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Strengthening AstraZeneca’s commitment to diabetes patients AstraZeneca Global Operations welcomes you! January 2014. Subject to deal completion , local legislation and consultation requirements. Welcome from David Smith . EVP, Operations & IS.
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Strengthening AstraZeneca’s commitment to diabetes patientsAstraZeneca Global Operationswelcomes you!January 2014 • Subject to deal completion , local legislation and consultation requirements.
Welcome from David Smith EVP, Operations & IS “ I would like to welcome all on-boarding employees from BMS and Amylin. Diabetes is a key strategic area for us and we’re really looking forward to you joining our organisation. I hope to see many of you soon as I come to visit the sites, but before that – don’t hesitate to raise any questions or concerns with your line manager or HR support who will help you finding the relevant answers.” January 2014
Content Introduction to AstraZeneca Introduction to AstraZeneca Global Operations Operations strategy and information about our E2E supply chain January 2014
We are... An innovation driven, global, biopharmaceutical company Our mission is... To make a meaningful difference to healthcare through great medicines January 2014
A global business 50,000 employees. Research across 3 continents. $4 billion invested in R&D in 2012. Manufacturing in 16 countries. Sales in 100 countries. $28 billion sales in 2012. January 2014
\ A range of life-changing medicines January 2014
AZ strategy 2013 Our strategic priorities Achieve scientific leadership – deliver great medicines to patients through our unique capabilities in small molecules, biologics, anti-body engineering and immunotherapies Return to growth – focus on key franchises and markets to drive growth, including Brilinta, diabeties and emerging markets Be a great place to work – build a culture that is science and patient-focused, agile and high-performing, which attracts, develops and retains great people. A company that the best people want to work for and choose to work with Achieve Scientific Leadership Return to growth Be a great place to work Enablers Business Development Productivity Improvements Our strategic priorities are enabled and accelerated by productivity improvements and business development activity. January 2014
Our values and associated behaviours Values Behaviours • I am curious about science and proactively develop my knowledge. • I ensure that scientific and business decisions are based on strong science. • I seek partners and collaborators that share our passion for science. We follow the science • I hold myself and others to account for making decisions in the best interests of patients. • I think of patients as people and tailor solutions and approaches to meet their needs. • I seek to understand the healthcare environment and external trends. We put patients first • I prioritize relentlessly and make the right strategic choices to win in the future. • I set high standards for myself and others, making courageous choices to ensure success. • I seek the best talents and develop winning teams. • I leverage the strengths and diversity within and beyond AZ to create value. We play to win • I do the right thing and act with integrity, even when it is difficult. • I take personal accountability for my actions and for the success of AZ as a whole. • I persistently challenge actions or decisions that are not aligned with our values. • I speak the truth, including dissenting views and hard feedback, even when it is uncomfortable. • I treat my colleagues with respect and candor. We do the right thing • I act with urgency, take smart risks and learn from both success and failure. • I am resilient and relentless in pursuit of excellence. • I collaborate with colleagues internally and externally to seize opportunities and make decisions with speed. We are entrepreneurial January 2014
Science Units Global Commercial AstraZeneca Value Stream AstraZeneca Operations Operations January 2014
