GSK plc American Depositary Shares (Each representing two Ordinary Shares)

Hello everyone, it's Nick Stone, Head of Invest Relations. Welcome to today's call and webcast. The presentation was sent to our distribution list by email and you can also find it on gsk.com. Please turn to slide 2. This is the usual safe harvest statement. We'll comment on our performance using constant exchange rates or CR unless stated otherwise. As a reminder following the consumer healthcare demerger in 2022, we're presenting performance and growth at the continuing operations for GSK. Please turn to slide 3. Today's call will last approximately one hour with the presentation taking around 30 minutes and the remaining time for your questions. We request that you ask once two questions so that everyone has a chance to participate. Turning to slide 4, I will now hand the call over to Emma.

Hello and a warm welcome to everybody joining this call. Today we are updating you on our performance for 2023, giving guidance for 2024 and providing you with new upgraded longer term outlooks. Please turn to the next slide. In 2021, we set out a series of commitments to shareholders including for a step change in performance following the significant transformation in GSK's structure, strategy, capital allocation and culture. Since then, we've delivered 10 quarters of consecutive sales growth ex-COVID and our priority to invest in new vaccines and specialty medicines to reshape GSK's portfolio is now strongly evident with around two thirds of sales now generated from these two product areas. At the same time, we continue to strengthen our pipeline. The majority of the late stage assets that we highlighted in 2021 have moved forward positively and we've added multiple new opportunities to this portfolio including through targeted business development where we've secured more than 16 acquisitions and alliances for innovative assets and new technologies. We have achieved all of this whilst maintaining a continued sharp focus on operating margins, cash flow and capital allocation, mindful of the need to both invest for the future and to deliver attractive returns to shareholders. Next slide please. Our performance for 2023 demonstrates all of this. Sales and profits ex-COVID solutions grew double digit levels for the year. Sales were up 14% to over 30 billion pounds, a clear highlight being the exceptional launch of the Rex V. Adjusted operating profit was up 16% and adjusted EPS were up 22%. All three of our product areas demonstrated good growth with sales from new products since 2017 contributing more than 11 billion pounds in 2023. This level of performance helped to deliver two upgrades to guidance in 2023 and led to the increased dividend we've announced today of 58 pence per share. We also sustained good progress with our trust in the SG goals, not least reflected in our sector leadership of the S&P's global corporate sustainability assessment. Highlights for the year included moving to phase three for our low carbon ventolin inhaler program, hitting our leadership diversity ambitions two years ahead of schedule and extending rollout of our malaria vaccine to 12 new countries in Africa. Altogether, 2023 provided us with good momentum which we're now carrying into this year. Next slide please. In 2024, we expect another year of meaningful growth. Sales growth of 5 to 7%, adjusted operating profit growth of 7 to 10% and adjusted EPS growth of 6 to 9%. For the period 2021 to 2026, we now expect sales to grow more than 7% on a CAGA basis and adjusted operating profit to increase more than 11% CAGA. For 2026 to 31, with the progress we've made in our portfolio, we now believe that we can deliver more than 38 billion pounds of sales by 2031. This is an increase of 5 billion pounds versus the estimate we gave in 2021 and continues to exclude any contributions from early stage pipeline assets and further anticipated business development. We've also not included any potential future sales contribution from Blenrep here either. So this new outlook represents a marked sales acceleration as in effect, we now expect to reach our original 2031 goal of more than 33 billion pounds by 2026, so five years earlier. Beyond sales, we expect a continued strong focus on margin improvements during this period while retaining flexibility to invest in growth. Recognising that we'll likely face loss of exclusivity for Dolly Tegraveer from 28 to 2030, we're also able to say today that we expect operating margins to be broadly stable through that three-year period. Julie and I will cover these outlooks in more detail shortly, but first we're going to review our 2023 performance and 2024 guidance starting with comments from Luke.

