Okay. Good afternoon, good morning, everybody. It's Pascal Soriot here CEO of AstraZeneca. Welcome to full year 2018 results Presentation Conference Call and Webcast for Investors and Analysts. We have a live audience here in London and we have people also on the phone and the webcast. As always, the presentation is available on the website astrazeneca.com for you to download and we've also sent it out to people on our distribution list earlier today. Please turn to slide 2. This is the usual Safe Harbor statement. As a reminder, today we will be making comments on our financial performance using core reporting metrics and at constant exchange rates, CER, which are both non-GAAP measures. We'll also discuss other non-GAAP measures where helpful for investors and for analysts. All numbers that we refer to are in million U.S. dollars and growth rates are at CER and for full year 2018 unless we state otherwise. If you move to slide 3. We're going to spend 45 minutes on our presentation and then leave the same time for Q&A. For those who are on the phone, as a reminder, you can get in the queue by pressing “star” “one.” There is also an option to ask questions online as part of the webcast. We would like everyone to get an opportunity to ask questions and so I’ll ask as always, if you can limit yourself to one question per person and I know you will not listen to me, but I still have to try. So thanks very much in advance for that. Today, I'm joined by Dave Fredrickson, our Executive President of Oncology; Ruud Dobber, our EVP for BioPharmaceuticals, which we will sometimes refer to as BioPharma, which covers cardiovascular, diabetes and renal and also respiratory disease; Marc Dunoyer, our Chief…

Thank you, Pascal. I appreciate the introduction. So I want to take an opportunity now to update on the performance of our oncology portfolio with particular focus on our new oncology medicines. And then I'll hand it over to Ruud who will walk us through the update on CVRM respiratory and emerging markets. So with that if you can turn to Slide 14 please. I'm very pleased to share the results from 2018. It was a strong year for oncology. We delivered sales of $6 billion and we grew at 49%. Total growth was $2 billion with $1.9 billion coming from our new oncology medicines. And as we look specifically at the lung franchise Tagrisso and Imfinzi continued their launch rollouts in the new indications of first-line EGFR mutated non-small cell lung cancer and also an unresectable Stage III non-small cell lung cancer. Lynparza continues to cement itself as the leading PARP inhibitor. And at the end of December, it was the first PARP inhibitor approved in the first-line ovarian cancer setting across the globe with the FDA approval that happened in the U.S. We continue to see encouraging uptake of Calquence in the smaller mantle cell lymphoma indication as we prepare for the larger chronic lymphocytic leukemia indication with pivotal readouts from our Phase III studies happening in the second half of this year. I won't talk much about it beyond this, but our legacy business is also something that we're quite proud of. Faslodex achieved blockbuster status in 2018, crossing the $1 billion mark and this really was a function of expanded labels in combination with CDK4/6 inhibitors and metastatic hormone receptor positive breast cancer. And I speak to our ability to do great life cycle management but also commercial execution. So we can turn now to slide…

Many, thanks Dave. And I'm really excited for the first time to present the new CVRM and respiratory business. Total sales of the two therapy areas amounted to $8.9 billion in the year growing at 7%. We're very pleased with the continued growth of Farxiga and Brilinta and the first strong year we have seen the successful launch of Fasenra. We look to build on this growth including through further launches for Lokelma during 2019. Please turn to slide 20. Moving to new CVRM. Sales were up 12% despite intense competition in diabetes with full year sales at $4 billion. Growth for both Farxiga and Brilinta remain strong with double digit increases globally. Farxiga delivered sales of $1.4 billion in the year with 30% growth, maintaining volume market share leadership globally. Gross rates in the fourth quarter were impacted by the U.S. gross to net adjustments in the same period of 2017. Farxiga saw U.S. growth of 21% in the year versus 2017 gaining in-class market share due to improved market access and ongoing growth in the SGLT2 markets. We look forward to engaging the regulatory authorities to strengthen the label following the DECLARE readout and Mene will discuss the DECLARE data later. Outside the U.S. where we have 58% of our global sales, we have seen encouraging performances with volume-driven growth increasing. Europe up 24% and emerging markets up 52%. Brilinta delivered sales of $1.3 billion with 21% growth in the year driven by a very strong performance in the emerging markets up 48%. Furthermore, we have continuous growth in the United States and Europe, up 16% and 13% respectively. We continue to be very pleased with the performance of Brilinta. The auto-inject Bydureon BCise continued its growth, but sales in the fourth quarter were impacted due to supply…

