GSK plc

Hello everyone. Welcome to our Q1 2022 conference call and webcast for investors and analysts. The presentation was posted to gsk.com and it was also sent by email to our distribution list earlier today. Please turn to slide two. This is the usual safe harbour statement and we'll be making comments on our performance using constant exchange rates or CR unless otherwise stated. Please turn to slide three. This is today's agenda where we will plan to cover all aspects of our Q1 2022 results. The presentation will last approximately 25 minutes, with a third of 35 minutes for questions. For those on the phone, please join the queue by pressing star one, and we request that you ask a maximum of two questions so that everyone has a chance to participate. Today our speakers are Emma Wormsley, Luke Miles, Deborah Waterhouse, Brian McNamara, and Ian McKay. The Q&A portion of the call will be joined by Hal Barron, Roger Connor, and David Redfern. And with that, I'll now hand the call over to Emma. Please turn to slide four.

thanks nick and hello to everyone joining today's call please turn to slide five i am very pleased to share our q1 2022 results which demonstrate a strong start to this landmark year for gsk with double digit sales growth we're delivering on our financial commitments to a step change in performance In the first quarter, sales increased 32%. Adjusted operating profit increased 39%, and adjusted EPS grew 43% to 32.8 pence per share. Sales growth was driven by excellent commercial execution and strong demand across the whole portfolio. Biopharma sales increased 40%, 15% excluding Zavudi. And across the three biopharma business areas, that meant medicines delivered 97 growth to 3.1 billion pounds with with strong double-digit growth across all areas particularly hiv i was pleased to see zavudi contribute to covid 19 solutions at scale and excluding zavudi specialty medicines also grew 15 vaccine sales increased 36 to 1.7 billion pounds driven primarily by shingrix which delivered its best quarter yet, more than doubling sales as we continue our global launch program across several countries and patient demand returned. General medicines also grew 3%, reflecting strong growth from Trilogy. And consumer healthcare delivered 14% sales growth in the quarter, benefiting from strong growth across all categories, particularly respiratory health. This is, of course, the last full quarter ahead of creating a new independent company, Halion, with a focused strategy to deliver sustainable above-market growth and attractive returns to shareholders. As a new standalone company dedicated to consumer health, Halion is a compelling prospect with an outstanding grant portfolio and fantastic leadership team, led by CEO designate Brian McNamara. We are absolutely on track with the demerger, having very successfully raised the necessary debt and delivered all significant technical system cutovers. Brian will share more on our progress and performance shortly, and I know he is very much looking forward to your questions. Our innovation-driven transformation, we continue to advance with recent regulatory approvals in specialty medicines, particularly HIV, with the US approval of CABINUVA every two months, the label update that makes the oral lead-in period optional, and the update for virologically suppressed adolescents aged 12 years and older living with HIV. In addition, the U.S. FDA also approved Trimec Pediatrics, the first dispersible single-tablet regimen containing dolotegravir as a once-daily treatment for children living with HIV. And in immunology, China approved Benlysta for active lupus nephritis. In the quarter, we continued our investment in R&D with the proposed acquisition of Sierra Oncology for $1.9 billion. We've consistently said we're pursuing targeted business development to augment and complement our organic pipeline. Great opportunities with strategic fit, and this acquisition aligns with our strategy of building a strong portfolio of new and specialty medicines alongside our vaccines portfolio. The deal is expected to contribute to 23 sales with adjusted EPS accretion in 2024. And in a moment, Luke will highlight why we believe momolotinib has the potential to address a critical unmet medical need in myelofibrosis patients with anemia and complement our heme-onc business. Overall, we see these results as a very encouraging start to the year, despite the reality of macroeconomic and geopolitical challenges today. We're very confident in reaffirming our full year 22 guidance, 5% to 7% sales growth, and 12% to 14% adjusted operating profit growth at CER. Turning to slide six. The first quarter was another period of excellent progress across all three of our long-term strategic priorities. In innovation, in addition to the examples I just gave, we also received the US and EU regulatory submission acceptances for DAPRODUSTAT, a potential best-in-class medicine for treating anemia of chronic kidney disease, and the US FDA has set a PDUFA date of the 1st of February 2023. In performance, our executional Edge needs to strengthen, as you'll hear from the team shortly. Although flattered by the comparison to Q1 2021, underlying demand is clearly strong. And lastly, on trust, we continue to progress our ESG leadership, executing our ambitious commitments to differentiate GSK on ESG delivery. Turning to slide seven. As our innovation-driven transformation gains momentum, 2022 is an important year for several significant late stage milestones. In Q2, we expect the results for RSV older adults with an anticipated regulatory submission before the year end, potentially putting us on a path for inclusion in the June 23 ACIF meeting. This disease represents a significant unmet medical need, with RSV infections accounting for around 180,000 hospitalizations each year and about 14,000 deaths in the over 65 population in the U.S. alone. In the second half, we have several late-stage readouts, including the Pivotal DREAM-3 trial readout for Blenrep in patients with third-line multiple myeloma and the Phase IIb data for beta-reversin for patients with chronic hep B infection. There is a significant unmet medical need for these patients with over 300 million people living with Hep B, and the disease is responsible for over 900,000 deaths each year. This is an exciting year for our high-quality pipeline, and I'm encouraged by the progress this quarter. And with that, I'll now hand it over to the team. Luke, first over to you.