Thanks Emma, please turn to the next slide. 2023 was a great year for operating performance with strong growth across all our product areas and regions up 14% for the full year. Please turn to slide 10. In vaccines, sales were up 24% for the year with the outstanding launch performance of RxV contributing more than 1.2 billion pounds together with the strong performances from Shingrix and our meningitis portfolio. I'll come to RxV in a minute, but first a few points on the rest of the portfolio and specifically prospects for growth. We continue to expect strong growth for Shingrix this year and deliver more than four billion pounds in peak year sales. In the US, our immunisation rate is 35% in those people 50 years and older, which means close to 80 million people who are eligible are unvaccinated with more than four million people joining this cohort each year. We expect 2024 growth to be driven outside the US where the vaccine is now approved in 39 countries, most of which have less than 4% penetration and we're really excited about our new partnership with GFA in China. Our meningitis portfolio supports a major public health need and continues to be an important contributor to growth. Bexera and Minvea sales were up 14% and 12% in 2023. We're also excited to be submitting our MenABCWY vaccine for approval in the US this year. Combined this franchise is expected to deliver around two billion pounds in non-risk adjusted peak year sales. Beyond the market of portfolio, we expect to see further progress in 2024 for our mRNA vaccine with phase two data and flu, the development of our pneumococcal maps and our potential HSC therapeutic vaccine. Next slide, please. As Emma said, the EREXV launch has been exceptional and we expect good growth this year, mainly driven by further penetration in the US, but also early adoption from the international rollout of the vaccine. We're currently approved in 39 countries and in the US, our choice to emphasize our .6% efficacy in the comorbid population continues to resonate well. Script data shows strong brand preference and market data tells us that two out of three HCPs prefer EREXV and we continue to have a strong position with all major pharmacies as we start 2024. Looking into this year, we have a major opportunity subject to approval and ACIP recommendation with a potential label for at-risk individuals in the 50 to 59 year old cohort. This is around 15 million people and on other dynamics for this year, we know we're facing a more competitive environment and of course, we won't benefit from launch stocking. We'll also start to see how seasonality affects use patterns for EREXV, but we are ready for all of this and are ambitious for 2024. We remain very confident this vaccine can achieve more than three billion pounds in peak year sales over time. Overall, looking across the vaccine portfolio, we expect sales to increase high single digit to low double digit percent in 2024 and we're also upgrading our vaccines outlook from 21 to 26 from high single digits to low double digits. Next slide please. Moving to specialty medicines, here overall sales are up 15% for the year driven by strong performance from key products in HIV, which Deborah will cover shortly, respiratory immunology and oncology. In respiratory, our market leading IL-5, Nucala, saw strong growth across all geographies and received severe asthma approval in China. And as we said at our recent respiratory meet, the management event, we expect pivotal COPD data for Nucala in the second half of this year. Before then and excitingly for this class of respiratory medicines, we expect first pivotal results for Depamocomab, our new six monthly IL-5, a key new growth opportunity for our respiratory business. Ben Lister was also a major contributor for 23, with sales up 19% in oncology. We're very pleased with the strong uptake for Ajara and we're also seeing increasing usage in pearly and zidula in patients with endometrial and ovarian cancers driven by generation of compelling data and launch of new patient valued formulations. A quick word on Blennera, sales decrease for the year as expected, but following positive headline results from a planned interim efficacy analysis of the DREAM 7 trial, we are now waiting for further overall survival data from this study and we continue to expect DREAM 8 results later this year. Overall, we can expect another year of strong performance from our specialty medicines in 2024 with growth of low double digit percent and continue to expect double digit growth between 2021 and 2026. Please turn to slide 13. Finally, our general medicines portfolio, sales grew 5% in 2023 led by Trilogy which is now contributing over £2 million per year and is the world's top selling brand in aspirin and COPD. We are now using our respiratory expertise across both vaccines and medicines with the benefit of Trilogy and OREXV Co-promotion being recognised by ACPs who want to discuss both respiratory, prevention and treatment. Overall, we expect general medicines to decrease mid single digit percentage in 2024 and this guidance takes into account the AmpCap removal in the US which we previously highlighted as impacting the business by up to $700 million US dollars. We provided for around 20% of this in 2023 and continue to expect a broadly flat outlook between 2021 and 2026. I'll now hand over to Deborah to cover HIV.

Thank you Luke. HIV sales grew 13% to £6.4 billion pounds in 2023 driven by a notable acceleration in our oral 2 drug and long acting injectable regimens. Sales from these two areas represent 55% of our portfolio compared to an exit of 46% in 2022. For the year, Devato sales grew 33% to £1.8 billion pounds. Cabanuvra grew more than 100% with sales over £700 million and Aperture contributed sales of £149 million. The growth of these products reflects strong patient demand and our deep commitment to innovation. For long acting regimens specifically, more than 80% of US healthcare prescribers now are convinced that these regimens will become a key part of HIV care. Based on this demand and our growth and momentum, we're projecting a growth rate of high single to low double digits in 2024. We're excited by the potential of our early stage pipeline to deliver more innovative, longer acting injectable regimens and as I said at last year's investor event, 2024 will be an year for us as we select regimens for four monthly treatments and self-administered treatment as well as starting the registrational studies for our four monthly prep. We will be presenting data on our early pipeline and our current portfolio at CROI in March. To conclude, 2023 was another positive year of performance and portfolio development. As such, we're looking forward to 2024 and are confident that we are well on track to deliver our 2021 to 2026 sales ambition of 6 to 8%. With that, I shall hand to Julie.