Thank you, Ruud, and hello, everyone. I will walk you through our financial performance for the year 2018 and then talk about the guidance for 2019. If you wish to turn to slide 25. As usual, I will begin my presentation by talking about the reported P&L. Pascal mentioned earlier on, our product sales grew by 4% in the year. Importantly, we continue to do what we said we would do. Growth of 8% in the fourth quarter was particularly encouraging after a strong third quarter at plus 9%. As you know Lynparza was recently approved as a first-line maintenance treatment for ovarian cancer triggering a $70 million milestone payment from Merck in the fourth quarter. We did not originally anticipate receiving this externalization revenue until 2019. Overall externalization revenue reduced by 55% in the year as our deal income fell much more into other operating income. Total revenue reduced by 2% in the year impacted not only by the fall in external revenues, but also by a set of Crestor generics in Europe and Japan. And finally, within the reported P&L you may have seen the details in our announcement in the fall in restructuring costs. Please turn to slide 26. Moving now to the core P&L. Our gross margin ratio reduced in the year as expected by two percentage point to 79.5% driven by the comparative effect of favorable manufacturing variances in 2017 as well as the impact of the Lynparza profit share with Merck. Operating expenses increased by 4%. The reduction in core R&D expenses reflected our focus on cost discipline and efficiencies, where the increased investment in core SG&A was the result of support for our new medicine and our business in China. This support is delivering clear returns. As I mentioned, a moment ago other…

Thank you Marc. And I'd just like to say how much I appreciate the opportunity to talk to all of you today. Some of you I know and some of you I'll get to know over the coming weeks and months. I'm happy to be able to provide an overview of our progress during the course of the year. I'll provide an update on anticipated news flow for 2019 and 2020. And finally the best bit I'll be able to talk to you about a few of our early molecules that are transitioning through early mid-stage development and hopefully to Phase III. Could we turn to the next slide please? First of all I just like to take a moment to thank Sean Bohen and Bahija Jallal. The pipeline is where it is today because of tremendous efforts across all three of our sciences units and we very much thank them for their efforts and wish them the very best fortunes and luck in their future endeavors. As you know as part of the reorganization that Pascal just talked about we also welcomed José Baselga. José is a world-renowned oncologist and will lead the -- EVP the R&D, Oncology unit. And it's not an exaggeration to say that in, José we've recruited one of the very best oncologists in the world. We know him very well. He's worked with us for many years. We're extremely excited to have him join us in the company. José will work as my counterpart as I assume the role of EVP of R&D BioPharma and we'll both be responsible for taking programs from research, through, development and excited to deliver new medicines to the pipeline. Please turn to next slide. Throughout 2018 our level of pipeline news flow has been significant contributing to our…

Thank you, Mene. So please turn to slide 41. I won't go over this slide again, because I just want to have a little bit of time for Q&A. But let me just say again, we are so excited to be back to growth and quarter four reflected really the trend we are now on. and our new products in particular are growing very, very rapidly. The other key message is that for 2019, we definitely forecast topline growth, but also importantly, leverage and operating profit growth. So, with this I will stop here and open the Q&A.

[Operator Instructions] And we now will take the first question from Emmanuel at Barclays. Emmanuel Papadakis. Go ahead Emmanuel. Can you hear me? So, maybe we'll wait a little bit until this technology wants to work for us. And sorry should we start with Sachin? And go ahead Sachin.