Stock Keeping Units (SKUs) Operations Scale • i.e. methods to take a medication other than being absorbed by the Gastro-internal tract, e.g. injection • Over 128 million devices (including Turbuhaler, Sprays, Pre-Filled Syringes (PFS) Syringes, patches) • Over 1.1 bn packs supplied to patients 2011 • Manufactured and supplied • Approximately 10 000 employees in the network • 10,000 employees • 1.1 bnpacks • 128 m devices • 243 parenterals • 7600 SKU’s • 24.1 bntablets / capsules January 2014
Operations is organised into: Four areas/regions: Supply Americas; Supply Europe, Middle East and Africa; Supply Asia Pacific and Supply Biologics. Three global functions: Global External Sourcing; Global Quality; and Global Supply Chain & Strategy. Two corporate functions: Global Procurement and Corporate IT. January 2014
Global Operations Senior Leadership Team EVP, Operations & IS David Smith VP, Operations & EnablingFunctions HR Juliette White VP, Operations Finance Gary Rourke VP, Compliance Alan Horowitz Head of Operations Communications Magdalena Fahlén SUPPLY SITE REGIONS CORPORATE GLOBAL RVP, Supply Americas Kathy Monday SVP, Global Supply Chain & Strategy Ken Murtha Chief Procurement Officer Ashley Readshaw Chief Information Officer David Smoley RVP, Supply EMEA Marc Jones VP, Operations Quality Sharon Bleach RVP, Supply Asia-Pacific Stuart Anderson VP, Global External Sourcing Dapo Ajayi RVP, Supply Biologics Andrew Skibo January 2014
24 production facilities in 16 countries Sweden, SödertäljeSnäckviken Gärtuna Vorsino, Russia UKAvlonMacclesfield Speke ChinaWuxi ChinaTaizhou Germany Wedel Netherlands Nijmegen USANewarkWestborough Frederick, Maryland Philadephia Puerto RicoCanovanas JapanMaihara FranceReims Dunquerque MexicoLomas Verdes EgyptKairo India Bangalore Brasil Cotia IndonesiaJakarta ArgentinaBuenos Aires AustraliaNorth Ryde January 2014
Our networkincluding the BMS sites 27 production facilities in 16 countries Sweden, SödertäljeSnäckviken Gärtuna Vorsino, Russia UKAvlonMacclesfield Speke Mt Vernon, Indiana (2015) ChinaWuxi ChinaTaizhou Germany Wedel West Chester Ohio San Diego, California Netherlands Nijmegen USANewarkWestborough Frederick, Maryland Philadephia Puerto RicoCanovanas JapanMaihara FranceReims Dunquerque MexicoLomas Verdes EgyptKairo India Bangalore Brasil Cotia IndonesiaJakarta ArgentinaBuenos Aires AustraliaNorth Ryde January 2014
Supply Sites – EMEA 1 2 4 6 3 1 7 Södertälje, Sweden Year opened: 1913 Snäckviken, 1975 Gärtuna Activity: API, Formulation, Device manufacture, NPI launch site OSD, Packing Products: API:Metoprololtartrate; Metoprololsuccinate; Formoterol Terbutalinsulphate; Ticagrelor, Felodipine, Esomeprazol natrium, Omeprazol natrium BFS: PulmicortRespules, BricanylRespules, XylocainPolyamp, NaropinPolyamp , CarbocainPolyampMarcainePolyamp,MarcainFentanyl. Freezedried / Pumpspray: Rhinocort Aqua, Xylocain Pumpspray, Nexiumi.v, Losec i.vNEXIUM / LOSEC:Losec capsules, Losec MUPS, Nexiumtablets, Nexiumcapsules, Entocortcapsules, Axanum, Vimovo, Cobalt MULTIPURPOSE: Atacand, Bambec, Imdur, Seloken/Seloken ZOC, Logimax / Avlotran, Unimax, Plendil, Bricanyl, Bambec, Brilique / Brilinta, Losec-EC, Entocort – Enema, TBH: Symbicort, Pulmicort, Oxis , Rhinocort Packing: Global & Regional markets Number of employees: ~3000 Markets supplied: Global Plant, North America, Latin America, EMEA, AsiaPacific 5 2 Macclesfield, UK Year opened:1965 Activity:Global device manufacture and tablet formulation, Global packing for small volumes and Regional packing, Pharm Dev’t, IT-hub, Global QC import & Stability Testing Hub Products: Device Manufacture: Zoladexand Zomig Nasal Spray, Tablet formulation: Seroquel IR & XR, Tenormin, Zestril, Inderal IR, Accolate, Iressa & Nolvadex Packing: Solid dose: Accolate, Arimidex, Caprelsa, Casodex, Crestor, Iressa, Nexium, Nolvadex,Seroquel IR, Seroquel XR, Tenormin / Tenoretic, Zestril / Zestoretic, Zomig / ZomigRapimelt Packing parenterals /devices: Cubicin, Diprivan PFS & DiprivanAmps/Vials, Faslodex, Merrem, Zoladex, Zomig Nasal Spray Number of employees:~1000 Markets supplied:Formulationand packing for small volumes to global markets, packing for EMEA January 2014
