low discontinuation rate with good tolerability overall in that trial. So I think we have to wait and see at this point, that's why we run Phase III trials, and we're very happy to share the data with you as soon as we have them.

Thanks, Susan. Next question is from Simon Baker at Rothchild.

One, if I may, on simvazertinib. The profile based on the data we've seen so far looks very impressive indeed, against the competition. But I just wanted to get your perspective on how you see the profile of sumbazertinib in that setting. And also the significance or otherwise, the versus near loop mutation performance, it appears to be particularly differentiated on Is that a significant factor? Or is that less important than perhaps you might see?

Okay. So you're talking about -- Pascal, do you want me to take this one?

Yes, please. Yes, if you don't mind. Please go ahead.

Okay. So -- obviously the asset that we've licensed from for exon 20 mutations, but also has activity in a group of mutations that are nonclassical as well, which is about a similar size patient population. So I think one of the profiles that we see overall, first of all, is potent against the exon 20. It's delivering this high and durable response rate there, and really has differentiated activity in that second line setting, which has already provided the label that we've got in the U.S. and China. In the first-line setting, the data were presented at ASCO, so there was an oral presentation at people want to have a look at that. And that will form the basis of the filing in the first-line setting. So we've -- we look forward to having discussions with the regulatory authorities, given the high response rate that we've seen and really good progression-free survival, which was obviously the primary endpoint in that randomized trial. . So yes, I think if you look at that compared with the other competitors in this space, it's oral, easy to administer at home the tolerability profile, I think, is competitive with other agents and the potency is also competitive. So again, we're excited to have this as another agent to build on our legacy in each of our mutant lung cancer.

Thanks, Susan. Maybe go to hear also from Dave telling you about what we're trying to do to solidify the Tagrisso franchise because we are under -- of course, two major competitive on in China, which is the multiple -- the multiplicity of EGFR in a market and very, very competitive market. We're doing well, but it's competitive. And the second is, of course, the Mariposa regimen, which again, we are still doing well. As Dave mentioned before, market share is still very strong for Tagrisso. But beyond that, we are actually trying to build a variety of ways to differentiate Tagrisso. So maybe, David, if you can give us the whole picture again, that would be useful.

Yes, it'd be my pleasure. And let me use this as just an opportunity also to comment that the strength of FLAURA2 is really laying the foundation right now for the expansion of the clinical development plan to build off of the combination approach to a Tagrisso backbone in order to improve outcomes in EGFR-mutated lung cancer. And as Susan quite nicely articulates Zefrovi adds to the group of patients that we now have an opportunity to be able to engage physicians about and offer a new therapy. I think just very, very importantly, we're seeing double-digit volume growth and, in fact, double-digit revenue growth in the U.S. in the face of the competition with Tagrisso right now. What that's allowing us also then to do is get ready for both the data and the Orpathys combinations, which we're looking forward to. I think that with data, obviously, we've got -- in the later lines and also Tropin 114 in the frontline setting. I think relative to what we see with the other TROP2 class players, this is a very differentiated position of having the Tagrisso combination as a way of bringing this set of therapies into these settings. We've got SAFFRON on the horizon, and that's with the Orpathys combination. And we are very enthusiastic about Tagrisso continuing to be an important driver of growth and contributing meaningfully to the 2030 ambition that we've laid out.

Thank you, Dave. So this is a very good example of what we've told you before. The ability we have to combine products through our portfolio to defend our various franchises and build beyond where we are. And then with the addition of -- we are also addressing a gap in our coverage of this the market. So you can see we are really reducing the space where the competition could actually have an impact over time. So the next question will be from Sarita Kapila at Morgan Stanley.

On AVANZAR, we notice as the PFS and OS endpoints in both troupositive and ITT populations. Could you give us any more color on the testing hierarchy? For example, are you looking at PFS and then OS in TROP2 followed by PFS and OS and ITT? And what is the minimum outcome that would be filing enabling? So for example, with a PFS win in TROP2 positive patients, be sufficient without a clear OS benefit. And just a quick one, taking a step back, how should we think about profile versus that TMT particularly post the positive OPTITRUPLUNG-06 data and ahead of the PD-L1/GFdata in 2027?

Thanks, Sarita, good question. Two good questions for you, Susan.