Sachin Jain from Bank of America. Just a question on roxa. Could you provide any updates on timing of that Phase 2 safety analysis update perspectives on chances for superiority versus non-inferiority? And then talk about commercial potential in a non-inferior scenario with particular focus I guess on China where you're already approved? Thank you.

Okay. So the first part maybe Mene if you want to comment on this. And in case Elisabeth you have anything you want to add please feel free to jump in. And the second part of the question the -- I guess I would call it all EPO-type of a product profile in China. Actually Ruud if you want to address?

So, first of all, we're excited the efficacy data was positive. And we're waiting now for the pool analysis for more of the late-stage trials which is obviously a complex and rather difficult thing to do. Right now we're projecting it to be towards the end of the first half of the year. In terms of our confidence, it's difficult to speculate until you get the data. You don't know. But I think we're very confident in the mechanism, the efficacy data look great and there's every reason to believe that it should be better than EPO.

Okay. And regarding the opportunity if it is non-inferior. I think it's still very substantial. Let's not forget that this is an oral medication instead of an injectable. And clearly there is an incredible high unmet medical need in China a lot of people are suffering from anemia in CKD. And it's easy to use. So, even in that specific scenario we still believe it's a very substantial opportunity for patients and for us as a company.

Remember that as you know very well Sachin there are two really segments. I mean the dialysis segment and the pre-dialysis segment. In the dialysis segment if we're not superior, of course, it's a bit support repo, I mean; it's a bit more competitive and difficult. But in the pre-dialysis segment it's still wide open because using an injectable EPO today is high but the unmet need exists. So, there's an enormous opportunity still there. Should we -- Elisabeth you wanted to add something to the--? Elisabeth Björk : Yes. Can I just clarify so we are absolutely clear on the timelines? What we have said is that we aim to submit towards of the end of the first half. And we will obviously get sort of the pooled safety data somewhat before that.

Thanks.

Thank you. It's Andrew Baum at Citi. Can we talk about MedImmune and the balance between the potential productivity improvements that the integration within Astra brings versus the risk to talent retention that dislocation may bring, particularly in relation to your ongoing commitment to immuno-oncology discovery another emigre aside from Dr. Baselga from academia Jean-Charles Soria joined a little while ago? Perhaps also you could talk about his role within the new structure. Thank you.

Yeah. It's a great question, Andrew. In fact, what I might do is actually ask Susan to comment because she's done very well, she's been with us for a number of years now and she's not from MedImmune as we all know but she's very connected to MedImmune and in particular to Jean-Charles in Gaithersburg. The one comment, I would quickly make is that we believe our MedImmune team has done a fantastic job and there's no reason for them to stop doing this really. And there is a level of excitement to especially in the oncology team to come together as one oncology team across the board. And outside of oncology and biopharma working together on a global basis is also bringing additional value and excitement. So you're balancing this against of course people losing the sense of entity in Gaithersburg. But we value the talent that is there and we're doing everything we can to certainly retain everybody. But if Susan, if you want to comment in terms of how you, Jean-Charles work together, together with José also in terms of how we actually are integrating the two teams.

Sure. So, first of all, from my perspective I think we have a dream team in the oncology and leadership at AstraZeneca. It's great to welcome José as part of that. We've worked together for a long time. But also Jean-Charles has been an integral part of that, we've got a very rich pipeline across both the biologics and the small molecule part of the pipeline. There is some parts of this reorganization that will give us the opportunity to be much more effective. So as Mene already highlighted, we've got both the CD73 antibody and the adenosine 2a receptor inhibitor for example both addressing the adenosine PATHWAY. It makes complete sense for that to be very closely integrated. And of course, we are already doing combinations with those drugs today. But through this reorganization I think we can be very closely aligned. And I think the other thing that it brings is the ability to integrate across early stage and late stage with colleagues including Hashim and Klaus Edvardsen in light for – it's all in one leadership team. So it's highly focused. It's highly aligned. I think it's the right time to do it with the growth that we've got now in oncology. And I think we're both, both Sean and I are very excited about the opportunities that we've got more working closely together. It's great.