Thanks, Emma. Please turn to slide nine. So in the quarter, our commercial pharma business continued to deliver strong performance. In specialty meds, including HIV, which Deborah will speak about momentarily, we increased sales by 15%, excluding Zaluti. We continued to see double-digit growth from our market-leading lupus medicine, Ben Lister, up 18%, and we were pleased to see the expansion into lupus nephritis in China and Japan, driving new patient studies. In oncology, cells increased 15% despite a headwind in the ovarian cancer area, where unfortunately, diagnosis rates are still depressed, down about 29% compared to pre-COVID levels. We're also pleased to contribute pandemic solutions with around 1.3 billion pounds of Zevuti cells in the first quarter. And as COVID is an ever-evolving landscape, we're having ongoing discussions with regulators and working at pace with VIA to add to the data set. On the right-hand of the slide, you can see that we've spotlighted the fantastic performance with Nucala, up 16% in the quarter. Nucala remains the leading IL-5 in key markets like the US, Japan, and the EU5, and it's the only biologically approved for four indications across isenophilic diseases. The new indications in deeper penetration and severe isenophilic ASPA represent further growth opportunities, and these are complemented by our long-term bicycle innovation plans with phase three trials for Ducala and COPD, and of course, our long-acting IL-5 Depomocumab, both expected to read out in 2024. And finally, our general meds portfolio was up 3% this quarter, with classic and established product declines more than offset by strong trilogy growth up 35% in the quarter. We continue to lead the triple market in the US and Japan with new, increasing new-to-brand prescriptions and overall market share gains. Now, if you could just turn to slide 10, please. Moving to vaccines, we had a very strong recovery for Shingrix, which helped drive sales growth of 36%. Shingrix sales more than doubled, delivering a record quarter of nearly 700 million pounds of turnover, and the strong performance is reflected in the benefit of a favourable comparator, good demand, and channel inventory build, including a large retail purchase that we do not expect to repeat in Q2. In the US, encouragingly, pharmacists are beginning to prioritise Shingrix as the second preferred vaccine, with around 50% now indicating they're looking to increase shingles vaccinations. In Europe, strong growth benefited from high demand in Germany and contributions from new launches as our geographic expansion is making Shingrix more widely available. Shingrix is now available in 19 countries globally, and our unconstrained supply position puts us on track to expand to 35 countries by 2024. making Shingrix available in nearly 90% of the global vaccine market. As shown on this slide, we see increased contributions from our geographic expansion efforts. And this year, we're on track for a record year for Shingrix with double-digit sales growth, and we expect contributions to build from new launch markets as we move through the year versus the stronger comparative quarters in the second half. Shingrix will be a key driver of this year's expected low team sales growth in vaccines, excluding pandemic solutions. And Shingrix is well positioned to deliver the ambitions we laid out last year for our 2026 commitments to growth. Please turn to slide 11. Earlier, you heard Emma highlight the strategic rationale for our proposed acquisition of Sierra Oncology. I want to now focus on the benefit of Momolotnib as a potential new medicine to address a critical unmet need in myelofibrosis patients with anemia. Anemia is a significant issue in myelofibrosis caused by two drivers. First, the natural progression of the disease where the bone marrow is progressively failing, causing cytopenia, of which anemia is the most frequent. And second, the standard of care treatments for myelofibrosis is dominated by myelosuppressive JAK inhibitors. Many patients sooner or later will become transfusion dependent. And on the left side, slide 11, you can see that transfusion is an independent prognostic factor with transfusion dependent patients having significantly worse survivals. This is a significant challenge with the right side showing how significant a challenge it is. Up to 30% of patients who still not receive a JAK inhibitor already require a transfusion. That number goes up to 70% of patients who've already been treated with JAK inhibitors. With Momolocnib, we're excited to have an opportunity to bring a potential new medicine to GSK, which is differentiated in a segment of patients with a higher medical need. With that, I'll now hand it over to Deborah on slide 12.