Thank you, Deborah and good morning everyone. Next slide please. Starting with the income statement with growth rates stated at CER, sales increased 14% excluding COVID solutions and we're up 5% overall reflecting continued strong business performance. Adjusted operating profit grew 16% excluding COVID and 12% overall. The margin increased to 29% driven largely by favorable product mix and operational efficiencies as well as increased royalties. COGS and SG&A grew broadly in line with sales excluding COVID. R&D costs increased due to the investment in late stage programs in vaccines, respiratory immunology and infectious diseases with the step up in Q4 due to reorganization costs and the acceleration of late stage projects. Adjusted earnings per share grew 22% excluding COVID solutions and 16% overall and this benefited also from lower net finance expense down 15% following debt restructuring. The effective tax rate was .5% in line with our guidance. Turning to the reported results, total operating profit increased 10% to 6.7 billion pounds driven by overall performance and favorable CCL movements. The reconciliation of total to adjusted results is included in the appendix. On currency, there was an adverse 200 basis point impact on sales and 400 basis points on adjusted operating profit versus the prior year, primarily due to the strengthening of sterling against emerging market currencies. Next slide please. Moving on to the adjusted operating margin dynamics for the year. On this slide, we have shared including and excluding COVID to provide an underlying review of margin dynamics. Excluding COVID solutions, the margin improved 60 basis points at CER to .1% due to improved product mix, productivity improvements and increased royalty income. Including COVID, there was 180 basis point improvement primarily reflecting reduced sales of lower margins of UDI. Regarding SG&A, growth was focused on investment in vaccines, including disease awareness and the launch of EREXV, together with Shingrix, long acting HIV, GenPurley and Dajara. Royalty income also contributed to margin improvement. Next slide please. On free cash flow, free cash flow increased to 3.4 billion pounds and this despite annualising the receipt of 0.9 of a billion from Gilead in 2022. This increase was primarily driven by higher operating profit, together with favorable timing of Zuvudi cash flows and a lower UK pension contribution. This was partly offset by higher trade receivables from sales of EREXV in the last quarter. Q4 CGFO performance was particularly strong, delivering 3.7 billion pounds versus 2.1 billion last year and this increase was primarily driven by higher collections following the strong launch of EREXV and Q3. We expect cash generated from operations to remain strong and we're fully committed to delivering more than 10 billion pounds by 2026. Next slide please. Slide 19 shares our net debt position and how we've deployed capital in the business in line with the capital allocation framework. We look to deploy funds to enhance growth and deliver attractive shareholder returns. We started the year with net debt of 17 billion and strong free cash generation in addition to the monetisation of our stake in Halion supported 3.8 billion pounds of investment in targeted business development and capital expenditure and 2.2 billion in returns to shareholders via the dividend. Overall this led to a further reduction in net debt to 15 billion pounds by the end of 2023 and a net debt to adjusted EBITDA ratio of 1.5 times. Post the year end we conducted a further sale of 300 million Halion shares yielding proceeds of 978 million and leaving our equity holding at just over 4%. Further we reached a successful agreement to acquire Alios Bio subject to customary regulatory clearances and to further strengthen our respiratory portfolio. I'll now turn to our expectations for the coming year. Next slide please. In 2024 we expect another year of meaningful growth for GSK. We expect sales to increase between 5 and 7%, adjusted operating profit to increase between 7 and 10% and adjusted earnings per share to increase between 6 and 9%. Important to note that the cessation of Gardasil royalties negatively impacts profit growth by 6 percentage points within our 2024 guidance. As a reminder our guidance is provided at CER and excludes the impact of Covid-19 solutions. Some points to note for modelling purposes. Firstly our sales composition. As Luke and Deborah have said for vaccines we expect high single digit to low double digit percent growth. For specialty medicines we expect a low double digit percent growth. For HIV sales to grow high single digit to low double digit percent and within general medicines we expect sales will decrease by a mid single digit percent largely as a result of the amcap removal in the US. We also do not anticipate any further revenue from Covid solutions and this will reduce sales growth by 1% and operating profit growth by 2% in 2024. Secondly turning to operating margin dynamics. We have been in an investment cycle supporting our newly launched vaccines and medicines and we now expect to move to a period of delivering increasing returns on our investment. In this new cycle we expect a step down in SG&A growth to a low single digit percentage. Improving productivity and providing margin leverage whilst remaining competitive. We will continue to invest for growth as established in our capital allocation framework and we will continue to build a strong R&D pipeline for the longer term. And finally we expect an increased tax rate of 17% for 2024 and I will now hand back to Emma.

Thanks Julie. So in this final section we would like to provide you with a bit more detail on the key elements that we see as underpinning our performance in 26 to 2031. We know this period is a key area of focus for investors with growth and profitability being two clear dynamics for us to manage. Next slide please. First growth and its most important driver portfolio development. We start from a very healthy position with a core set of marketed vaccines and specialty medicines driving significant growth. With the progress we're making particularly in vaccines and HIV these marketed assets now support an outlook of more than 7% sales growth on a five-year CAGA basis in 2026. These growth drivers will be supplemented by a planned set of near-term new product launches each with peak year sales potential of two billion pounds or more. Here we have new potential vaccines for meningitis, influenza, pneumococcal disease and HSV, a new potential medicines for long-acting HIV treatment and prevention, a functional cure for hepatitis B, bepa reversin, a new portfolio of anti-infective treatments including jeffa-tidusin, new medicines for respiratory diseases with high burden and unmet need, depamocomab and camelopixent and in oncology further indications for gemperle and potentially CD226 targeting a variety of cancer types. Altogether we are currently planning for at least 12 major product launches in the period 2025 to 2031. With these planned launches and our current marketed growth drivers we expect to deliver more than 38 billion pounds in risk and we expect to have more than 3,000 adjusted sales for GSK by 2031. And beyond this, so not included in that 38 billion, we continue to develop a promising early stage pipeline and we will continue to pursue targeted business development. Next slide please. Of course we recognize that there is development risk and that refreshing and progressing our process. By definition not everything will come through. Continued strong execution is needed and we're committed to it. We forecast our sales on an RA risk adjusted and NRA non-risk adjusted basis. As you can see here there is significant potential for upside with successful development outcomes. Our highest adjustments are in specialty oncology reflecting the development risk and the upside returns the assets we have in this space offer. Overall our portfolio offers scale growth opportunity and has an attractive risk profile. More than 90 percent of those future sales come from products already approved or from planned launches of 2 billion pounds or more, most of which we plan to launch in the next four years. Next slide please. You'll be increasingly familiar with many of these assets following our meet the management events last year. We will of course continue to provide updates as we expect significant amounts of pipeline value to unlock this year in 2025 and in 2026 as this growing late stage portfolio matures. As shown here you can see we have multi-billion pound scale opportunities in all of our core product areas. These peak year sales estimates are given on a non-risk adjusted basis and all of them are at at least 2 billion pounds with many significantly higher. So let's now turn to the second dynamic for us to manage in 26 to 31, a continued focus on profitability and disciplined capital allocation. So over to Julie to comment on this.

