GSK Q1 2024 Earnings Call Transcript

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Provided by Quartr
May 1, 2024

Key Takeaways

  • GSK delivered a strong Q1 performance with core sales up 13% to £7.4 billion, core operating profit up 35% to £2.4 billion and core EPS up 37%, excluding COVID-19 solutions, prompting an upgrade to full-year guidance.
  • The pipeline advanced with Phase III readouts for gepotidossine (new antibiotic), ultra-long-acting cabotegravir for HIV, Gemperli in endometrial cancer and BLENREP in multiple myeloma, alongside key regulatory submissions and an ASCO presentation.
  • Vaccines drove 22% growth, led by Orexvi and Shingrix, an exceptional RSV vaccine launch with over 1.3 million retail doses administered, and the regulatory filing of a novel 5-in-1 meningococcal candidate.
  • Specialty medicines grew 19% on strong Nucala (+13%) and Benlysta (+8%) performance, while oncology brands AJARA, Gemperli and Zejula more than doubled sales, supporting an IL-5 portfolio targeting over £4 billion peak sales.
  • Operational leverage and cost control drove a 580 bps margin expansion, free cash flow turned positive at £289 million, net debt remained stable at £15 billion, and 95% of ESG metrics are on track or exceeded.
AI Generated. May Contain Errors.
Earnings Conference Call
GSK Q1 2024
00:00 / 00:00

There are 21 speakers on the call.

Operator

Hello, everyone.

Speaker 1

Welcome to today's call and webcast. The presentation was sent to our distribution list by email and you can find it on gsk.com. Please turn to Slide 2. This is the usual Safe Harbor statement. We will comment on our performance using constant exchange rate or CR unless stated otherwise.

Speaker 1

As a reminder, adjusted results are now referred to as core like many European pharmaceutical peers. Please turn to Slide 3. Today's call will last approximately 1 hour with the presentation taking around 25 minutes and the remaining time for your questions. Today, our speakers are Emma Walmsley, Luke Myles, Deborah Waterhouse and Julie Brown, with Tony Ward and David Redfern joining for Q and A. Please ask 1 to 2 questions so that everyone has the chance to participate.

Speaker 1

Turning to Slide 4, I will now hand the call over to Emma.

Speaker 2

Thanks, Nick, and welcome to everybody joining us today. I'm delighted to be presenting to you all with another set of excellent quarterly results for GSK. Please turn to the next slide. We have had a very strong start to the year. Sales and profits grew double digits for the quarter, with sales up 13 percent to £7,400,000,000 core operating profit up 35 percent to £2,400,000,000 and core earnings per share up 37 percent to 43.1p all excluding COVID solutions.

Speaker 2

This excellent performance reflects our continued focus on execution, some benefit from phasing in the quarter and strong delivery of our recent launches. It also demonstrates the great momentum we continue to see across the business. Demand for our innovative vaccines and specialty medicines was clear, with strong growth across new products. Our very good sales performance was also underpinned by good cost control. Julie will take you through the details on this in a moment, but I particularly want to highlight our SG and A performance, which was delivered alongside increasing investment in R and D, demonstrating continued delivery of effective operating leverage and margin improvement.

Speaker 2

These benefits are also delivering improved cash flow, providing funds for investment and returns to shareholders. Our dividend for the quarter was GBP 0.15. And for the full year, we are upgrading our guidance and looking forward to delivering another year of meaningful growth for shareholders. Next slide, please. Alongside our excellent financial performance, we've seen strong pipeline progress across the therapy areas with Phase III data readouts for 4 medicines.

Speaker 2

For gepotidosine, further pivotal data that supports regulatory submission of this new antibiotic. For Cabanueva, further evidence of superior efficacy. For Gemperley, potential broader use of this medicine to treat endometrial cancer and lastly, encouraging clinical data supporting use of BLENREP for the treatment of multiple myeloma. These data will be presented at ASCO, and we

Speaker 3

look forward to sharing more

Speaker 2

with you on our plans for oncology at our Meet the Management event in June. These readouts, together with other R and D achievements this quarter, mean we've strengthened growth prospects in all of our key therapeutic areas. Three material points I'd highlight. First, we continue to strengthen our innovative vaccine portfolio this quarter. With regulatory submission of our new 5 in-one meningococcal vaccine candidate, alongside new expansion opportunities for both Orexvi in the U.

