GSK plc

Hello everyone, welcome to our half year in Q2 2023 comp score and webcast for investors and analysts. Presentation was sent to our distribution list by email and you can also find this on gsk.com. Please turn to slide two. This is the usual state harvest statement for comments on our performance using constant exchange rates or CR unless stated otherwise. As a reminder, following the consumer healthcare demerger in 2022 to form HAYIN, we're presenting performance and growth on the continuing operations for GSK. Please turn to slide three. Today's call will last approximately one hour and the management presentation will take between 30 to 55 minutes with the remaining time for your questions. For those who wish to ask a question, please join the queue by raising your hand. Press star nine to raise and lower your hand if you're on the phone and we request that you ask one question so that everyone has a chance to participate. Our speakers today are Emma Walty, Tony Wood, Luke Miles, Deborah Waterhouse and Julie Brown with David Redburn joining the rest of the team for the Q&A portion of the call. Shending to slide four, I will now hand the call over to Emma.

Thanks Nick and a very warm welcome to everyone joining us today. I'm delighted to be presenting to you all another set of excellent results for GSK. Please turn to the next slide. Sales and profits grew at double digit levels for the quarter, our sixth consecutive quarter of strong growth. Sales were £7.2 billion up 11% excluding pandemic solutions. Adjusted operating profit was up 12% to £2.2 billion and adjusted EPS were up 17% to £38.8. This is further evidence of a sustained step change in GSK's performance and this momentum supports our decision to upgrade our guidance for the year. Our performance also demonstrated delivery of the strategic choices we've made to develop the portfolio and the R&D pipeline. New products, notably in vaccines and HIV, all made healthy contributions to growth and reflect the investments we've made to prioritise these parts of our business. 62% of sales are now coming from vaccines and specialty medicines which we expect to provide durable and profitable growth through the decades. And new products launched since 2017 have contributed sales of £4.6 billion so far this year, adding nearly £1 billion of additional turnover compared to 2022. Equally, our general meds business continues to perform alongside the other parts of our portfolio. We are deploying capital in a financially disciplined way to invest in growth and deliver stronger returns to shareholders. We are delivering our commitments and as you can see from the slide, we are on track to hit all the targets we set out in 2021. As you all know, our very first priority for capital remains to invest in continued pipeline progress and we know this is the key question for shareholders. At the core of our work is an aggressive pursuit of organic pipeline delivery and targeted business development. We're making good progress on both and there is more to come. The Drupal Erexie this quarter is, we believe, transformational and set to bring enormous benefits to people aged over 60 who are at annual exposure of RSV. Erexie is spearheading the next wave of vaccine innovation at GSK. This quarter we presented positive clinical data for our Pentavalent meningitis vaccine, secured regulatory approval for shinwits in Japan in at-risk populations and achieved US FDA fast-track designation for our Candidate Vaccine to Prevent Golorrhea, a vaccine that is considered a high priority packaging by the WHO. National Institutes are recently at the management event. We have substantial innovation to come with potential new vaccines to prevent influenza, pneumococcal disease and herpes simplex virus. This all sits alongside other innovation in infectious disease like Becca reversin for hep B and a new portfolio of much-needed anti-infectives. We're also very pleased with the progress we're making in our HIV portfolio. A key aspect here is of course to develop the portfolio to replace the loss of exclusivity for Dolutegravir which, as a reminder, is not expected to start until 2028 in the US and 2029 in Europe. We are well on track to do this. We expect sales from our new long-acting regiments of around £2 billion by 2026 and to add to this, clinical development plans are advancing very well to support new -long-acting options launching from 2026. And with these innovations, we aim to replace the majority of revenues from Dolutegravir and support profitable growth for GSK well into the next decade. And we're looking forward to talking to you more about all this at our HIV meet the management event in late September. Equally, we continue to make good progress in our business development. Here, we're targeting acquisitions and partnerships to strengthen and complement our core therapy areas to help deliver above and beyond our current long-term outlooks. So you should expect to see us keep up probably the same levels and pace of BD as we have in the last 18 months. This quarter, we completed the acquisition of Bellis