Supply Sites – EMEA 1 2 4 6 3 3 7 Dunkerque, France – Product specific site Year opened: 1990 Activity:Device manufacture, formulation and packing of dry powder inhalers and pressurisedmetered dose inhalers for asthma treatment Products:BricanylTurbuhaler, SymbicortpMDI/Vannair / Frevia Number of employees:329 Markets supplied:Bricanyl TBH (to ~35 markets) SymbicortpMDI to US, South America and Europe (Vanair/Frevia) 5 6 4 Wedel, Germany Year opened: 1978 Activity:Regional Packing Products: Seloken, Atacand, Nexium, Plendil, Seroquel, Crestor, Losec Number of employees:129 Markets supplied:EMEA Avlon, UK – Product specific site Year opened: 1969 Activity:Bulk Manufacture API Products:Quetiapine(for Seroquel) and Rosuvastatin (for Crestor) Number of employees:214 Markets supplied:Global 5 7 Egypt – Market Access Site Year opened: 2006 (Cairo) Activity:Formulation and packing of tablets for supply to the Egyptian market Products:Arimidex, Atacand, Bambec, Casodex, Crestor, Imdur, Inderal, Logimax, Nolvadex, Nexium, Plendil, Losec, Rhinocort, Seroquel, Symbicort, Tenoret, Tenoretic, Tenormin, Zestoretic & Zestril Number of employees:72 Markets supplied: Egyptian Market Reims, France Year opened: 1971 Activity:Regional Packing & Distribution Centre Products:Crestor, Zestril, Tenormin, Inderal, Bambec, Logimax, Nolvadex, Casodex, Atacand Number of employees:200 Markets supplied:Packing for EMEA markets; Distribution to France & MENA January 2014
Supply Sites – Asia Pacific & Japan 2 6 3 4 5 3 1 1 North Ryde, Australia Year opened: 1969 Site leader:Mark Morgan Activity & Products:Currently manufactures and supplies PE Polyamps (BFS Global single-source supply), Respules, Polybag (Global single-source supply) and Glass Vials secondary Packaging Number of employees:400 Markets supplied: 35 Markets Wuxi, China Year opened: 1999 Site leader: Marc Howells Activity: Tablets, aerosols and lyophilized powders for injection are produced and packed Products: Accolate, Atacand, Arimidex, Bambec, BamylBrilinta, Bricanyl, Casodex, Crestor, Cubicin, Diprivan, Entocort, Inderal, Imdur, Iressa, Losec, Nexium, Nolvadex, Plendil, RhinocortSeloken, Seroquel IR, Seroquel XR, Tenormin, Vimovo, Zestril, Zoladex, Zomig Number of employees: 704 Markets supplied: China Formulation for: UK Sweden Germany France Brazil Packing for: Australia Hong Kong India Indonesia Korea Malaysia, New Zealand Singapore, The Philippines Thailand, Vietnam 5 Jakarta, Indonesia Year opened: 2010 Site leader: RizmanAbudaeri Activity:Bottle packing for export and repacking for domestic Products:Bottle packing of Inderal, secondary packing for Emla, Bricanylrespules, Losec Injection, Pulmicortturbuhaler, Xylocaine, Zoladex, Casodex Number of employees:33 Markets supplied:Australia, Malaysia, Indonesia, Taiwan 2 Maihara, Japan Year opened: 1998 Site leader: NicklasWesterholm Activity:Inspection & packing Products:Primary /Secondary packing of oral solids, including Splendil, Seloken, Omepral, Bricanyl, Zestril, Zomig, Casodex, Novladex, Arimidex, Iressa, Accolate, Crestor and Nexium Secondary packing of Turbuhalers, Respules, Zoladex and Liquid products, including Marcain, Xylocaine, Carbocain, Omepral, Bricanyl and Diprivan Total SKU’s 170 Number of employees:200 Markets supplied: Japan 4 Bangalore, India Year opened: 1981 Site leader: Rob Haxton Activity:Manufactures active pharmaceutical ingredients (API) and finished dosage forms Products:Betaloc, Imdur, Ramace, Crestor, Seloken XL, Bricanlydurales, Bricanyl tablets Number of employees:247 Markets supplied:India 6 Taizhou China Year opening: End2014 Site leader: Steve Fishwick Activity: Oral solids manufacturing final scope to be confirmed. Number of employees: 150 (Sept 2013) January 2014
