Emma Walmsley, CEO Agenda Q2 2018 progress Emma Walmsley, (15 - - PowerPoint PPT Presentation

Emma Walmsley, CEO

Agenda

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Q2 2018 progress (15 mins) Emma Walmsley, Chief Executive Officer Q2 2018 financial results (15 mins) Simon Dingemans, Chief Financial Officer R&D update (60 mins) Dr Hal Barron Chief Scientific Officer and President R&D Q&A (60 mins) Informal reception Q&A (30 mins) Break (15 mins)

Q&A panel

Axel Hoos Oncology Therapy Area

Patrick Vallance President R&D

Brian McNamara CEO, GSK Consumer Healthcare Luc Debruyne President – Global Vaccines David Redfern Chief Strategy Officer, Chairman of ViiV Kate Knobil Chief Medical Officer Luke Miels President, Global Pharmaceuticals John Lepore R&D Pipeline Kevin Sin R&D Pharmaceuticals Business Development Emmanuel Hanon R&D Vaccines Kim Smith Global Research and Medical Strategy, ViiV Tony Wood Platform Tech & Science Pauline Williams Global Health Gijs van den Brink Immunoinflammation R&D

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3 long-term priorities for all 3 businesses

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Trust Performance Innovation

Culture

CER Sales growth in all 3 businesses; improved Group operating margin

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Consumer Healthcare +3% Vaccines +16% Pharmaceuticals +1% Shingrix reported sales of £167 million US vaccines sales +61% Meningitis sales -3% New Respiratory products +37%* HIV sales +11%; dolutegravir +18% Wellness sales +1%; Oral health sales +5%; Nutrition sales +1%; Skin sales +8% Group sales growth

• f +4%

80bp improvement in Group Adjusted

• perating margin

Adjusted EPS growth

• f +10%

FCF of £492 million

All growth rates and margin changes at CER. The definitions and reconciliations for non-IFRS measures are set out on page 39 of our Q2 2018 earnings release *New Respiratory includes the Ellipta portfolio and Nucala

2018 guidance upgraded

Respiratory: successfully transitioning to new portfolio

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Strong Trelegy launch reflects commercial prioritisation Nucala building momentum in a growing market New Respiratory products continue to perform

Increased investment in the market Strong uptake in Europe COLUMBA long term safety data presented at ATS; gaining traction with physicians Other indications offer upside potential: COPD, HES, NP 497 650

Q2 2017 Q2 2018

+37%*

Q2 Sales £m

COPD: chronic obstructive pulmonary disease; HES: hypereosinophilic syndrome; NP: nasal polyposis * All growth rates and margin changes at CER. New Respiratory includes the Ellipta portfolio and Nucala

Source: IQVIA NPA w/e 13 Jul 2018

Portfolio performance on track with GEMINI studies building confidence in 2DR outlook

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GEMINI studies demonstrate non-inferior virologic

• utcomes for DTG + 3TC vs DTG + TDF/FTC at

Week 48 Rates of virologic success were high regardless of baseline viral load No participant who experienced virologic failure developed treatment emergent resistance to NRTI or INSTI in either arm Drug related adverse events were low in both arms but favoured DTG+3TC Regulatory submissions planned before end 2018

Non inferior virologic outcomes and no emergent resistance seen Dolutegravir maintaining leadership position in STR/Core Agent market

TRx shares

Weekly TRx Shares by Product (STR+Core agent)

0% 5% 10% 15% 20% 25% 30%

Tivicay Triumeq DTG Total Juluca Competitor

28.0% 13.8%

(Tivicay)

13.4%

(Triumeq)

4.9% 0.8%

Building a new standard of prevention Demand significantly higher than 2017

Source: IQVIA NPA weekly TRx data

Shingrix: continued strong demand

1. IQVIA data, represents ~60% of the market 2. National Advisory Committee on Immunization (Canada): A Strong recommendation applies to most populations/individuals and should be followed unless a clear and compelling rationale for an alternative approach is present 3. Doses administered includes retail data from IQVIA reporting plus an estimate of non-Retail use (~60 / 40 split) as of 29 June 2018

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Recommendations driving market demand

99% of known US market share1 ‘Strong’ recommendation received in Canada during Q22 Q2 2018 sales of £167 million

Capacity strong and increasing

More than 3m doses administered3 in US since launch Supplies increased and accelerated to meet demand, with doses shipping on regular basis Capacity to vaccinate more patients in 2018 than the total vaccinated in 2017 Sales expectations for 2018 increased to £600-650m

• 20,000

40,000 60,000 80,000 100,000 120,000 140,000 160,000

Weekly Shingrix TRx volume vs 2017 competitor (weekly pharmacy administered doses)

Weekly Shingrix TRx's - Actual Weekly competitor TRx PY

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Driving our growth outlook beyond 2020

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Continuing growth drivers

Base business portfolio optimisation; limited exposure to patent expiries

2021-2026 2018-2020

Tivicay and Triumeq Nucala and Ellipta portfolio Bexsero and Menveo

Consumer Health power brands

‘091 (TLR4) ‘165 (aGM-CSF) ’254 (HIV MI) ‘404/’836 (HBV) ‘557 (PI3Kd) ‘595 (PRMT5 inhibitor) ‘609 (ICOS) ‘656 (leucyl tRNA) ‘672 (IBAT) ‘745 (TRPV4) ‘756 (CXCR2) ‘762 (BET inhibitor) ‘794 (NY ESO-1) ‘847 (IL33R) ‘863 (HIF-PHI) ‘944 (topoisomerase IV inhibitor) ‘998 (OX40) CAB PrEP (HIV) Benlysta+ rituximab (SLE) Shingrix Trelegy Juluca tafenoquine Nucala (COPD) DTG+3TC CAB+RPV Trelegy (asthma) ‘916 (BCMA) fostemsavir

Capital allocation framework

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Key priorities for capital Improved cash generation Trust Performance Innovation Shareholder returns

80p per share expected for 2018 Focus on rebuilding free cash flow cover over time Target 1.25x to 1.5x FCF cover before returning to dividend growth

M&A

Strict discipline on returns

Invest in the business

• 1. Pharma pipeline including BD
• 2. Consumer Put (buy out completed June 2018)
• 3. Vaccines capacity

Funding future growth

Delivering growth Improved

• perating leverage

Stronger cash generation Investing in

• ur business

Financial efficiencies

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