Okay. Thanks, Pascal. Thanks for the question. So as a reminder, what we previously said about AVANZAR is that we have both the ITT and the biomarker-positive patient populations at the top of the multiple testing procedure. So it is possible to get a positive study with success in either the ITT or in the biomarker-positive group. So that answers your first question. Obviously, regulators will be interested in the effect size, the meaningfulness and the differentiation between those groups in discussions. In terms of differentiation from the competitors, I think we have a best-in-class TROP2-based ADC based on the design, which is based on the stable linker. And you can see that based on the half-life of the molecule and also the lower rate of bone marrow toxicity because you see higher rates of bema toxicity with ADCs that have less stable linkers and so more exposure to the free payload. That, I think, underpins the data that we've seen in the triple-negative breast cancer where we saw a differentiated activity with high response rate, progression-free survival and leading to overall survival in that first-line triple-negative breast cancer. So that underpins our confidence in the design of this ADC. I do think that the data that's been seen from the Opto trials in lung cancer the potential for TROP2-based ADCs in this first-line setting in combination with IO. But I think given the design that we have of the molecule and the design that we have at the AVANZAR study with the ability to look at the ITT and the biomarker, we have the ability to be first into first line and to be best based on those combinations and that differentiation. So we look forward to seeing the results. And again, I should just caveat as we do with all of our whilst we're confident in the hypothesis that we got, we obviously have to wait for the Phase III trial. And nobody is keener than I am to see the data. And as soon as we got it, we will share it with you.

Thank you, Susan. Next question is from Gonzalo Artiach with Danske.

Gosalia from Danske Bank. I have one for Sharon, one for Marc. For Sharon, on your TTR depleter. And I know the first three study with ceramic monotherapy, keeps moving as planned. But could you give us some color on how you are seeing this drug moving forward in case the Phase III hits the line? Is it something that you could put out a monotherapy or the -- case would be to get in combination with now, for example, Ambutra given the failed carditis study? I'm just trying to figure out what you're thinking on this molecule phone today? And the second question on Strensiq, and for Marc, you guys are confident on this $3 billion to $5 billion big sales for pivotal based on the results presented so far. But I was wondering if you could give us some color on the dynamics across commercial regions expected between Strensiq and alpha. How should we expect those to playing out in the market?

Thanks, Gonzala. There's probably two questions from Marc actually cause is developed by Alexion. Over to you, Marc.

Gonzalo, thank you for the two questions. So let me take the first one. So to your question on the add-on design, so is -- the trial we are doing on ceramic is as an add-on to either stabilize FMD so [indiscernible] So the trial is not done as a monotherapy. What is very important to understand is the difference of mechanism as the class indicates, is a depleter and therefore, deplete the amyloid burden in the tissues -- amyloid plaque in the tissues. This has been confirmed during our Phase Ib studies over 1 year We have also read across from another product that another depleter that we are developing in another disease [Technical Difficulty] We have seen on this product a very clear outcome benefit both on mortality as well as cardiovascular event following cardiac remodeling as well as improvements of many, many cardiac functions. So it's not the same disease exactly, but we have a reasonably good read across of the depleter mechanism in the treatment of amyloidosis. So for we are expecting the results in the future, and we look forward to demonstrating again the same benefit improvement of cardiac model improvement and outcome benefit in both post mortality and cardiovascular spitalization, and we look forward to these results.

To the second question on Strensiq. So Strensiq today is -- has been on the market since 2015. We do not have a very wide coverage. And I think this is what -- is what going to bring us is going to have a much wider coverage in terms of countries, possibly we would have a wider label than Strensiq, but this remains to be discussed with regulatory authorities.

What -- the big difference between those two products is the greater tolerability of which is remind you, administered every 2 weeks instead of administered either daily or every other day for Strensiq. So there are a big difference in the patient's utilization. And in terms of tolerability, just to give you some numbers, the patients who are on notes alpha, basically have 5 days of injection site reaction on average in a given year. And this is many times low -- many times lower than what is experienced with Strensiq. We also know that the retention of Strensiq is often impacted by this issue tolerability. So that's why we are -- we remain confident that in since will grow in terms of number of countries in the brands of patients and also in the retention of patients on the

Thank you, Marc. And maybe going back to Gonzalo see from a -- Marc's response that can be used as monotherapy, but it can be used on top of -- can be used on top of have stabilized. Of course, we'll have to show that it had something, but that's potentially a broad use for this agent. Next question is Sachin Jain at Bank of America.

