GSK plc

thank you operator hello everyone it's nick as just mentioned welcome to our year-to-date and q3 2022 conference call and webcast for investors and analysts earlier today the presentation was posted to gsk.com and it was also sent by email to our distribution list please turn to slide two this is the usual safe harbor statement and we'll be making comments on our performance using constant exchange rates or cr unless stated otherwise As a reminder, the consumer healthcare business was demerged on the 18th of July to form Halium, and as a result, we are today presenting continuing operations to GSK. Turning to slide three. This is today's agenda, where we plan to cover all aspects of our year-crediting Q3 2022 results. The presentation will last approximately 35 minutes, with around 40 minutes for questions. For those on the phone, please join the queue by pressing star one, and we will request that you ask one question so that everyone has a chance to participate. We can always come back for a second round. Today our speakers are Emma Walmsley, Tony Wood on the phone, Luke Miles, Deborah Waterhouse, and Ian McKay. The Q&A portion of the call will also be joined by David Redfern. Turning to slide four, I'll now hand the call over to Emma.

Thanks, Nick, and hello to everyone joining our Q3 conference call today. Please turn to the next slide. I'm very pleased with today's results, which demonstrate that our strategy is driving the step change in performance and landmark year we committed to. Year to date, we've delivered double digit sales growth of 19%, adjusted operating profit growth of 16%, adjusted EPS growth of 20%, and strong free cash flow of two and a half billion pounds. This broad-based momentum and our continued pipeline progress support my strong confidence heading into 2023 and in our medium-term outlook and growth through the decade. Based on these encouraging results and our excellent momentum, we're again increasing our full-year guidance, which excludes COVID solutions. We now expect sales to increase by between 8% to 10%, with improving outlooks in all three product areas. Adjusted operating profit growth between 15% to 17%, and adjusted EPS growth around 1% below adjusted operating profit. Please turn to slide six. In Q3, we delivered another quarter of growth with sales increasing 9% to 7.8 billion pounds, adjusted operating profit growing 4% to 2.6 billion pounds, an increase of 2% excluding COVID solutions, and adjusted EPS growth of 11% to 46.9 pence. This performance was driven by consistently strong commercial execution all across our business, as we build our broad portfolio of scale medicines and vaccines, with specialty medicines growing 24% to 2.7 billion pounds, and by 11% excluding Zabudi. Here we continue to benefit from demand for our HIV medicines, particularly Dovato and Cabinuba, as well as Nucala in respiratory and Ben Lister in immunology. Vaccine sales grew by 5% to 2.5 billion pounds, and by 9% excluding pandemic vaccines. This strong performance reflected another record quarter for Shingrix, with sales exceeding £750 million. And lastly, general medicine sales grew 1% to £2.6 billion, driven by the strong growth of Trilogy in respiratory. And we continue to invest in commercial growth and our R&D pipeline. In SG&A, we continued our discipline cost control while prioritizing effective investments behind launches, particularly Shingrix, as we accelerated international expansion, and in HIV to drive the growth of our innovation. In R&D, we continued to increase investment in vaccines clinical development, including in mRNA technology and the newly acquired Afinovax MAPS platform, as well as in late-stage specialty meds, particularly the Phase III program for Depimocumab in severe asthma. We also continued our investment behind several earlier stage research projects. Turning to slide seven and our pipeline headline. This quarter, we took significant steps to progress our pipeline and platform capabilities. And of course, we're now delighted to have Tony as chief scientific officer, and you'll hear more from him in a moment. It was great to present to IDWeek the phase three results of our RSV older adults vaccine, which demonstrated more than 90% efficacy against severe disease. And wonderful to have received U.S. priority review as well as regulatory submission of acceptances in Europe and Japan all over the last couple of weeks. Overall, we believe our RSV vaccine has a potential best-in-class profile, and we're very excited about the potential benefits it can bring to older adults. And of course, it's a tremendous commercial opportunity for GSK. During the quarter, we also received several important regulatory approvals in our vaccines business. And as we close out this landmark year, we look forward to further news flow across the portfolio. I do want to reiterate, there are no changes in our capital allocation priorities. As a company, we continue to focus on making significant improvements in R&D productivity and performing competitively in the field, with our pipeline remaining our top priority. We'll continue to focus investment across four therapeutic areas while adding complementary and strategic business development to bring additional optionality. This quarter, we completed the important acquisition of Afinovax and gained access to a Phase II next-generation 24-valent vaccine. We also signed an exclusive license agreement with Spera Therapeutics for tebepenem, a novel oral antibiotic in late-stage development for UTIs. Importantly, we are consistently driving pipeline momentum. This remains our priority, and alongside our strong commercial performance, makes a stronger and better position to achieve our ambitions than we were even a year ago. And now, Tony, first to you on slide eight.

Thank you, Eva. Next slide, please. Our shared purpose within GSK is to unite science, technology, and talent to get ahead of disease together. I want to spend the next few minutes explaining how R&D will support this objective and how I expect the organization to evolve under my leadership. First, it's essential to recognize that GSK has changed. We have developed a unique operating model based on the science of the immune system, human genetics, and advanced technologies. With this, we've delivered a much more competitive performance in new drug approvals. This is encouraging and something our organization can be proud of, but there's more to be done. I'm confident we can further strengthen our pipeline of innovative and practice-changing new vaccines and medicines to deliver long-term competitive growth. To achieve this, we'll rigorously prioritize R&D capital allocation in our four therapeutic areas. To achieve these objectives, I have three key priorities for R&D. My first priority is to execute flawlessly on our pipeline, today consisting of 23 vaccines and 42 medicines. Flawless execution means prosecuting the development of our late-stage pipeline, bringing new vaccines and medicines to patients as quickly as possible, organically and through business development. It also means accelerating our development of our most promising preclinical and early stage research projects. Our guiding question will be, can this meaningfully improve patient outcomes and deliver a new standard of care? My second key priority is exploiting new and existing platform and data technology to identify and accelerate clinical development opportunities. We already have a broad set of platform technologies, including an unrivaled suite within vaccines. We'll continue to add to this, augmenting our capabilities. To illustrate this, we leveraged our world-leading protein adjuvant capabilities to deliver a best-in-class RSD vaccine candidate for older adults. Likewise, through complementary strategic development, we acquired Afinovax, and the disruptive maps technology mentioned by Emma. This allows us to develop multivalent vaccines for complex bacterial infections. In data technology, we have access to the richest and largest dataset, thanks to our data-focused collaborations, including our recent agreement with Tempus, which provides access to one of the world's largest sources of de-identified patient data to accelerate drug discovery. My third priority relates to R&D culture. A key element of my job is to create an environment in which we are ambitious for patients and where our people are empowered to take smart risks and make the right decision at the right time. But taking smart risks is not solely a scientific endeavor. Luke and I chair a portfolio review board with cross-functional teams providing input into all key R&D decisions. My partnership with Luke and Deborah is key and has never been more important as we allocate capital towards those new vaccines and medicines that has the greatest potential to raise the bar for patients.