Thanks, Susan. I think Mene, if I read your – but I think it's right you wanted to also make a comment?

Yeah, just to highlight I think again having now built three really strong sciences bringing together to actually bring the best of the small molecules, the large molecules and everything in between and have a prioritized pipe that it can move quickly from research story to late that's aligned with our commercial colleagues. I think it's going to really simplify our organization enable us to be much more nimble and agile. And I think we'll take the very best from Medi the very best from the iMed and the very best from GMD and really create an organization that's even stronger.

The last comment, I will make is very important, a question always asking is that our sales for oncology also is based in Gaithersburg and very close to the team there. And maybe José it would be good if you could give us a make a couple of comments on your vision for oncology and how you intend to bring the entire team together. José Baselga: Yeah. So, thank you very much. So I think actually bring together oncology will be incredibly beneficial. This separation between large molecules and small molecules doesn't make any sense. So I think that we can integrate the – all the early Phase I groups and the late-development groups into a single organization. We believe far more able to streamline. Between Charles and myself, we come from academia. But as you know academia is a very broad ecosystem and you have multiple species within the academic world. And both of us have been drug developers for many, many years. I remember the work days have been delivered for 25 years. So this is what I do. That is my focus, my energy. And what we need to do now is exactly what Mene was saying is to try to make sure that we prioritize the tremendous pipeline that we have and that we are agile at reading the signals and moving on quickly with these combinations in the field of immuno-oncology that we have the sense that we'll have the higher, the highest returns. So that's going to be the process how to basically prioritize this pipeline and how to move quickly. The other thing that is important is that we have seen a blurring in the classical development stages in oncology. So, it used to be that the limits were very clear. You had Phase I, you had Phase II, Phase III. This today is frankly something that is beginning to erode and to blur. So to be all together within one group, make things much more efficient and faster.

Richard Parkes from Deutsche Bank. I just got a question on operating margin. You obviously guided to operating margin improvement this year and then expectation that will continue to improve going forward. But I just wondered if you could talk about i.e. where you think margins could go to longer term? I know in the past you've talked about headwinds from the business mix with emerging markets and primary care still contributing. But you've also likely to have one of the most profitable franchises in the industry with Tagrisso and Imfinzi in lung cancer. So when I look at peers, it looks like why couldn't you achieve a mid-30% margin versus your 30% plus target? So wondered if you could talk about how, where you think margins could go and to what extent productivity gains from R&D or manufacturing might contribute to that versus just top line leverage? Thanks.

Thanks, Richard. Maybe I'll make a couple of comments and Marc if you want to jump in also. First of all, I would just like to make sure I didn't give anybody the wrong impression in the past. When you talk about headwinds coming from the emerging markets as far as operating profit, I certainly never intended to say emerging markets are not profitable. I mean, our profitability in China and the emerging market as a whole is actually pretty good. It's very similar to what we experienced in Europe. What I meant is that we had to invest a lot in China, and we did invest because we wanted to grow. We have critical mass now in China and we are really on a very strong momentum. But, so it was more of the investment not, I didn't have the intent to reflect low profitability. Moving forward, I think the, certainly you're right. I mean, gaining critical mass in a number of countries including China on the one hand, on the other hand having a profitable franchise like Tagrisso and other products actually would certainly help us drive our operating profit up. So our goal is to exceed 30%. Now beyond this I don't think we want to give a guidance on operating margin level over the next few years. But certainly we will continue managing productivity and working to improve our operating profit. Having said that, we will, we are an innovation business. We have to continue investing in developing our products and coming up with new products. You saw Mene's presentation. We have many early projects. We have to move them into development. So we're managing this tension that always exist in the P&L between maximizing short-term profitability, but also maintaining a sustainable business. So beyond that I won't give a specific number. But certainly we will work towards improving operating margins. Marc anything…

Yeah. Just -- thank you for the question. The two points of reference. The first one, we have said that we would reach an operating margin above 30% post-2020. So I can confirm this is our objective post, obviously, 2019 and 2020. And then we have reiterated many times that our margin will probably be a composite between the best specialty care company and the most -- more diversified primary care company as our intention is to operate on these two fronts on a global scale. So, therefore, that is going to be somewhere in between, the best of the primary care companies and the best of the specialty care companies. I can't give you more definite figures and at what pace we will reach that level, but we are definitely working year after year towards this objective.