Supply Sites – Americas 1 2 3 4 3 1 Lomas Verdes, Mexico Year opened: 2000 Activity:Formulation (tablets) & Packing (blisters, sachets, TH, Injectables) Products: Formulation: InderaliciinTenoretic, Tenormin, Zestril, Zestoretic Packing: Crestor, Naropin, Nexium, Plendil, Symbicort, Zoladex, Zomig Number of employees:~150 Markets supplied:CAMCAR, Mexico, Venezuela, Colombia, Peru 5 Westborough, USA Year opened: 1983 Activity:blow-fill-seal, sterile formulation and packaging Products: PulmicortRespules Number of employees:~180 Markets supplied:US, Canada, Mexico, Turkey, Poland, Belgium, Luxumberg 6 5 6 Cotia, Brazil Year opened: 1976 Activity:Formulation (uncoated tablets, creams & ointments, liquids) & Packing Major Products: Formulation: Bambec, Bricanyl, Brilinta, Budecort, Emla, Fulcin, Inderal, Seloken, Tenoretic, Tenormim, Tetmosol, Xylocaine, Xyloproct, Zestril, Packing: Arimidex, Atacand, Casodex, Crestor, Losec, Nexium, Nolvadex, Plendil, Selozok, Seroquel, Zoladex, Zomig Number of employees:~200 Markets supplied:Brazil, CAMCAR, Mexico, Argentina, Peru, Colombia, Venezuela, Chile and Uruguay Haedo, Argentina Year opened: 1947 Activity:Sterile & Topical Formulation:(injectables, semisolids, liquids); Regional Packing Center for Southern Cone (primary, secondary, and tertiary packing in vials, ampoules, tablets, capsules, etc.) Products: Formulation: sterile & topicals products including Xylocaine & MarcainePacking: various brands including Arimidex, Atacand, Crestor, Etisal, Marcaine, Nexium, Tenormin, Vimovo, Xylocainealong with 2nd & 3rd brands and generics Number of employees:~130 Markets supplied:Argentina, Uruguay, Paraguay & Chile 2 Newark, USA Year opened: 1971 Activity: Formulation (solid oral dose), North American Packing (bottles, blisters, wallets, hospital unit doses, samples; secondary pack injectables) and Distribution Center Products: Formulation:Arimidex, Seroquel IR & XR; Brilinta (in 2015) Packing: Arimidex, Atacand, Brilinta, Caprelsa, Casodex, Crestor, Dutoprol, Entocort, Imdur, Iressa, Losec, Nexium, Plendil, Seroquel, Tenoretic, Tenormin, Toprol-XL, Vimovo, Zestoretic, Zomig, Zoladex Number of employees: ~270 Markets supplied: North America and RoW for Arimidex & Seroquel bulk tablet supply 4 Canóvanas, Puerto Rico (iPR) Year opened:2000 Activity:Formulation Products:Accolate, Caprelsa, Casodex, Crestor, Tenoretic, Tenormin, Zomig Number of employees:~270 Markets supplied:Global (US & RoW) January 2014
Biologics manufacturing sites – USA and Europe 3 4 1 2 3 4 Philadelphia, USA Year acquired: 2002 Site Lead: Scot DeAthos Address: 3001 Red Lion Road, Philadelphia,PA 19114 Activity: • Manufacture • Fill and finish • Label and pack • Warehousing Major Products: • FluMist • FluEnz Number of employees: • 111 Markets supplied: • USA • Europe • Israel • South Korea • Canada • Hong Kong Frederick, USA Year opened: 1998 Site Lead: Douglas Scott Address: 633 Research Court, Frederick. MD 21703 Activity: • Manufacture Major Products: • Synagis • All products under TPN external • Merck P106 Number of employees: • 406 Markets supplied • USA • Europe • Japan • Speke, UK • Year opened: 2003 • Site Lead: Mike Austin • Address: Renaissance Way, Boulevard Industry Park, Liverpool. L24 9JW • Activity: • Vaccine Candidate Selection • Process Development • Manufacture • Major Products: • FluMist • Fluenz • Number of employees: • 190 permanent • Markets supplied: • USA • Europe • Nijmegen, Nederlands • Year opened: 1994 • Site Lead: Louis van der Wiel • Address: Lagelandseweg78 6545 CG Nijmegen The Netherlands • Activity: • Manufacture • Fill and finish • Label and pack • Major Products: • Synagis • Ethynol • Clinical • Number of employees: • 57 permanent • 8 temporary • Markets supplied: • Europe • USA • Rest of World 1 2 January 2014
Supply Chain Leadership Drive Performance in the 3Vs A more constant flow of products Optimized stock levels Demand planning Effective end-to-end planning and execution to plan ‘Manufacture Me’ for visibility The three V’s will take our Supply Chain to the next maturity level - Horizon 3! January 2014
Return to Growth One team demonstrating enterprise thinking January 2014
A Great Place to Work Strategy, Culture, Values We follow the science We all have a role to play in our strategy and culture. Our new values will lead the way. We put patients first We play to win We do the right thing We are entrepreneurial January 2014
Expected Outcome 2013 - 2017 An Excellent Supply Chain! January 2014