Speaker 2

S. And Shingrix in China second, positive clinical trial findings for an ultra long acting formulation of cabotegravir, further supporting progression of this medicine and confidence in the important transition we expect in our HIV portfolio for long term growth. And 3rd, in respiratory, we completed the acquisition of IOLOS Bio, a signal of our continued investment and leadership in this disease area where our next important step will be sharing data for depimokimab, which we expect in Q2. Next slide, please. Alongside delivering stronger shareholder returns, we continue to build trust by delivering across the 6 key areas we prioritize for ESG.

Speaker 2

This quarter, we published our ESG performance report. 95% of the metrics we target are being met or exceeded. We also saw the GSK developed TB vaccine candidate enter Phase III, sponsored by the Gates MRI and Welcome Foundation. This could potentially be the first new TB vaccine in over 100 years. So all in, a very good start to the year.

Speaker 2

Let's now hear more from the team on our progress, starting with Luke.

Speaker 4

Thanks, Emma. Please turn to the next slide. In Q1, we delivered growth across all our product areas and regions with 7,400,000,000 of sales, up 13% versus last year, excluding COVID solutions. This includes a strong performance in the U. S, led by continued contributions from our new launch products.

Speaker 4

Please turn to Slide 10. In vaccines, we saw strong growth of 22% in Q1, excluding COVID solutions, led by Orexpi and Shingrix. Following the outstanding launch last year, Orexpi continued to deliver with sales of £182,000,000 in the quarter. Script data shows a strong preference for Orexpi as we received 2 out of every 3 retail prescriptions with U. S.

Speaker 4

Market penetration of around 14%. I'll cover Orexvy in more detail on the next slide. Shingrix delivered a record of £945,000,000 in the quarter and was up 18%, driven by public funding outside the U. S. Together with early supply to our new partner, Jifai in China.

Speaker 4

Outside the U. S, Shingrix has launched in 39 markets and the majority have less than 5% penetration. In the U. S, sales decreased by 4%, reflecting the comparison to Q1 'twenty three, which benefited from the removal of the co pay for adults aged 65 and over on Medicare, as well as the prioritization of other adult vaccines during the viral respiratory season. We are investing in DTC and ACP campaigns as we seek to activate harder to reach consumers to continue to grow the cumulative immunization rate now at 37% of people aged 50 and older, which leaves more than 75,000,000 Americans still unvaccinated and eligible to receive Shingrix.

Speaker 4

Our expectation continues to be the Shingrix sales will reach more than £4,000,000,000 over time, driven by growth outside the U. S. In addition, we have also recently shared exceptional data demonstrating vaccine efficacy of 82% at year 11. Turning to our meningitis portfolio, Bexsera and menvo sales were up 3% 41%, respectively, in the quarter with performance in Brazil and favorable phasing driving the growth in MINVEYO. We're pleased to have received FDA file acceptance for our men ABC WY vaccine in mid April and combined our meningitis portfolio is expected to deliver around £2,000,000,000 in peak year sales.

Speaker 4

Across our vaccines portfolio, we expect sales to increase high single to low double digit percent in 2024. Next slide, please. Focusing on RSV, we vaccinated over 1,300,000 people with RavexV in the retail setting during Q1. The launch was exceptional and exceeded our expectations. We now see seasonality similar to flu impacting use patterns in the 1st year.

Speaker 4

In 2024, we expect the vast majority of sales to be in the U. S. And weighted to the second half in preparation for the 2024, 2025 RSV season. This year, we continue to build on our competitive profile with the potential to expand the label, adding at risk individuals in the 50 to 59 cohort, which could impact approximately 15,000,000 people in the U. S.

Speaker 4

This is subject to approval followed by ACIP review in June. Last year, we presented data supporting an efficacy profile for Orexvi of at least 2 seasons. As the 'twenty three, 'twenty four RSV season is coming to an end, later this year, we expect to have additional efficacy data on long term duration of protection and immunogenicity data over 3 years. We plan to present the totality of data at a future public health forum in the second half of this year and we do not expect public health officials to decide on the frequency of RSV vaccination or revaccination before 2025. We're ambitious about growth in an expanding market with increasing competition, whether a 2 season or a 3 season vaccine profile, we remain very confident that Orexi can achieve more than $3,000,000,000 in peak year sales over time.