I suppose Richard, I mean the message in there is that the fact that we are collectively committed to continuing to build a sustainable business and investing for the long-term reflects the fact that many of us are still here for quite some time. So we're definitely committed to building a sustainable company. And that constantly means managing short-term versus long-term. But your point is certainly well taken.

Peter Welford for the Jefferies. Can I just focus in on the gross margin perhaps part of that question related being -- can you just talk a little bit about, I guess how you've managed to close the two facilities given the bulging Biologics pipeline that you have? And yet, obviously, you found the room to be able to optimize your Biologics manufacturing over the last few months? And how far we are along your manufacturing efficiencies if you like? Should we still anticipate, is there still a lot to come on the manufacturing side? And so how should we think about gross margin this year and then beyond that? Thank you.

So let me first respond on the level of gross margin. If you look at the evolution of our gross margin over 2018, it has been broadly in line with the last two quarters of 2017 between 79% and 80%. And this is going to continue over in 2019. We had indicated more than a year ago that the second half of 2017 would serve as a good reference for the gross margin. Referring to the closure of the two manufacturing facilities on biologicals, we are taking this measure because we want to sustain operating leverage and we want to work on every possible line of our P&Ls. So we have taken this measure to reduce our capacity in biologicals.

It's probably a good opportunity to say thank you and congratulations to our operations team. We always look at our R&D efforts in our commercial success but our operations team is doing a fantastic job and we've been able to improve the yield to manufacture our Biologics to the extent that -- and also improve the productivity of our Frederick plant to the extent that essentially, we can produce the volume we need with more limited manufacturing capacity that enabled us to reduce the footprint. So a lot of people in operations are doing a great job working on productivity.

Thank you. It's Luisa Hector from Exane. Sort of thinking now about the R&D investment, Mene it was good to see your slide on the maturing mid-stage pipeline. You highlighted two Phase III starts. I wondered if any of the other assets on that slide would be eligible for a Phase III or pivotal trial entry decisions during 2019. Thank you. A – Mene Pangalos: They could be. I think it's all obviously all dependent on data. I think particularly in the oncology space. Some of those oncology molecules if they had particularly striking data, response rates, durability relative to standard of care, I think some of those could potentially move towards the end of the year. But I think really all based on data. And I wouldn't want to like to pick any single asset because there's quite a few of those that are in that space. A – Pascal Soriot: Sorry. One here and then... Q – Sam Fazeli: Hi, Sam Fazeli from Bloomberg Intelligence. Just one question about Imfinzi, but two parts. One is, obviously the four weekly dosing file has been retracted. Can you just comment on how you intend to develop a more amenable perhaps dosing regime for a maintenance setting or an ADJUVANT setting for this asset? And in that related area, you've got a few new starts for ADJUVANT trials some of which will be a long way behind competitors for instance in mostly invasive bladder cancer. What's the thinking there? A – Pascal Soriot: Thank you. I mean the one question part A and part B this is a trick that Sachin has been using for some time, but it always works. Hey Sean do you mind covering this maybe? A – Sean Bohen: I can Pascal. So maybe I can start…

So we try to go back to the questions on the telephone. Emmanuel Papadakis of Barclays do you want to try again?

