GSK plc

Good afternoon, ladies and gentlemen, and welcome to the Analyst Call on the GSK Fourth Quarter 2020 results. I will now hand you over to Ian McKay, Chief Financial Officer, who will introduce today's session.

Good morning and good afternoon. Thank you for joining us for our full year 2020 results, which were issued earlier today. Normally, Sarah Elton Fodd, our Director of IR, would lead this call, but unfortunately, Sarah has been out of jail for a couple of weeks, and this is literally her first day back, so she's in listening mode only today. You should have received our press release and can view presentation on the GSK website. For those not able to view the webcast slides that accompany today's call are located on the Investor section of the GSK website. Before we begin, please refer to slide two of our presentation for our cautionary statements. Our speakers today are Emma Walmsley, myself, Ian McKay, Luke Miles, David Redfern, Ryan McNamara, Dr. Hal Barron, with Roger Conner, joining us for the Q&A portion of the call. We request that you ask a maximum of two questions that everyone has a chance to participate. Our presentation will last for approximately 45 minutes, slightly longer than usual, to allow time for Hal's extended fourth quarter R&D update. And with that, I'll hand the call over to Emma.

Thanks, Ian. So 2020 was an extraordinary year for all of us, another year of strong progress for GSK, and we're very confident in building on it 2021 for successful separation into two new companies with strong performance trajectories in 22 and beyond. 2020 was always planned to be a year of investment in our pipeline and new launches and in preparing to be two companies, but we also had to respond rapidly to mobilize through the pandemic. And I'm extremely proud of the agility and resilience our teams have shown in the face this challenge. We remain firmly on track with all our strategic goals. We delivered strong performance in our growth drivers and disciplined cost control to offset the unexpected impact in vaccines and so delivered our guidance for the year, which was set before the pandemic, with reported sales up 3% CER and earnings down 4 to 115.9 pence. I'm especially pleased by the 9.7 billion pounds, now more than half of our pharma business and up 12%, which reflects the impact of the changes we've been making to compete more effectively and generate greater share of voice across our growth drivers. And you're going to hear more about this from Luke shortly. Consumer JV integration is substantially complete and separation preparation is progressing very well, delivering efficiency in our support functions, simplifying our site network, and further building world class brands. We also achieved an important milestone with the launch of our one development organization in R&D. This is already approving agility, decision making, and scientific collaboration between pharma and vaccines as well as the cost base. We're transforming the pace and delivery on innovation as Hal will talk to. We have nine major approvals in 2020 and it was great to see the FDA recently approve our long acting HIV treatment, Kavanuvra. We now have over 20 assets in late stage development, many of which could be transformational for patients and deliver significant commercial value. These products could all launch before 2026 and we believe more than 10, if successful, have the potential to be blockbusters. And across R&D, we completed over 20 business development deals during the year, strengthening our capabilities with the acquisition of new antibody, mRNA, and genetic platforms and technologies amongst others. We continue to contribute to COVID response on multiple fronts. I am delighted that this morning we announced the deepening of our strategic partnership with CureVax with a new exclusive agreement to research and develop next generation mRNA COVID vaccines, which have the potential to address multiple emerging variants. In addition, 100 million doses of CureVax current COVID vaccine candidate. This is alongside our work with our other partners on adjuvanted vaccines and we're looking forward to more progress here in the coming months and to data coming very soon on our therapeutics, as well as longer term opportunities for further strengthening of our global leadership in infectious diseases. Building trust with all our stakeholders remains of critical importance and in November we set ambitious industry-leading environmental targets to have a net zero impact on climate and net positive impact on nature by 2030. I was also delighted that last week, for the seventh time in a row, when global health has never been higher on the agenda, that GSK topped the access to medicine index for the industry once again. For 2021, we have been clear this would be the second of a two-year transition period with further investment in our pipeline and that we expect a meaningful improvement in operating performance from 2022 onwards. This remains the case, although the short-term disruption from the pandemic to our vaccines business, as COVID immunization is now prioritized, has impacted our guidance for 2021. Assuming that healthcare systems and consumer trends return to more normal conditions later in this year, we'd expect to see the strength of each of our businesses come to the supporting our high confidence that we'll deliver improved growth and margin expansion from 2022. Looking at our priorities ahead of separation, this year will be focused on continued investment in innovation to support sustained long-term growth from 2022 onwards. We expect to deliver further progress in R&D and I'll update you in June on our plans to advance and commercialize our high potential late-stage assets and the significant value creation we now see as we develop a pipeline based on the science of the immune system, the use of genetics and advanced technologies. Our performance focus is on growth driver execution and completing our future ready program to set competitive operations for both companies. In June, alongside our R&D update, we'll set out the positive growth outlook we see for this new biopharma company from 2022 onwards together with our expected capital allocation priorities and a new distribution policy that supports investment in sustainable growth and attractive shareholder return. On trust, we're committed to retaining our leadership in ESG, in global health and to being a modern employer to attract and retain the very best talent. Never has being a purpose and performance driven company mattered more and ESG will also be a part of the biopharma investor update and we'll provide news on progress here alongside that of innovation and performance throughout the year. An investor update for the new consumer company is also expected in the first half of 2022. So I'll now hand over to Ian to take you through the detail of this year's results.