AstraZeneca Chief Financial Officer Aradhana Sarin says the drug company uses AI in almost every aspect of the work they do. She talks beating on earnings, their drug pipeline and how the company approaches dealmaking. She speaks on "Bloomberg Surveillance."
In the meantime, there is a real question about how much AI is going to uh really give us upside benefits and we'd keep joking, not joking, it'll cure cancer. Let's turn to Pharma. This is actually one of the key areas so many people are looking at AstraZeneca beating third quarter earnings expectations propelled by surging sales for its major cancer drugs. The company also announcing a $2 billion restructuring plan aimed at funding investment into its drug pipeline. AstraZeneca CFO Aradhana Sarin joins us now.
Thank you so much for being with us. I wanted to just start with that question. I mean, you clearly had really positive earnings. How much is your pipeline being supported by the use of AI and how quickly it can expedite some of these trials?
Yeah, so we're using AI in practically every element of work that we're doing. Um, and it's not just pipeline. It is everything from, you know, drug discovery and drug development that obviously many people talk about, but it's also how we make regulatory filings all across the globe. It's in operations, it's how we improve our process development, uh which is sort of the early phase of manufacturing as well as the later phase of manufacturing. So it's literally across the company and there are a number of uh use cases as well as a number of uh actual um, you know, real benefit that we're seeing. Um, it's still early days. Uh, I think the full benefit will will take a long time. But uh, we're making obviously good investments across AI.
I am wondering how much scale is important. The idea that during this time of huge technological change and adoption, the bigger you are, the better you are. How much are you exploring the idea of not just growing organically, but uh really engaging in acquisitions to try to get that scale at this pivotal moment.
So, for us acquisitions are are really less about scale. Uh, we have done a number of what we call business development transactions as well as M&A transactions. This year we've spent about, you know, four plus billion on on a variety of different transactions. Um, and it's really about uh accessing new technologies. And when you see across the industry, so it's not just us, but but multiple pharma uh companies, uh innovation comes not just from our own labs, but also um a number of of smaller companies in in the biotech ecosystem as well as universities, etc. So, we're always looking at both our internal innovation as well as external innovation and how we best access that innovation. And that is through, you know, partnerships, it could be through equity investments, uh as well as through M&A.
So in other words, uh uh there there is this idea that smaller acquisitions probably are the way to go more than sort of the mega deals that some people have speculated about.
Um, I think yes, absolutely. I mean that's where we've seen the most success. Uh when we look at transactions, we always think about how can we add value. Uh some of the things that we can do, um, you know, which a smaller company can't do, for example, run global clinical trials across the, you know, across multiple markets. Um, it's being able to launch these products across the globe. So, we're always looking at how can we add value and and those are the things that we look to do.
You've done a lot in terms of expanding in the United States, but you also have this um deal with the Trump administration about when it comes to bringing down certain pharmaceutical drugs. How much is that potentially impacting your margins right now?
Um, so this is uh you know, over a a multi-year period. Um, it does impact how we think of new drug launches, for example. So, the MFN uh, you know, deal was about uh reducing prices for new innovative drugs for American patients and at the same time making sure that um some of the richer countries in the world also pay their fair share of innovation. Um, you may may or may not know, but you know, it takes billions of dollars to actually get a drug from the bench uh to the market. And so, um it's really achieving this rebalancing of of pricing and you know, as we think of new product launches and what's the right price point to launch that at and, you know, which markets we launch at, that's where we'll start to see uh some of the impact of um of this agreement.
So do you think it's slowing it down? How quickly you can get some of these important drugs to market?
Uh, no, I don't think it's slowing down how we get the drugs to market. Um, in in some markets, in certain European markets, that process of getting reimbursement is is actually slower. So you can get the drug to market and you can get it approved, but you may not be able to get the drug reimbursed and because of these these pricing dynamics and that what, that's probably what's going to, you know, take some more time.
We also have the United States proposing to restrict American investments in Chinese biotech companies. Are you talking to the administration about this?
You know, we're always engaging with the administration. Uh, this is uh something that has been proposed. Uh, hasn't hasn't gone into law. Um, but you know, there is a lot of innovation in China that is happening in the biotech space. We have done uh a number of partnerships and licensing uh arrangements. And, um, to be honest, it actually helps the entire industry and it helps the United States and patients in the United States because ultimately, it's about the best innovation and where we can access that best innovation. It could be in a university, it could be in a biotech company, uh and and that's what we look to do.
Aradhana, a number of your cancer medications have really come to fruition and been positive. I'm just curious uh how quickly the progress is. And we we talk about in jest, joke uh, curing cancer, that we could be really getting to that level. How quickly do you see some sort of true therapies that make groundbreaking strides in curing previously uncurable cancers?
I think we are probably at a time in history where um that is becoming a reality. Uh if you look at some of our own innovations, whether it's uh, you know, Enhertu or uh some of the new drugs that we're launching with Atacama, it is already starting to become a reality in some areas of breast cancer, for example. Um there's been other innovations in pancreatic cancer, etc. Um but it's also about early diagnosis. So, the quicker and earlier you diagnose a patient, the greater the probability is that you can treat those patients with these highly innovative and targeted medicines and the higher the probability is of a cure.
At the same time are all of these medications incredibly expensive to the point of almost being prohibitive for a broad distribution?
Um, I think you have to look at sort of, you know, we when we look to price drug, we look to uh we look at what is the benefit uh in in terms of value that it's providing. And the benefit has to be, if it's another me-too drug or if it's improving survival by, you know, a couple of months, like that is not something that the market's going to accept uh, you know, pricing for. So, um but if you are truly, you know, curing half the patients that you are uh, you know, in in a clinical trial, for example, I think that is real value because you can give patients, uh, you know, a full life um and that could be, you know, for young women in, you know, that are suffering from breast cancer another 20, 30, 40 years.
Aradhana Sarin, thank you so much for being with us, the AstraZeneca Chief financial officer.