Thanks Emma and first I will cover operating margins. Since 2021 we've delivered an increase in margin of 290 basis points and we remain focused on delivering further margin improvements in the next three years to achieve an operating margin in excess of 31 percent by the end of 2026. This represents more than a 530 basis point improvement over the five years. Our margin is benefiting from the strategic shift we've made to invest in vaccines and specialty medicines together with the significant productivity improvements across supply chain, commercial operations and global functions. This margin progression is after absorbing various headwinds including several already highlighted such as Gardasil royalties and the impact from AMCAP. These are all factored into our outlooks. Moving to the period 2026 to 31, whilst we do not plan to guide on operating margin beyond 2026 we do understand that investors are concerned about the period when dollar tegevira loses exclusivity. We would therefore like to set out our expectations for this three-year period starting in 2028 with the majority impact in 2029-30. Offsetting this are a number of positive factors. Firstly and very importantly the of new long-acting and -long-acting HIV treatment and prevention therapies. Such that by the time the loss of exclusivity starts we would expect around 40 percent of our HIV business to be in long-acting therapies. Second the mixed benefit to the operating margin from growth in vaccines and specialty care products which we anticipate to be around 3 quarters of revenues by 2026. Thirdly accelerating productivity gains. Notably in supply chain and in SG&A with increased use of AI and analytics to underpin and further support GSK's profitability in this period. Taking all of this together our expectation is for operating margins to be broadly stable through the three years where dollar tegevira loses exclusivity. Known headwinds including the impact of the IRA on certain products are also incorporated into this expectation. And finally we will continue to have a strong focus on margin improvement and ensure our P&L is both competitive and invested for growth. We remain ambitious and will seek further upside through progression of the early stage pipeline, targeted business development and a continued drive for efficiency. Next slide please. Turning to capital allocation. Our first priority remains to invest in the business with capital allocated towards development of the pipeline both organic and targeted business development. We also remain committed to delivering attractive returns to shareholders and pursuing a progressive dividend policy. We are therefore pleased to announce an uplift in the fourth quarter dividend to bring the total for 2023 to 58p allowing shareholders to benefit from the upgraded performance last year and our increased confidence in the future. In addition we are announcing today that we expect to pay a dividend of 60p for the year 2024 in line with our progressive policy and to be paid in equal quarterly installments. Next slide please. It is important that we share our progress with you and that you're able to track our major milestones and value unlocks Emma referred to earlier. Last year we set out an IR roadmap for investors covering the next 18 months inclusive of four major areas, execution, pipeline, capital allocation and investor engagement. Our progress on this has been very positive and is available in our appendix. Today we are providing you with a new and updated roadmap for 2024 and extending this into 2025 outlining the milestones and potential inflection points we expect to deliver in the next 24 months. The phase three and regulatory decisions are highlighted and aligned to the planned major launches Emma referenced and include expected progress for men A, B, C, W, Y and vaccines, DepuMoCMab, NeuCala, COPD and Camlapixent in respiratory, Jeopardythin in infectious disease together with BlomRep and GemPurley in oncology. We hope you'll find this useful and we also look forward to providing you with updates at several scientific conferences this year and we were also planning to hold two additional meet the management events covering oncology in the summer and selected early stage pipeline assets towards the end of the year. I will now hand back to Emma to conclude.

Thanks Julie. So to summarise GSK is delivering on its commitments and performing to a new standard. The excellent performance that we delivered in 2023 provides us with clear momentum and we expect to deliver another year of meaningful growth in 2024 as we continue to focus on prevention and changing the course of disease for millions of people. Our progress means we're also upgrading our outlooks for 2026 and 2031. All of this bodes well but equally we also know there is much to be done. We remain very focused on delivering this potential and more at continued pace for patients, for shareholders and for our people. Combining science, technology and talent to get ahead of disease together. With that I will now open up the call for the Q&A with the team.

Thanks Emma. We're going to take our first question from Peter Wampus. Peter over to you please. Hi yes thanks. You said one or two so I'll stick two if I may. Firstly on the RECSV I wonder if Luke can just talk a little bit about the contracting discussions that you've got in place for 2024 given comments from Pfizer about trying to become more competitive this year and if you could give us any insights into the sort of levels of stocks that you have at the moment and whether that's now a sort of sustainable level that you think is going forward given the apparent lack of seasonality at least relative to flu that we're seeing. And then just a quick one just on oncology. Looks like you've got two over two billion peak year sales potentials in oncology that you're including in the 2031 now. We're curious when can we get some visibility I guess to increase the confidence in the oncology part of that 38 billion and to be clear that presumably doesn't include a return of Blenrec. Thank you.