Speaker 4

Next slide, please. In specialty medicines, including HIV, which Deborah will cover shortly, we increased sales by 19%, excluding COVID solutions. In respiratory and immunology, our market leading medicines, Nucala and Benlysta continue to deliver good growth. Nucala was up 13%, reflecting high patient demand for treatments addressing severe eosinophilic asthma, chronic rhinosinusitis with nasal polyps and eGPA. Our Matin A trial to confirm efficacy of Nucala in COPD is expected to read out in the second half of this year.

Speaker 4

We also expect pivotal trial results for our 6 monthly IL-five deptamocumab this year with readouts in asthma in Q2 and chronic rhinosinusitis with nasal polyps before year end. Combined, we anticipate our IL-five portfolio to deliver more than £4,000,000,000 in peak year sales. Benlysta continues to show consistent growth and was up 8% in the quarter with opportunities to drive earlier intervention and increased penetration in both SLE and lupus nephritis. In oncology, sales more than doubled in the quarter. Agyara has continued to perform well following last year's launch, and I'll talk more about this on the next slide.

Speaker 4

We are pleased to receive authorization the European Commission for Amjara in late January and we have since launched in the U. K. And Germany. Gemperli has also continued to grow strongly. And again, I'll discuss this further on the next slide.

Speaker 4

Zejula's performance was driven by increased patient demand and higher volumes due to the new tablet formulation with further growth from new international launches. Overall, we expect strong performance for our specialty medicines in 2024 with growth of low double digit percent. Please turn to Slide 13. Ojara, which we acquired from Sierra Oncology, has performed exceptionally well following last year's launch and has the strongest uptake curve for a JAK inhibitor in myelofibrosis. Ajaro is establishing market share in both the first line and second line settings, and we've seen encouraging data suggesting physicians are anticipating increasing their use of AJARA in the coming months.

Speaker 4

For Gemperli, we've demonstrated strong execution in the quarter with our new patient share up 33%, and we continue to build further clinical evidence in endometrial cancer, where we recently presented data demonstrating that Gemperli plus chemotherapy is the only IO combination to show statistically significant and clinically meaningful OS data in the all comers population. Subsequently, the FDA has granted a priority review to our file to expand the treatment with Genpyrli to all adult patients with primary advanced or recurrent endometrial cancer. We also expect this data to be published soon in a peer reviewed journal. On BLENREP, we're encouraged by the data from DREAMM-seven, which showed a tripling of progression free survival. DREAMM-eight also met its primary endpoint and showed a statistically significant and clinically meaningful PFS compared to standard of care in second line multiple myeloma.

Speaker 4

In addition, DREAMM-seven and DREAMM-eight also demonstrated strong overall survival trends, and we will continue to follow-up to completion. We look forward to presenting these data at ASCO in June and are targeting regulatory filings in the second half of the year. Next slide, please. Finally, turning to our general medicines portfolio, sales grew 1% in the quarter, led by Trelegy delivering £591,000,000 and established products in emerging markets. We've also seen growth owing to stockpiling and patient demand, and it's still early in the year and we are continuing to assess and manage the impact of the AMCA approval in the U.

Speaker 4

S. And as a reminder, there was US150 $1,000,000 impact in 2023, and we continue to expect up to USD 550,000,000 of sales at risk for the full year. The growth outlook for GenMeds is unchanged. I'll now hand over to Deborah to cover HIV.

Speaker 5

Thank you, Luke. We continue to drive HIV market transformation and are pleased to see our growth momentum continuing with HIV sales growing 14% to £1,600,000,000 in the Q1. This is driven mainly by increased patient demand for our oral 2 drug and long acting injectable regimens and represents an increase of more than 2 percentage points in global market share versus Q1 2023. This continued strong performance demonstrates our leadership in transforming the HIV marketplace and delivering on individual patient needs. Looking across our portfolio, Dovato, our leading oral 2 drug regimen and number 1 selling HIV medicine, grew sales by 27% versus q1 2023.