It's Emmanuel Papadakis from Barlcays. Maybe I could take one for cash, from a cash perspective for Marc? You'd originally expected 2018 free cash flow to be relatively flat in 2017. Obviously came in some way below. The 1.5 well 1.6 is a little hard to reconcile with the core EBITDA of over 5.5 even allowing for $3 billion coming from externalization ROI, which obviously goes through a different part of the cash flow statement. Maybe you could just walk us through expectations in 2019 CapEx restructuring. The working capital outflow, we had obviously part of that was legal in 2018. Is that going to reverse in 2019? Should we expect a marked step-up in cash from operations and free cash flow in 2019? And why would you not get to a level that would cover the dividend? Thank you very much.

So there were quite a few question in this -- in your statement. So first of all let's take the issue of the dividend coverage. I mentioned today in my speech that we would continue to plan covering the dividend from 2020. We are not going to be able to do that in 2019. If we compare the cash flow of 2018 versus that of 2017, I mean it's -- they are obviously learned by now there are differences. But if you look at the cash flow of 2018, if you take cash flow from operations and if you add the cash derived from disposal of intangible, it is roughly flat. So we have on that level a very similar level. And then if you look at the -- another indicator of the cash flow, if you look at the level of debt you can see that the level of debt at the end of 2017 is broadly in line with the level of debt at the end of 2018. So, basically this is what we have done. We have [indiscernible] international assets. We are just really covering the dividend in 2018 where I think $300 million uncovered. So, in 2018 I believe this was a very good success in terms of cash flow generation. We did very good work on the working capital. Inventories were flat. Basically the receivable increase was compensated by an increase of payable. Then we had a few movements on payment of legal settlement as well as release of provision of the magnitude of about $600 million. Overall, I think the cash flow is doing well. As an indication for 2019, we will have other payments for business development deals that have already been signed with various parties that are going to take some cash out for the year 2019. But again, in 2020, we expect to have a dividend coverage.

Thanks, Marc. And maybe another one on the phone. Tim Anderson at Wolfe Research. Tim, do you want to go?

Tagrisso, a couple of questions there. First one is on the ADAURA trial in the adjuvant setting and your level of confidence. Is that kind of a long shot trial? Or do you view that with fairly high confidence? Because the prior data set's looking at EGFR, anti-EGFR therapies in adjuvant. Those data sets have been mixed. So I'm trying to gauge the likelihood of success with ADAURA. And then the second question goes back to China, so a big driver of growth. Some of that's now coming from the NRDL listing in second-line. Now that you're getting closer to a first-line approval in China, how confident you are that you will get NRDL listing for first-line as well? Well, I guess, one of the concerns I have potentially is that China might try to keep that product relegated to second-line therapy under the idea that you want to sequence or you can sequence therapies with older drugs first to try to extend survival and that's a cheaper way to do it. Thank you.

Thanks. Two great questions, Tim. ADAURA, I would say, I mean, that study is going very well. We finished enrollment. And we have also data from China using Iressa and Tagrisso. We have good hope but Dave do you want to cover on that….

Yeah. Why don't I cover the second question and Susan can cover the first if that works. So, on the second question Tim, on China. So first, yes, so we got the NRDL listing for second-line in November. I think it's worth noting, we saw a threefold increase in the number of patients that started therapy. So you really do see that when access is made available to the patient population that it results in an uptick in those medicines getting to patients. In terms of our level of confidence in the negotiations on first-line, I mean, we have to start first with we've got to get the approval. So we're certainly happy to see that we've got that on a fast-track and have confidence that that will go well. I think that the second piece will then in NRDL. NRDL is something where there's been some dynamism to the process in China. So we welcome the opportunity to negotiate if it comes up. We'll see where we get to. As far as sequencing, I think sequencing is an argument that with payers and with physicians alike is one of the things that we've had to address. And I think that within China, we'll address it no differently than we do with physicians, who raise the sequencing argument, which is that the best medicine should be used first. And it's the only opportunity to ensure that every EGFR patient has the opportunity to benefit from Tagrisso as opposed to waiting until second-line when you lose half of the patients because you can only treat those who developed a T790M mutation. So that's really the approach that we'll take over the course of the discussions with them.