Right thanks Peter. Well we'll come to Luke first on RECSV. We're obviously delighted with doing the floss this branch of Blockbuster in four months that the company's ever done in 23 and ambitious for the path forward. And then I'm going to ask Tony to comment on oncology. Just to confirm though Blenrec isn't included in any of the outlets although we do have some more data to come and as a reminder in one of the slides that I presented this is the more heavily risk-adjusted portfolio in our outlook to 2031 and particularly with the 226 portfolio not starting right towards the end of that period but Tony can give you more visibility and when we'll know what for Jim Purley. Thanks

Peter. Look stocking levels are about 20 percent of what we've sold in and if you remember we had that initial loading with a launch as you'd expect you need to fill the shelves but yeah now we're at steady state. I think you know agree with you in terms of shifting away from I think we're increasingly confident this is not going to be a seasonal vaccine and we're working very hard to do that. I think that certain season data that we'll get in the middle of the year will also help to cement that. In terms of contract as you can imagine I'm going to be a little bit coy there because as we've said on the past call people get up early to listen to these calls. So but you know I would say we're very pleased with the launch so far and the 2023 performance but you know our mindset is this is the first round of a multi-round fight and in 2024 of course we've got a third boxer jumping into the ring to make things interesting. So we're very focused on it we're very confident I think we've shown that we can compete with the best and our aim is to is to have another good year in 2024.

Thanks Luke. Tony from Coge.

Yeah um hi Peter so just to reiterate first of all BlameRap is not in the projections. For Jim Purley as you've called out there are two areas and the way to think about this is the continued development of value from Jim Purley in areas where the underpinning genetics of the cancer support its activity for example building on the results that we have with Ruby and looking at other areas which DMMR or MSI high status are likely to generate transformative results. In addition we've taken a careful look back at what we might call opportunities for which the PD1 class is showing some effect but adjustments in the approach would deliver potential differentiate long-term differentiated efficacy for Jim Purley that would be in the third line head and neck and then broadly speaking which and you'll hear more about this towards the end of the year is the data that we have in the CD226 access begin to mature and we hope meet the management session is going to be associated with exploring our combinations with TIDGET in particular and that's a question of how those data play out in loan and other opportunities like head and neck.

Thanks Tony. Next question please.

Okay so we're going to take our next question from Joe Walton at UBS. Joe over to you please. Hello, I'll come back to you Joe, bear with me and we'll take our next question from James Gordon JP Morgan. James over to you please.

Hello, James Gordon, JP Morgan, thanks for taking the questions. First question was just about OREXV and about the revaccination data that I think we're going to get in the first half. So I remember at one year there wasn't a revaccination benefit even though the protection had fallen quite a long way. So my question is confidence that we are going to see a strong benefit and how strong a benefit do you need to see? What would be a clinically meaningful benefit that would justify revaccinating people at two years and is it right that the 26 assumption is that there is a strong benefit from revaccinating people? So that's the first question please. Second question was just on the long term margin. So I saw the comment about broadly stable operating margin and as dollar tag with it goes away and I understand it's partly about productivity gains but can you just remind us what is the head with how much you're losing? I think when you did break out Veev before and dollar tag with it when it was really just dollar tag with it, it was a margin north of 70% and presumably the margin will be even higher as that business has grown and you've got more operating leverage. So is that right that you'll be losing a business that's more than 70% EBIT margin when it goes away and is part of it that you think there's going to be a new pipeline that's going to come in at a similarly high margin or am I overestimating the profitability you'd lose?

Thanks James. So we'll come to Julie to give you a response on the building blocks to the margin but first Tony to comment on revaccination. Just to be clear that the 26 outlooks we haven't given the specific 26 outlooks for RSV. We've given PQS sales for RSV and overall vaccines growth upgraded outlook to 26 as well but this is obviously a key asset and a very exciting and more data to come. So Tony. Yeah

so James just across a reminder that the existing two-year data is what is supporting the de-seasonalization of the product. I'll talk about the plan to get to the decision point for determining the seasonality of the product. We're on track with regards to the third season data that will be presented at ACIP. It's worthwhile reminding everybody that the season is called by CDC and the determination of attack rates. So on track for that as far as we stand at the moment and that will include the boost comparison. If you ask me to make the best guess based on what we see from immunogenicity data in the 006 study and other smaller studies then I think we're heading for a two-season vaccine again though that and the data supporting it will be the basis of the ACIP decision and our conversations with ACIP. So obviously we're at the plan at this

point. Yeah and I think the other thing to stay on de-seasonalization, as Luke presented, obviously RSV vaccination is holding up better than flu and pneumococcal but it still came down between October and December and we've got work to do and we will soon discover more over the coming quarter on how those efforts play forward. Julie?

