Emma Walmsley, CEO
Agenda Q2 2018 progress Emma Walmsley, (15 mins) Chief Executive Officer Q2 2018 financial results Simon Dingemans, (15 mins) Chief Financial Officer Q&A (30 mins) Break (15 mins) Dr Hal Barron R&D update Chief Scientific Officer and (60 mins) President R&D Q&A (60 mins) Informal reception 2
Q&A panel David Redfern Luke Miels Brian McNamara Luc Debruyne President – Global Chief Strategy Officer, President, Global CEO, GSK Consumer Chairman of ViiV Pharmaceuticals Healthcare Vaccines Axel Hoos Kim Smith Gijs van den Brink Emmanuel Hanon Oncology Therapy Global Research and Immunoinflammation R&D Vaccines Area Medical Strategy, ViiV R&D Kevin Sin John Lepore R&D Pharmaceuticals Kate Knobil Patrick Vallance R&D Pipeline Business Development Chief Medical Officer President R&D Tony Wood Pauline Williams Platform Tech & Global Health Science 3
3 long-term priorities for all 3 businesses Innovation Performance Trust Culture 4
CER Sales growth in all 3 businesses; improved Group operating margin Pharmaceuticals Group sales growth New Respiratory products +37%* +1% of +4% HIV sales +11%; dolutegravir +18% 80bp improvement in Group Adjusted operating margin Shingrix reported sales of £167 million Vaccines +16% Adjusted EPS growth US vaccines sales +61% of +10% Meningitis sales -3% FCF of £492 million Consumer Wellness sales +1%; Oral health sales +5%; Healthcare Nutrition sales +1%; Skin sales +8% 2018 guidance +3% upgraded 5 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
Respiratory: successfully transitioning to new portfolio Strong Trelegy launch reflects Nucala building momentum New Respiratory products commercial prioritisation in a growing market continue to perform Q2 Sales Increased investment £m in the market +37%* Strong uptake in Europe COLUMBA long term safety data 650 presented at ATS; gaining traction 497 with physicians Other indications offer Q2 2017 Q2 2018 upside potential: COPD, HES, NP 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 6
Portfolio performance on track with GEMINI studies building confidence in 2DR outlook Dolutegravir maintaining leadership position Non inferior virologic outcomes and in STR/Core Agent market no emergent resistance seen Weekly TRx Shares by Product (STR+Core agent) GEMINI studies demonstrate non-inferior virologic outcomes for DTG + 3TC vs DTG + TDF/FTC at 30% 28.0% Week 48 25% 20% Rates of virologic success were high regardless of 13.8% baseline viral load (Tivicay) 15% TRx shares 13.4% 10% (Triumeq) No participant who experienced virologic failure developed treatment emergent resistance to NRTI or 5% 4.9% INSTI in either arm 0.8% 0% Drug related adverse events were low in both arms but favoured DTG+3TC Regulatory submissions planned before end 2018 Tivicay Triumeq DTG Total Juluca Competitor Source: IQVIA NPA w/e 13 Jul 2018 7
Shingrix: continued strong demand Demand significantly higher than 2017 Building a new standard of prevention Recommendations driving market demand Weekly Shingrix TRx volume vs 2017 competitor (weekly pharmacy administered doses) 99% of known US market share 1 160,000 ‘Strong’ recommendation received in Canada during Q2 2 140,000 120,000 Q2 2018 sales of £167 million 100,000 80,000 Capacity strong and increasing 60,000 More than 3m doses administered 3 in US since launch 40,000 Supplies increased and accelerated to meet demand, 20,000 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 Weekly Shingrix TRx's - Actual Weekly competitor TRx PY Source: IQVIA NPA weekly TRx data 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 8 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
Driving our growth outlook beyond 2020 2021-2026 – 44 ‘091 (TLR4) ‘756 (CXCR2) 2018-2020 ‘165 ( aGM-CSF) ‘762 (BET inhibitor) ’254 (HIV MI) ‘794 (NY ESO -1) Continuing ‘404/’836 (HBV) ‘847 (IL33R) ‘557 (PI3K d ) ‘863 (HIF -PHI) growth drivers Shingrix ‘595 (PRMT5 inhibitor) ‘944 (topoisomerase Trelegy ‘609 (ICOS) IV inhibitor) Juluca ‘656 (leucyl tRNA) ‘998 (OX40) tafenoquine ‘672 (IBAT) CAB PrEP (HIV) Tivicay and Triumeq Nucala (COPD) ‘745 (TRPV4) Benlysta+ Nucala and Ellipta portfolio DTG+3TC rituximab (SLE) Bexsero and Menveo CAB+RPV Trelegy (asthma) ‘916 (BCMA) fostemsavir Base business portfolio optimisation; limited exposure to patent expiries Consumer Health power brands 9
Capital allocation framework Key priorities for capital Invest 1. Pharma pipeline including BD Innovation in the 2. Consumer Put (buy out completed June 2018) business 3. Vaccines capacity Improved 80p per share expected for 2018 Shareholder Performance cash Focus on rebuilding free cash flow cover over time returns Target 1.25x to 1.5x FCF cover before generation returning to dividend growth Trust M&A Strict discipline on returns 10
Funding future growth Delivering growth Investing in Improved our business operating leverage Stronger Financial cash generation efficiencies 11
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