It's fair to say that we should probably not be too optimistic to get first-line NRDL listing very quickly, because that is going to be an expensive exercise of course for China. And they're trying to open another market -- open access to drugs and reimburse them as hard as fast as they can. But of course they also have to manage budget. I think what you got to look at today is the fact that we have one year as a tender and we're not even on the NRDL listing we are on the EDL listing for List A. So every single patient who is a first-line patient in China can get List A. And on the back of this we have a sales force that can promote Tagrisso very aggressively for second-line. And as Dave said I mean of course medicine is that, is such that -- medicine Tagrisso should be used first-line. But we're going to have to negotiate the first-line access NRDL listing is very, very broad access of course. Susan do you want to cover the ADORA?

Yes sure. So just in terms of the ADORA ADJUVANT trial, again the prior trials of EGFR inhibitors in the ADJUVANT setting have not all focused solely on patients who have got EGFR mutations. When you take the data sets that are focused on patients with EGFR mutations, I do believe that there is strong evidence that there's a potential for improvement. And of course in Tagrisso, I feel we've got a best-in-class EGFR inhibitor that has a number of attributes that are better than the prior therapies that have been tested in that setting. In particular of course the potential to prevent the emergence of brain metastases which is often a source of progression as well as later development of other and emergent resistance mechanisms. In addition the tolerability profile that you have prevents discontinuations and holidays from the drug due to adverse events. And so you can maintain it. And again the duration of therapy on the ADORA trial is three years. You also have to remember that there's a significant proportion of patients in the ADJUVANT setting who still die from lung cancer with EGFR mutant lung cancer. So there's a significant opportunity to improve on that. So we're confident that we've got a good potential for the probability of success, but that's why we're doing the clinical trial in order to test that hypothesis.

Okay. So Thomas a quick check with you. How many questions? Another two or three, okay. Back to the room.

Yes just two questions if I may. One on respiratory, and Symbicort obviously we've seen market pressure is down 22% in the U.S. and 4% in Europe this year. I'm just curious post the generic Advair introduction what decline you're assuming for 2019 within your Respiratory franchise forecast? And secondarily with respect to Pulmicort, a $1 billion franchise now in emerging markets growing mid-teens are there any IP considerations we should have in mind? Or do you see that growth as being largely sustainable for next few years? And then a second question just to come back to the margin aspirations. But your 30% plus margin aspiration, what dollar contribution does that assume from externalization and other operating income beyond 2020?

Okay. So the first question maybe Ruud you could take. And Marc you can take the second one.

Absolutely. So first of all we need to realize that as they're generic, it's a different product. The molecules are different and it's AB-rated. And it's also in a different device. So that's a starting point. Secondly, we can expect ongoing pricing pressure both in the U.S. and the EU. It's very difficult very difficult to forecast the potential price impact of generic Advair. It depends whether it's in commercial Part D. Clearly I think that's JSK and they have guided to that and also the impact we will be a bit under pressure as we have been in the past. But how much it is it simply needs to sort out in the marketplace and it's very difficult to give any guidance on that piece.

Marc?

Yes. So just to take the importance of externalization in our future projection relative to operating margin, I think we need to understand that the proportion of externalization in our total revenues is decreasing over time. It has decreased by 20 -- I mean, the total of externalization revenue in other income decreased by 26% in 2018. This trend is going to continue. And then, if you project forward the externalization in the total revenue would become very, very small a few percent. So I don't think this has a significant impact on the level of operating margin if you project [five] years from now.

Good.

With respect to Pulmicort, Pascal

Yes, certainly.

So with respect to Pulmicort, it's growing extremely fast. But as I said during my presentation, I think we have a unique -- we are a market leader in the Respiratory business in China. It's a nebulized form of Pulmicort, as probably you know. So at this stage we believe it is very difficult to manufacture this volume, this massive amount of volume of PULMICORT RESPULES. But of course we will always be vigilant. But we have a quite a unique position with PULMICORT RESPULES in China.