Thanks Emma and thank you for the question. In terms of the obviously we are conscious that people are concerned about the loss of margin from it's not at the level the HIV business of the 70% that you mentioned. We've continued to invest heavily in this franchise and build in particular the long-acting portfolio and the reason for the confidence that we can hold it stable during that period. First of all I draw attention to the 12 launches that Emma called out in her review. We've got some of them near term. I mean the majority of these will be launching within the next four years so the inflections are coming quite quickly but we've got meningitis, ABCWY, we've got the mRNA influenza. We've also very importantly got HIV. We're confident of the four months and we've got work going on on that already so the long-acting portfolio very importantly. At the time the dollar-tang of the patent expiry starts we expect to have 40% of the business already in long-acting so that's an important mechanism. In addition to that as you know we've got Kamla Picsant launching, Decamo, important readout coming out in the first half of this year together with the anti-infective portfolio and others that Emma mentioned so 12 major product launches just coming out now the majority in the next four years. The other factors are the productivity gains. We're very confident you see we've stepped down SG&A growth into 2024. Luke and I have worked very closely together. We are very confident that we can leverage the great base that we've built and very importantly some of those assets that are launching particularly in respiratory we've got very capable field forces in the areas where we're launching these assets so the leverage capability is there and you've seen us leverage the margin. You know we're committing to more than 500 basis points already by 2026. You'll see is we're never going to be satisfied. We are going to grow the top line. The 38 billion it we're staying above the 38 billion that's a risk adjusted number very importantly. Secondly, we continue to do business development. We've got the balance sheet to do it. It's part and parcel of building the R&D pipeline further and also finally that more than 38 billion does not include those early stage projects that Emil alluded to in our conversation. So we're very confident of withstanding the DTG patent expiry.

I mean in the end the outlooks that we're updating today we have added five billion top line versus where we were in the summer of 21 and we know there's still more to do so we're confident on making further progress with a lot of ambition. Next question

So we'll come back to you Joe. So hopefully she'll speak now.

Thank you. Could I ask about US patients are already beginning to see lower co-pays as we go into 2024. Is there any benefit that you have in terms of less charitable giving to support people on Medicare who might need your assistance or any view that you have for some of your more expensive medications that there would be an increase in volume coming through. My second question would be to look a bit more about Shingrix in China. If we look at how Merck has dealt with their relationship with Zifei and Gardasil which has obviously been extremely successful. Merck is promoting as well as Zifei promoting. So given your relatively small base in China can you tell us what you are doing to ensure that there is a strong uptake of Shingrix in China so that over time it will be more than the minimum amount of sales that Zifei is taking from you. Thank you.

Thanks Joe. Both of those questions will come to Luca. We're after a record quarter on Shingrix again. We really do see the Zifei deal as a very important building block for the ongoing growth of this great vaccine. So do you want to add anything to

that? Thanks Joe. I'll cover the China question first. So the way the deal is structured we still maintain the license in China and we preserve 600 headcount. We are promoting the product in addition to Zifei's structure which is several orders of magnitude larger. We also partner with them in terms of profile positioning and life cycle work with Shingrix. So we're very engaged and I think the partnership has started very well. There's high levels of trust and you mentioned the Merck structure which has been in place I think 11 years nearly 12 years now and that's been very successful. So our aim is to replicate or even exceed that. One thing to keep in mind with revenue recognition in China next year is driven by shipment. So there'll be a bolus which is between 60 and 80 percent depending on how much we shift which will be recognized in quarter two. So that's just one watch out. But yeah we're very excited about the long-term potential for Shingrix in China and the partnership and also the capacity to expand that to include RSV. In terms of co-pay assistance, indigent programs etc. we do have extensive programs across the business in HIV of course oncology and other areas. We're not seeing increase in those Joe but we do have extensive programs that people can take advantage of. And of course the co-pay has now been removed from Shingrix and RSV which is a big advantage for senior citizens.

Next question please. So our next question is going to come from Simon Baker. Simon, over to you please. Simon, bread and

bone. Thank you. Thank you for taking my questions. Two if I may please. Firstly on RxV, RxV XUS, you've said in the past that you expect a Shingrix-like broadly flat global pricing for RxV. Given that that's now beginning to roll out, I just wonder if you could confirm if that's still the case and give us any any updates on how things are going outside in terms of those negotiations. And then secondly, and forgive my pronunciation, I'll probably get this wrong, on the AORUS acquisition, it's slightly earlier than we've seen from your acquisitions in the past where you've prepared been prepared to pay more for later stage products. So just wondering if you could give us an idea of whether this marks a shift in your business development approach or whether there was something particular about that T-slip which you go earlier than perhaps you've done in the past. Thanks so much.

Thanks very much. Well let's come to Luke first on the globalisation of RxV, although the US will still be by far the biggest part of the business, but obviously that's going to be a key contributor for the future. And then Tony to comment on the AORUS deal and our consistent approach to CWP to BD which starts with getting a very good return on the investment of that because of the sizeable assets and their differentiation which is definitely what we're excited about here. But first you Luke.

Thanks Simon. Yeah I mean as I said we're approved in 39 countries. If you look below that and it's very similar to what we've seen with shingles, it just takes time to assemble the arguments for the infrastructure in those countries to review the data. We know that some governments are waiting for that third season which we'll have shortly, but if you look within those 39 countries we've got nine that have issued recommendations and four that have voluntary reimbursement. So for example I was in Germany yesterday, if you look at the 60 plus population we've already got reimbursement through the six funds on about 24 percent of that population. So it's early days, but in terms of pricing our aim in the private market is to preserve that pricing level. Of course always we are open if we can secure a contract because the structural nature of those contracts is such that we don't have to do the DTC etc that we need to do the DTC. So we're working actively to get a recipe to China as quickly as possible.