Global Operations Supply Chains: A core part of the AZ Value Chain New Product Introductions API Formulation Packing Distribution to customers Patients Late stagedevelopment AZ end-to-end Supply Chain Our supply chains are designed to balance excellent availability with best in class cost to serve. We establish new supply chains to get the right amount of product, at the right quality in the right quantity to the right place at the right time, whilst minimising risk. AstraZeneca’s strategy is to outsource all manufacture of Active Pharmaceutical Ingredient (API) within the next 5-10 years. Currently more than 60% of API volume are sourced externally and the rest is done in-house in Sweden, India and UK. We understand and respond quickly to customer demand. We follow a robust process to ensure we get formulation right first time and minimise waste. We optimise the trade off between batch size and manufacturing frequency. We pack to ensure robust and reliable supply to meet demand, whilst giving final assurance for the quality of our medicines before they are distributed to customers. We have stock held across a network of distribution centres designed to balance high service levels to our paying customers with supply chain cost. We collaborate with our Commercial colleagues and external customers to drive added value through distribution (e.g. Distribution direct to patient). What does excellence look like ? In-house Outsourced Predominately in-house In house In house / outsourced January 2014
How our supply chain works... How do we do it? Global Operations gets involved early in the development process to design and establish commercial supply chains We support in-licensing activities, providing input into valuation of the deal and support for deal term negotiation. • What is it? • Working in close collaboration with Pharmaceutical Development and Commercial to: • Design and establish new product supply chains, for in-house or partner products. • Deliver successful global launches. What does excellence look like? We establish supply chains that are optimised both from a short and long term perspective. We launch all products on time and in line with agreed time lines. New Product Introduction (NPI) How will we achieve excellence? Continue to work in close partnership with our internal and external partners. Ensure we have the capability needed to support innovative science and devices. Where are we now versus excellence? We have a strong NPI capability and a strong history of successful delivery. Our future holds challenges as our portfolio changes to include many biologics launches, more specialty care products and new innovations in R&D. We’re building our capability and understanding to ensure we deliver those launches in the best way. January 2014
How our supply chain works How do we do it? Today we are manufacturing API in-house in Sweden, India and UK. We source API externally from ~80 suppliers world wide. Our long term strategy is to outsource API because suppliers often have the scale and expertise to manufacture to our standards at competitive cost, whilst allowing us to scale our manufacture up and down in line with demand. What is it? Active Pharmaceutical Ingredients (API) are the chemical compounds which provide the pharmacological activity that make our medicines effective. API What does excellent sourcing look like? Our ambition is to “‘Deliver ethical, robust and responsive external supply of API for AZ, at the lowest ‘total cost of supply’ throughout the product life-cycle.” We are also looking for suppliers that have overall good performance in license to operate and embrace AZ’s aspirations for environmental sustainability. How will we achieve excellence? To achieve excellence we will create a supplier base which can offer robust supply, continuous improvements in costs and can respond with high flexibly to changing demand patterns. To achieve our ambition we aim to have closer relationships with fewer suppliers while maintaining competitiveness. Where are we now versus ‘excellent sourcing’ standards? We have worked hard to build pharma-industry leading collaboration through Global External Sourcing. We are using global API suppliers and majority of new business is going to our strategic partners. In these partnerships we are starting to further enhancecooperation in areas such as risk management and Supply Chain excellence. January 2014