The other thing we could say about Pulmicort in China is that, it's really out of pocket mostly. So patients pay out-of-pocket and the cost is relatively low. So you're not sort of exposed to hospital or budget management. That's one aspect. And the cost at the end of the day for an acute treatment is very limited, because we have not priced it very high. And the other aspect is, we've really integrated the delivery including digital, as a digital part of this delivery of the drug. So we have nebulizing rooms. We now have -- I can't even remember, it goes so fast, it must be 18,000 or 20,000 nebulizing rooms across China that we've installed in hospitals with automatic refilling, et cetera, et cetera that surround -- I mean, things like a little movie for kids to watch when -- during the nebulization. So we are providing a total package not only a drug. So to a great extent it's protected. But of course competition will be there. Since we're on China, maybe the other comment I wanted to make about Tagrisso is, in the second line you've got to think about the size of this opportunity of this market in China. There's about 130,000 patients in China in second line who would be testing for T790M mutation. About probably 25% will be tested is ours -- will be our estimate, it's still a huge population of patients, a big opportunity for Tagrisso, but also as a result a big cost for the NRDL budget. That's why we think it's really prudent to assume that we'll get to first-line reimbursement over a period of time.

Mary [Atami]at Prime Avenue. Sorry? Oh was that for me?

No.

Ladies first, it's Valentine's Day so.

Go ahead.

Thank you very much. Mary [Atami] Prime Avenue [ph]. Just a quick boring tax question for Marc. Can we assume that from 2010 onwards the tax, the core tax rate will revert to the 16% to 20% range? And that the upward pressure on 2019 is purely due to the Synagis tax base? Because that was really my original understanding, but I was starting to feel a little bit insecure after reading your press release this morning, which seemed to imply that there is a structural element in terms of the geographic mix that's pushing up the 2019 tax rate. So if you could clarify that, please. Thank you.

Thank you very much for the question on tax. So it's right to say that Synagis is one of the factor that creates a higher range of tax rates for 2019. But there are other things than Synagis. And then, concerning the longer term I think the rate -- the rate that we have provided for 2018 which was 16% to 20% and the rate we are providing for 2019 of 18% to 22% I think if you combine those two rates, you should be able to project a reasonable rate for the future.

Thank you, Pascal. Just going back to the operational reorganization, the integration of MedImmune. Could you help us understand the implications for externalization just sticking onto that topic, whether it be for marketed products or whether it be for pipeline assets? Obviously, you've got a number of exciting sets of data coming through in infectious diseases, but that doesn't appear to be a core part of your strategy. And then just lastly I -- we haven't seen dividend and the word growth next to dividend on a slide for many, many years. So just some thoughts around sort of debt leverage and why we won't see a return to growth on dividends, so a question for Marc Dunoyer. Thank you.

Marc, you want to address this second one?

Yes. So as I presented earlier on, we -- our first priority was returning to growth, growth of sales. Our next priority is to work on the operating leverage and therefore growth of profit. Then we'll be working on cash generation. And then in turn, this will lead to deleveraging and a potential increase of dividend. So this is going to be done in that sequence.

Mene, the MedImmune question?

So first of all you know that we have part on the RSP program with Sanofi, so I think in the infection space I wouldn't say it's necessarily non-core. Some of the programs we have in the infection space in MedI with anti-bodies that target pathogens that could be important in diabetic for example or exacerbations in COPD as they marry up actually quite nicely with our core therapy areas. Others that are less easy to marry up, we will look again at how to move those forwards. And if we can find the right partner we'll obviously do that.

So this sort of the reorganization doesn't change anything to what -- the way we're going to manage our pipeline. These projects actually fit our core therapy areas and we'll develop and market them ourselves. If not we will partner them find a way to bring them to patients one way or another. So Thomas reminds me that I have to stop here. I would love to address the remaining questions that are coming up. But thank you so much for all your interest. And as a -- maybe a closing comment, remember we're all very excited to be back to growth and the next few years will be very different for this company. Thank you so much.