Health, building upon our respiratory expertise for the addition of Camelopixence, a phase three potential -in-class treatment for refractory chronic cough. Our pipeline and broader respiratory is developing well too across all three product areas and we're increasingly confident it will be a major source of new long-term growth. Next slide, please. Our focus is to deliver competitive performance and improved shareholder value in the short, medium, and long term. With our current momentum and further successful execution of our priorities, we are very confident in our ability to deliver profitable sales growth in all three of these timeframes. For 2023, we now expect to deliver sales growth of 80 to 10% and adjusted operating profit growth of 11 to 13%. For 2026, we expect to deliver sales of more than 5% and adjusted operating profit of more than 10% on a CAGA basis. And by 2031, we're confident we will have effectively absorbed any impact from the loss of exclusivity across the portfolio to deliver our stated ambition of more than 33 billion pounds in sales. We know the ambition is significantly higher than current market expectations and over the next year, we'll continue to bring you more clarity and specificity on our building blocks to deliver profitable results through a series of meet the management events, data readouts, and a more comprehensive update against our 2021 long-term plan. Let me now hand over to Tony who will talk you through his latest thoughts on R&D priorities and performance.

Thank you, Emma. And hello, everyone. It's great to be with you today. Please turn to slide nine. I'm pleased to report that we're making good progress in strengthening the pipeline. And we know there's more to come. Our absolute focus is to develop a robust pipeline that can drive sustainable, profitable growth. I see this being achieved through a combination of organic delivery and disciplined business development, overlaid with continuous improvement in R&D productivity. This is reflected in my three priorities for R&D shown on this slide. And in the delivery of our strategy, which is focused across four strategic areas and aims to leverage our deep understanding of the immune system and use of advanced technologies. Next slide, please. It's important that we allocate our capital and resources effectively. I think about this from two perspectives. First, from a therapeutic area standpoint, our priority is to build on our strengths and leadership in infectious diseases, HIV, respiratory immunology, and our emerging capabilities in oncology. This is by investing in both organic and targeted business development to deliver first or best in class innovation, balancing probabilities of success and sales potential. And we apply the same disciplinary returns criteria for both approaches. In addition, we also seek platform and data technology enabled opportunities. Second, from a time perspective, I want to develop a partner or acquire vaccines, specialty medicines, and technologies with significant commercial potential that can meaningfully contribute to sales and proper growth in the latter part of this decade and beyond. Ultimately, I want a portfolio of R&D innovation that offers a good balance of risk and return, and which can drive growth in the GSK above and beyond the ambitious, sorry, I'm just talking about. Slide 11, please. Our pipeline today comprises 68 assets in clinical development. Two-thirds of the assets within our development portfolio are focused on infectious diseases in HIV. In infectious diseases, we're focused on seasonal respiratory viruses, bacterial, fungal, and chronic viral infections. Vaccines are friends and centre over this effort. Emma has already mentioned the RxV and some of the innovation that is coming behind it. Our PentaVillain meningococcal vaccine candidate recently met all primary endpoints in the phase three trial and demonstrated immunological effectiveness against 110 diverse and NB strains. These account for 95% of circulating strains in the US. Five serogroups are responsible for most meningococcal infections and no single approved vaccine can yet protect against all five. If approved, then ABCWI would do so, offering a simplified immunization schedule and supporting increased vaccine uptake. This is important when you consider that only 30% of adults currently receive full protection from all five meningococcal serogroups. We're on track to submit the vaccine to regulators in 2024. Our novel -new-mococcal vaccine candidate, acquired through the AffiniVax Transaction, has also shown very positive immune response across stereotypes. We continue to examine potential acceleration options for the 24 and -day-old programs in infants and younger adults. With QVAC, we're looking to disrupt the influenza mark and deliver new multiviren combination vaccines using next-generation mRNA technology. Multiviren phase one and two flu and COVID trials are underway and we expect data from these towards the end of this year and the start of 2024. In chronic viral infections, in addition to geographic expansion, we're looking at