Speaker 5

Our long acting portfolio is also showing strong momentum with Cabanueva growing 73% and Apretude growing over 100%. With more than 60,000 patients benefiting from these medicines, our ongoing growth is underpinned by strong patient demand and excellent operational execution. We believe that long acting options have the potential to change the trajectory of the HIV epidemic and as the leaders in driving this market shift, it is positive to see this portfolio growing more than 80% versus Q1 2023 and contributing 17% of total portfolio sales. In absolute terms, this resulted in £116,000,000 of growth, representing more than 50% of the total HIV CER growth. Overall, Q1 has been a very strong quarter and puts us firmly on track to deliver a growth rate of high single to low double digits in 2024.

Speaker 5

We were also pleased by the positive reaction from the scientific and medical community to the comprehensive set of early phase, as well as phase 3b4 and real world evidence data that was presented at Croix in March, demonstrating confidence in our current portfolio and progress towards our pipeline of ultra long acting regimens. HIV physicians and healthcare providers reinforce to us time and time again that the long acting regimens which they have in their hands today are really transforming the lives of people living with HIV, liberating people from the daily burden of oral therapy, improving adherence and tackling stigma, which remains stubbornly pervasive. Data from over 11,000 patients participating in long acting clinical and real world evidence trials clearly demonstrates the effectiveness of our long acting treatment regimen. We were particularly pleased with the interim data from the LATETRUDE study indicating that Cabanueva has superior efficacy compared to daily oral therapy in individuals living with HIV who have adherence challenges. We also presented positive phase 1 data from a study of cabotegravir, ultra long acting, dosed at intervals of at least every 4 months, and positive phase 2a data from the BANNER study, exploring the use of our novel, broadly neutralizing antibody, N6LS, for the treatment of people living with HIV.

Speaker 5

These data show continued progress towards our ambition to end the HIV epidemic, delivering our ultra long acting pipeline with cabotegravir replacing dolutegravir as our foundational medicine. We remain on track to offer 4 monthly dosing options for prevention in 2026 and treatment in 2027, as well as extending the dosing interval of our long acting regimens in treatment and prevention to enable every 6 month dosing towards the end of the decade. At our September 2023 Meet the Management event, we committed to delivering around 40% of our revenue from long acting medicines by 2027, and our current performance puts us on the right trajectory to achieve that goal. We are therefore confident in our ability to navigate through the revenue impact associated with the loss of exclusivity of dolutegravir. With that, I will hand to Julie.

Speaker 6

Thank you, Deborah, and good morning, everyone. As a reminder, to align with European Pharmaceutical peers, we've changed our naming convention so I will be referring to core instead of adjusted results. Next slide, please. Starting with the income statement with growth rates stated at constant exchange rates. Sales increased 13%, excluding COVID Solutions, and were up 10% overall, reflecting continued strong business performance.

Speaker 6

As Luc mentioned, growth benefited from newly launched products, Arexy, Ajarra and Gemperly, along with earlier than expected Shingrix sales to our partner, Jufei, in China. Together, these added 5 percentage points of growth in Q1. Core operating profit grew 35%, excluding COVID, and 27% overall. And the margin increased to 30 3.2% with leverage from gross margin and SG and A. Cost of goods benefited from mix effects, including growth of higher margin RxV, Shingrix and Specialty Care products.

Speaker 6

We expect to deliver gross margin leverage in the full year with benefits predominantly in the first half given anticipated sales phasing and mix dynamics. At the full year, we discussed our focus on delivering improved operational leverage as we seek to benefit from the investment made over recent years. Against this backdrop, we're pleased 2024 has started well with underlying low single digit percentage SG and A growth. This, together with a one off benefit from the successful Gejula royalty dispute, caused SG and A spend to increase in the quarter by 2%. R and D investment continued to grow broadly in line with sales as expected, mainly within our Vaccines, Respiratory and Infectious Diseases late stage portfolios.

Speaker 6

Core earnings per share grew 37%, excluding COVID Solutions. Now turning to the total results. Operating profit decreased 18 percent to GBP 1,500,000,000 primarily reflecting a charge arising from the remeasurement of Vive CCL and Pfizer put option, largely resulting from improved longer term prospects in our HIV business and currency. Overall, currency was adverse in the quarter due to the strengthening of sterling against the U. S.

Speaker 6

Dollar and emerging market currencies. Next slide, please. Moving to the core operating profit margin. On this slide, we have shared, including and excluding COVID, to provide a review of our margin dynamics. Excluding COVID, the margin improvement was significant at 580 basis points CER due to two main reasons.