One financial -- one is financial. Could you talk about balancing the investment in pipe and launches that are Aradhana talked to versus delivering margin expansion. So as we think about 2H '26 and '27 cost growth, is the 1H R&D SG&A cost growth of 6%, a good proxy? Or should we think about acceleration into second half of this year and into next year? And then quick hits on one -- biopharma '27 pipe. So Cambria on the switch study due next year, perhaps us and you could just talk to how you think about the probability of success in that study relative to 4 and where it sits on the endocrine sensitivity continuum. And then one for Ruud, Farxiga life cycle management, just a simple question. You've got substantial peak sales of almost $10 billion across the various fixed those combos, concerns us basically, has nothing. Where do you think consensus is missing on these assets?

So that's great. And Sachin, thank you. You have -- you are very ambitious with many questions, but we lack ambition. So maybe Aradhana could cover the first one, then Susan and then Ruud -- Is that okay, Aradhana, will you start?

Great. Thank you, Sachin. So for 2026, we have given, obviously, our revenue and EPS, and we give, I think, enough detail on other line items as you've seen, whether it's on R&D or some of the other moving parts on gross margin and other income, et cetera. So I think for 2027, we will obviously give guidance for 2027 at the beginning of 2027. We will start our sort of annual budgeting process later this year. So we started that in a few months. And as you know, there's a lot more readouts still to come and investments still to make, whether it's on too or we'll see how some of the other events read out. So all of that is going to be part of our planning. And we base our guidance for 2027 or any year, we base our guidance on our budget and on our planning process. So we'll give more view on that when we do that early next year. Susan?

Okay. Thank you. So thanks for the question about CAMBRIA-1. Just as a reminder, CAMBRIA-1 is an extended adjuvant trial in patients with intermediate to high-risk hormone receptor positive and HER2 negative breast cancer. So it's already been well established that extension of duration of endocrine therapy in this adjuvant setting improves outcomes. By taking patients who've completed 2 to 5 years of adjuvant endocrine therapy with or without a CDK4/6 inhibitor, which is this switch design and randomizing them to continuation of AI or tomoxfone -- We're actually taking what is an endocrine-sensitive patient population. The patients that have got higher risk factors will likely have progressed through the initial period of adjuvant treatment. And by focusing on the intermediate or high risk, we're taking out those patients with lower-risk disease were likely ordered with current standard of care. So I think it does select for an endocrine-sensitive patient population in a setting where endocrine intensification has already been proven with other trials. So I think from that perspective, and given the profile that we've seen with of tolerability and efficacy within the Sun study, I think it has a good probability of success together with data that we've seen from a competitor in the adjuvant setting.

Okay. Thanks, Susan. let me quickly address the question of Sachin regarding the combinations. We have currently three combinations in development. All those combinations are addressing patient populations where there's a high risk and where there is almost no current treatment. So if I take Zebedepa as one example, it's a Phase III. It has recruited very fast, clearly showing the high-medical needs in proteinuric CKD. Those patients are very ill. The kidney function is declining, and we know the beneficial effects of dapagliflozin. And on top of that, we hope to see a beneficial effect of endothelium receptor antagonist. The other one is in heart failure patients with a low eGFR, where mortality is very high, normally twice, as you see normally in a heart failure patient, and there's no data available. So again, it's a highly, highly risky patient population the estimates of the Epi data has shown that more than 12 million patients in the top 8 markets are eligible for treatment like this. So it clearly shows the potential if the study is reading out. Both of those fixed those combinations, we're expecting to see data in the first half of 2027. And then last but not least, Paxostatand the combination with -- also that is in a high-risk population in chronic kidney disease and hypertension. We know that hypertension is a very important risk factor for the development of chronic kidney disease. And we hope to see a slowdown of the progression of kidney disease. So again, a high-risk patient. And I think not everyone is, let's say, addressing and seeing the potential of those new combinations. Those are really new molecular entities if they are successful. So I think building on the massive experience we are having is definitely 60 million patients are currently treated with detcleflozin. I think it's the backbone of heart failure and chronic kidney disease patients. And adding those new mechanisms hopefully will lead to a much more beneficial effect, both from a mortality perspective, but also from a kidney disease progression perspective.

Thank you. I had not realized we had many more questions in the line. So if we can stick to one question per person, it would be great. . Graham Parry at Citi.