Transcript: AstraZeneca Q2 2026 Earnings Conference Call

On Monday, AstraZeneca (NASDAQ: AZN ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary AstraZeneca reported a 6% growth in total revenue for the first half of 2026, driven by strong demand for innovative medicines, with an 11% growth when excluding the impact of generics on Farxiga and Brilinta.

The company achieved positive results from six key Phase 3 programs and secured 30 major market approvals, including new approvals in breast cancer and hypertension, enhancing its pipeline toward the 2030 target. AstraZeneca reiterated its full-year guidance, expecting total revenue to increase by mid- to high-single-digit percentages and core EPS to grow by low double-digit percentages. The Oncology segment saw a 15% revenue increase, fueled by double-digit growth in major regions and strong performances from key medicines like Tagrisso and Calquence.

BioPharmaceuticals faced a 5% decline in total revenue primarily due to loss of exclusivity for some products, although respiratory and immunology segments showed promise with 11% growth. The Rare Disease portfolio grew by 11%, with Ultomiris and Strensiq driving growth, supported by new launches and increased patient demand. The company emphasized its strategic focus on transformative technologies and platforms that will support growth beyond 2030, including advancements in ADCs and next-generation IO bispecifics.

Management expressed confidence in achieving its 2030 revenue target of $80 billion, citing the strength and diversity of its pipeline and continued strategic investments. Full Transcript OPERATOR Good morning to those joining from the UK and the US, good afternoon to those in Central Europe and good evening to those listening in Asia. Welcome to AstraZeneca's half one 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 utilise 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. There will be an opportunity to ask questions after today's presentation.

Please use the Raise a Hand feature to indicate you wish to ask a question at any time during the call and with that I'd now like to hand the conference over to the company. Joris Silon, Head of Investor Relations 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, our 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 US dollars unless 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. Pascal Soriot, Chief Executive Officer Thank you, Joris, and welcome everyone. I'm really pleased to report that in 1H26 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 strengths 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 six key Phase 3 programs including three new molecular entities. We secured 30 major market approvals across our diverse portfolio, including the first approvals for two Etkama in breast cancer and Bexfendi in hypertension, and increasing our number of approved NMEs 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 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 CVRM, in particular Farxiga and Brilinta.

We delivered strong growth in the US, 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 growth. Move to the next slide please. An important message for today is that when we set our 80 billion revenue ambition for 2030, we did so based on the strengths of a broad and 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 TTR Transform 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 that transformative science carries inherent risk and that not every program will succeed. 2-positive gastric cancer. We also received eight major market approvals across important indications including two additional NMEs. We're very happy to see first approvals for ETC in first-line hormone receptor-positive breast cancer with emergent ESR1 mutations in Europe and Japan and a few other countries.

These approvals demonstrate the value of this innovative treatment approach and we continue to have constructive discussions with the US FDA. We also saw US FDA approval for Bexfendi 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've 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 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. Aradhana Sarin — Executive Director and Chief Financial Officer 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 Datraway and Tezspire 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 FluMist and Bifortis. 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 2b results for oral GLP-1 molecule elekoglipron, we have now initiated a comprehensive Phase 3 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, T-cell engagers, in addition to our CVRM portfolio.

Core SG&A expense also increased by 6% in the first half. During this period, we launched Bexfendi in the US following FDA approval in May and we continue to make pre-launch investments ahead of the anticipated launch of tozorakimab following positive Phase 3 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 six 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 one-time adjustment to deferred tax assets following certain internal legal entity changes. Overall, core EPS grew by 11% in the first half in line with our guidance for the full year. Point 2 billion in the first half, a 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 US loss of exclusivity for Farxiga.

We expect these working capital effects to persist through the remainder of the year before normalizing. 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 a third in 2026. Key investments include our new ADC manufacturing facility in Singapore along with several other strategic multi-year projects that will enhance our manufacturing network and support sustainable growth well into the next decade. 2 billion upfront payment for the CSPC collaboration which closed during the second quarter.

5 billion relating to prior business development transactions. We have announced new BD transactions totaling just over US$2 billion in upfront payments year to date, including the most recently announced diesel transaction. Our lease liabilities also increased as we opened our new Kendall Square R&D centre in Cambridge. Our capital allocation priorities remain unchanged.

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 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. Dave Fredrickson, Executive Vice President, Oncology Business Unit Thank you, Aradhana. Next slide, please. 1 billion, underpinned by double-digit growth in all major regions.

Growth in the US and Europe was particularly notable at 18% and 16%, respectively. 9 billion, supported by double-digit growth in the US. 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 US, 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 US market is evolving with competitive entrants, VOLGA will continue to expand Imfinzi's reach. Turning to Enhertu, 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 US 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-US markets, with the US opportunity at peak in the breast indication. Beyond breast, we are looking forward to bringing Truqap to patients with PTEN-deficient metastatic hormone-sensitive prostate cancer following the recent approval of CAPItello-281 in the US, and a near-term priority is to establish testing in the setting, which today is not common practice.

Datrowa 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 US. We're excited for the ongoing launch of Datrowa in patients with triple-negative breast cancer who are not candidates for immunotherapy following the US 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 number one 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.