Thanks Luke. Tony, comments on AORUS and BG Mobile.

Yeah thanks. Hi Simon. So first of all the way to think about the AORUS deal, let me re-emphasize something to begin with. This is in the low T2 population so it gives us access to an additional 40 percent of the severe asthma population for which Nucarla and Daphymochromab aren't addressed. Now similarly to Nucarla and Daphymochromab, the reason we were confident to go earlier with the AORUS asset is we have a very clear understanding of the PKP proposition there so you can learn an awful lot with regards to projected dosing and efficacy from Phase 1B data which is the case with AORUS and we look upon that as being a -in-class opportunity which will appear in the market potentially first in class with a Q6M profile and well-matched N-step and Nucarla. Those features I would say emphasize a continuing focus that we'll have on BG with deals of about that scale that match our overall therapeutic area focus in an appropriate strategic way with the factors that Eamonn just mentioned. For earlier deals then what you should be expecting there is a focus more on the underpinning technologies that are transforming R&D for us.

Very true thank you and obviously extremely clear as well top priority in the capital allocation framework and as Julie laid out in her slides around allocation of capital that's a consistent approach we're taking and was all part of the de-merger strategy to create that balance sheet capacity for us to put BD as the way we do R&D at GSK now as it is across the industry. Next question please.

Okay so we've got about seven people with their hands raised, we've got about 10 minutes left so if I can ask people to keep their questions short and equally we'll try and keep answers concise but our next question is going to come from Tim Anderson at Wolf Research. Tim, over to you please.

Thanks if I could go back to Shingrix in China and just drawing the analogy to Merck's Gardasil or even your Cerverix the question I have is the disease awareness among the general population about shingles versus cervical cancer vaccine because with Gardasil it's been high consumer awareness that's really kind of created this classic pull demand at the consumer level. What I don't have a feel for is what is it like with shingles among consumers in China is the awareness disease awareness high or do you have to build that? Thank you.

I stretch it yeah thanks Tim it's relatively low but you know I was I was in China at the time and it was also very low. What we found through our market research is that people are receptive to it. The main challenge we had was just navigating the 30,000 points of vaccination in China because all vaccines need to be administered in those centers so I think we can build that awareness and now whether we can get to the level that Gardasil did before COVID it was actually the number one selling product in China so a remarkable achievement but the key I took away from that is one you've got a company that partners well with multinational over many years with extensions to their relationship and two they can build a market in partnership very successfully so yeah I'm very optimistic about the long-term outlook there with China.

Thanks Luke next question please. Take our next question from Richard Parks at BNP Carrabass. Richard over to you please.

Hi thanks for taking my question. I should stick to one. I'm just wondering if you could just discuss the challenges to specifically growing RxV in the US market next year. It looks like about 10% of the eligible population has been vaccinated with an RSV vaccine now and obviously clearly that leaves a lot of room for growth given the 35% penetration you've achieved with RxV but it's taking you six years to get to that level and clearly the RSV market competition is going to intensify over the next 12 months so given the very strong start you've had I'm just wondering how challenging it will be to grow RxV specifically in the US market to what extent we should expect growth to be more driven by XUS. Thank you.

Sure Richard great question so I think the pie is going to grow. You've got three companies in there. The level of awareness is remarkable already. I think it's 86% awareness for individuals in the US around RxV. The willingness to prescribe and recommend on the part of doctors and pharmacists is very very positive and your numbers are right. I mean if you look at Shingrix it was 4%, 11%, 17%, 23% in those first years so hitting 11% immediately is encouraging but we just don't know what the other two competitors, how they're going to behave going into the years so that's an unknown but again if we look at the long term if you look at 65 plus individuals who are 65% and above about 72, 73% typically every year get the flu vaccine so that's the potential here and that's why we're very confident about a long-term 3 billion peak revenue outlook that you know it'll let's see how we go in 2024. That's probably all I should say at this point.

Worth by that in the cost of the 50 plus label as in the 15 million at-risk eligible individuals.

Yeah great point. Okay next question is from Andrew Boundless 15. Andrew we can't

hear you.

There we go. Sorry about that. I apologize. So two questions for Deborah on HIV. First given how important the switch is to long acting for both the margin the revenues could you talk to what are the current barriers to adoption? Is it any evidence for step editing given you've got 50% calling under PBMs? Is it clinical inertia? Is it access? I'm curious to understand that in terms of the risks and opportunities there and then second I note that there's been a pause placed on your litigation with Exavir for their Cabo Pro drug. Given the patent expiration on Cabo and I'm thinking particularly of Apertude is there any interest in licensing this compound in order to secure the future of a once yearly long acting formulation? Thank you.