How our supply chain works How do we do it? Predominately internally, some outsourced using external suppliers for unique technologies and capacity beyond the capped internal capacity. Our 24 sites across the network master a range of techniques so that we in an agile way can ensure reliable supply to patients independent of formulation. What does excellence formulation look like? A high quality, low cost, predominately internal formulation supply network, that effectively adapts to changing market, political and economic trends through the primary use of multiple, capacity-capped, global supply locations. What is it? The process whereby API and excipients are chemically combined to produce medicine; solids or non-solids. All our medicines must meet our specifications from safety and efficacy to shelf life. Formulation • How will we achieve excellence? • Always reinforce our Lean principles; SHE, Quality, Service and Cost • The formulation flow should reduce upstream variation • Minimal lead time variation • Ensure flexibility across our sites, dual sourcing is our preference Where are we now versus excellence? Really good performance on SHE, Quality, Service and Cost – needs to be maintained and further improved. Focus on improving the Supply Chain 3 Vs; Velocity, Variability and Visibility. January 2014
How our supply chain works How do we do it? Our strategy is to primarily pack in-house. We have an approach to pack regionally for Oral Solid Dose (OSD). For non OSD we pack close to where products are formulated. What does excellence packing look like? Highly standardised packaging with responsive and agile supply response. The standard packaging is optimised to align with our customer needs. High levels of OEE and capability to pack large and small volumes What is it? Primary, secondary and tertiary packaging of Oral Solid Dose and other product types. Conversion of formulated products into sales pack that our patients will receive. Packing • How will we achieve excellence? • Standardisation of components • Lean approach to reducing variability and increasing OEE Where are we now versus excellence? We need to drive standardisation further. We need to continue to develop Low Volume Packing Capability. Optimise the range to remove unnecessary complexity. January 2014
How our supply chain works How do we do it? We store finished packs in Distribution Centres (in sourced and out sourced) across the world and deliver to our paying customers (patients, pharmacies, wholesalers, hospitals) on receipt of their orders. What does excellence warehousing and distribution look like? An agile network of Distribution Centres and transport solutions designed to respond to a diverse range of customer requirements enabling competitive advantage for AstraZeneca through excellent service, high levels of efficiency and responsiveness to changing demands. What is it? The processes by which we store and deliver our finished packs from the packing site to the paying customers. Distribution to customers How will we achieve excellence? Through excellent partnership both with our Commercial colleagues to understand the business opportunities and with our internal and external distribution partners to deliver this. Where are we now versus excellence? Some pockets of industry leading practice, but some way behind other industries who have used distribution as a strategic level for some time (e.g. FMCG). January 2014
Confidentiality Notice This file is private and may contain confidential and proprietary information. If you have received this file in error, please notify us and remove it from your system and note that you must not copy, distribute or take any action in reliance on it. Any unauthorized use or disclosure of the contents of this file is not permitted and may be unlawful. AstraZeneca PLC, 2 Kingdom Street, London, W2 6BD, UK, T: +44(0)20 7604 8000, F: +44 (0)20 7604 8151, www.astrazeneca.com January 2014