new growth opportunities for shingrays. These include extending the population who might benefit from protection to a younger such as the recent Japanese approval to include adults aged 18 to 49. We continue to review the potential need for a booster. Additionally, a growing body of evidence suggests the shingles vaccination may reduce the risk of dementia. We're leveraging our expertise in herpesvirus, salvexostivirus, to develop a promising injectable treatment for the control of herpes simplex virus reactivation. Our plan is to initiate proof of concept studies later this year. In anti-infectives, we've now assembled a promising portfolio of new medicines. Jepotitis, in which we stopped early for efficacy and was anticipated to launch next year, has the potential to be the first oral antibiotic to treat uncomplicated human tract infections in more than 20 years. Complenting this is Tevita from Spiro Therapeutics, which, if approved, will provide us with access to a late-stage antibiotic with the potential to treat complicated human tract infections. Brexifam, a novel -in-class medicine to treat fungal infection, acquired through an exclusive license agreement with Synexis, completes this trio. The perivostal is another potentially transformative treatment which could help patients achieve a functional cure for chronic hepatitis B. We'll afford to present the data from our phase 2B trial, B2Gether, later this year. This trial is designed to answer whether interferons need to improve the durability of In HIV, we're entering an important period in our clinical development plans for potential -long-acting treatments and prevention options. These spearhead the transition we expect to deliver in the HIV portfolio over the next five years. We'll be setting out more detail on these in our third quarter investment bell. In respiratory immunology, we're prioritizing late-stage development of our IL-5 medicines at the moment. The addition of Camel Picsum to highly selective P2X3 antagonists for the treatment of refractory common cough also provides us with another asset in phase 3 development. Luke and I expect to be sharing more with you on our plans and opportunities in respiratory before the year end. In oncology, we're progressing the regulatory submission for mongrelotamin following the US FDA's recently extended review date to September. We're confident this new medicine will help tackle the significant and debilitating medical needs of myelofibrosis patients with anemia. Given the makeup of our current portfolio and capabilities, our approach in oncology is to prioritize the development of novel medicines to treat blood and women's cancers and to explore other potential breakthroughs in immunoncology. Champerley, our highly effective PD-1 inhibitor, is central to this approach and exploration is backbone treatment for using combination of further proven or promising therapies within development. You'll see how many of the elements I've just touched on are expected to play out over the next 12 or 18 months. I believe these, together with targeted business development and a series of important phase 1 and phase 2 investment decisions, will lead to significant progression in this pipeline in the short term. Alongside allocating resources to prioritize and accelerate clinical development, I want us to continue to improve overall R&D productivity. We've made progress. Success rates have cycled times our own proven, but more needs to be done. For me, this really means two things. First, doubling down on leveraging our scientific capabilities with the use of new platform and data technologies. And second, developing our partnering and external sourcing capabilities. With AI and machine learning applications now rapidly maturing, access to proprietary data to feed models and generate novel insights has achieved strategic differentiators. For example, we recently presented data results for Bepa-reversing. From the BeClear Phase 2B trial, this deep multimodal analysis helps us to develop a clear heterogeneity mapping chronic hepatitis B, stratifying individuals treated with Bepa-reversing to three subtypes, a highly enriched response, a mixed response, and a non-responded subtype. Each defined by distinct clinical, neurological, and molecular trajectories, and associated with a number of markers. These predictive models provide greater precision than existing markers and suggest potential enrichment strategies. We're competitively placed in platform technologies and have laid strong foundations in data technologies. I want us to now vigorously scale and build on these foundations to better de-risk targets and rapidly test and progress high-quality -and-class candidates, all with the aim of accelerating and improving the success rates of our development programs. In summary, let me close by saying I'm pleased with the progress we've made so far this year, and that we have clear plans in place to move forward at pace to deliver on our key objectives for R&B and support the overall growth ambitions to GSK. I'll now hand it over to Luke on slide 14. Thanks, Tony.