Thanks Andrew. So in terms of barriers to switch in the long acting market actually they're pretty typical to the barriers that you see across many long acting injectables that are in Medicare Part B and part of that clinic capacity so for us that is a barrier but we're seeing the belief in physicians increase that long acting is going to be a bigger part of the way that they treat their HIV patient population so we are seeing them expanding capacity a bit it's a slow journey. The second thing is the ability to get physicians offices ready and able to manage their way through the benefit verification the elements of specialty pharmacy versus buy and bill. Again we are seeing more and more uptake and more and more process flows within the clinician offices that are making this faster and slicker but still it is a learning journey as we are building a brand new market for HIV patients so I would say complexity around the pay and pharmacy stroke and buy and bill and the capacity to inject in the clinics the two biggest barriers and we're seeing significant progress on all of those areas which is why we're seeing the continued significant growth amongst long acting injectables in both PrEP and in treatment mainly because there is enormous patient demand and that just keeps on you know growing as awareness grows. I mean in terms of XIV I'm not going to comment on any of the litigation but you know we have our own in-house long acting injectable that when we're formulating have a tech review to get to every four and hopefully we'll be able to get to a point where we can get to every six months either with the H184 or other options and we've also got in-house options that can take us to every 12 months but we keep an eye on the whole landscape from a VD perspective of HIV and if there is

next question please.

Okay our next question is from Graham Harriot Bank of America. Over to you Graham.

Hi Graham.

Thanks for the questions. It's going back to RECV in the third season data can you just confirm that there's no vaccine efficacy measurement to compare one and done vaccination with an every other year vaccination in either the RSV 006 or 004 trials and if it is just immunogenicity data that you're going to be using there how do you go to ACIP and convince them that a boost in immunogenicity in the third season would correlate with vaccine efficacy when we didn't see that in the first season data and then second question just any sense of what percentage of the high risk or co-morbid population so let's say over 80s or the co-morbid population has been vaccinated with the RECV now or has it been across a fairly broad age range thank you.

So very briefly Luke any comment on the penetration and the

Yeah it's about 13% in this the the older individuals so 65 plus is about 4% in the 60 to 64 that's the only data we have at this point Graham but we will get more into too.

And on the third season the comparison will be exactly the same as the one we took in second season Graham so that is vaccine efficacy based on a three year duration versus a three year list. Sorry, can we have the list first? Okay

so I'm going to try and push this a little bit over I might have a little bit of a call starting but can we take the next question from Mark Sellett-Morriston.

Yeah thanks very much Nick just a quick one sticking on HIV ahead of the CROI data you know historically phase two data is translated very nicely into phase three profiles so when it comes to assessing your combination options and the four month formulations how confidently should we be extrapolating phase two data into phase three and effectively the risking of the of the portfolio strategy?

So just to answer that very quickly so we're incredibly confident in our ability to replace you know a significant proportion of the revenue that will be lost through the Donatello of their patent expiry. This is a big year for us so we will be presenting data at CROI and we'll be starting the phase three study for every four month prep we'll be regimen selecting every four months for treatment and we'll also be regimen selecting for our self admin so I would say we're extremely confident in the progression of our HIV pipeline and very confident in the statement that we've been making for some time that we will be able to potentially replace the significant proportion of the revenue that you'll lose when Donatello goes on.

Great Nick. We've got two more questions so I'm going to take the next question from Kerry Holtzford at Barenburg. Kerry over to you.

Oh hi thanks Nick. Just one final pipeline question well recently launched product question OJARA I know it's early days but how is the US launch progressing relative to expectations and in which of the drugs are patients predominantly using this drug? Thank you. Very well Luke.

I'll go quickly so 750 patients since launch 43% of them in academic centers 57% are in community centers. Market research is very very encouraging unaided awareness is well above benchmarks aided awareness is 99% I'm not sure about that 1% we've got around 15% patient share in patients with anemia and about 25% share in second line. If you look at the intent to prescribe one quarter of doctors have already prescribed it and over 64% who have not prescribed it intend to prescribe over the next few months. So very you know very encouraging very exciting launch.

Great and so last question Nick.

Last question so Steve Starla, Cindy Cowan, could achieve great state.

Thank you. On Cabanuba emerging resistance in 1 to 2% of people is viewed by clinicians as a real risk seems to occur in the obese population but could tarnish prospects overall. So I'm just wondering what is GSK's position on this and secondly pneumococcal vaccine do you plan an efficacy study and if not is that because you think that is not important. Thank you.

Well we do think needing the coffee vaccine is very important but so Tony can comment on that but Deborah I'm not sure we characterize it quite as Steve has.

No so you've got less than 1% failure on Cabanuba there are some risk factors that all physicians are aware of obesity is one of them being resistance to rupabrine is the other and then there is a sort of relatively rare subtype so we're clearly characterizing where people should not use the drug it's a very you know limited population and the real world evidence is actually showing less than 1% in fact significantly less than 1% failure because physicians have taken on board the multivariate analysis that guides where to use it and when they use it in that population you see very low low levels of failure and very very high satisfaction with the drug and continuity on the drug over time so that's why we're seeing significant growth with Cabanuba that we are.

Thanks Tony. Just quick quickly then on pneumococcal obviously we're focused on using immunogenicity data and in particular restarting the infant 24 days a year alongside the data that we have in adults and starting adult 30 plus in terms of our strategies with regards to vaccine efficacy and broader competitive content of that I'll keep that to future discussions.

Great so thank you very much everyone for the call I'm very pleased to have been able to share with the team today as GSK is delivering on its commitments strengthening our outlooks for growth we are making great progress we know there's always more to do and looking forward to keeping you updated thanks to everybody for joining the call.