Speaker 6

1st, underlying margin benefits contributed 4 10 basis points, driven largely by sales growth, favorable product mix and SG and A leverage, partly offset by the impact from the loss of Gardasil royalties. And secondly, the Zejula royalty dispute contributed 170 basis points of margin improvement in the quarter. Including COVID Solutions, there was a 460 basis point improvement driven by similar factors. Next slide, please. Cash generated from operations was GBP 1,100,000,000 representing an improvement of GBP 0.8 billion over Q1 last year.

Speaker 6

This was driven by core operating profit and favorable working capital, with the latter benefiting from higher receivable collections, particularly in the U. S. Vaccines business. Free cash flow was GBP 289,000,000 in the quarter relative to an outflow last year and therefore improving year on year by £978,000,000 Next slide, please. Slide 20 shares our net debt position since the 31st December last year and how we've actively deployed capital in the business in line with our framework.

Speaker 6

Net debt was broadly stable compared to the end of 2023 at €15,000,000,000 This included further monetization of our stake in Halion and the completion of the acquisition of Aeolus Bio in the quarter. With our end 2023 net debt to core EBITDA ratio of 1.5 times and expected cash generation, we have a strong balance sheet to support continued investment in future growth, including through BD, as we look to deploy funds to enhance growth and deliver attractive shareholder returns. Now with that, I'll turn to our full year expectations. Next slide, please. Turning to guidance.

Speaker 6

There is no change to our sales range of 5% to 7%, but we're increasingly confident of the full year being towards the upper part of the range. We are upgrading our operating profit guidance to 9% to 11%, reflecting the strong start to the year and benefits from the Zejula patent dispute in the Q1. We also expect royalty income to be slightly higher between £550,000,000 £600,000,000 in 2024. These benefits also flow through to our earnings per share, now upgraded to 8% to 10% for the year. I also wanted to give some color on anticipated phasing throughout the year, starting with sales.

Speaker 6

Continued execution of the successful launches of Oraxvi Ajara and Gemperley lifecycle innovation have contributed 5 percentage points of growth in Q1 and will continue to benefit Q2. However, we will annualize their launches, including the initial channel inventory build in our XV in the second half. This year is also the start of our agreement with Xifei for Shingrix in China. As Luc said, we had earlier than expected sales in Q1, but still expect the majority of 2024 Shingrix sales to be in Q2. Taking these factors together, we therefore expect sales growth will be significantly higher in half 1 relative to half 2.

Speaker 6

And turning to the operating profit dynamics. We continue to expect SG and A to increase in the low single digit percentage range and for R and D to increase broadly in line with sales for the year. As a result, driven by the sales phasing, operating profit growth will also be significantly higher in half 1 given the operating leverage. In summary, whilst it is still early in the year, we've made an excellent start to 2024 and are confident in delivering the full year guidance and longer term outlook. Turning to Slide 22.

Speaker 6

Lastly, our IR roadmap, which shares our progress towards major milestones and value unlock opportunities. It's clear that we've had a very positive start to the year with a number of important pipeline events delivered, as Emma mentioned. The main milestones expected in the next 2 months are the U. S. FDA approval of Orex v in adults aged 50 to 59, the Phase III data readout of depimocumab in severe asthma with an eosinophilic phenotype and the presentation of BLENREP data at ASCO in June.

Speaker 6

Turning to R and D milestones. Many of the successes since Q4 have been within Oncology, and we look forward to our Meet the Management event in June to share a deeper review with you. I will now hand back to Emma to conclude.

Speaker 2

Thanks, Julie. So to summarize, GSK continues to deliver on its commitments and perform to a new standard. Our excellent performance in Q1 provides us with clear momentum. We're pleased to be upgrading guidance and expect to deliver another year of meaningful growth in sales and earnings in 2024 as we continue to focus on prevention and changing the course of disease for millions of people. This all bodes well, but it's still early in the year, and we remain very focused on delivering on our commitments and more at a continued pace for patients, for shareholders and for our people, combining science, technology and talent to get ahead of disease together.

Speaker 2

With that, I'll now open up the call for the Q and A with the team.

Operator

Thanks, Emmet. We're going to

Speaker 1

take our first question from Mark Purcell at Morgan Stanley. So Mark, over to you, please.

Speaker 3

Hi, Mark.

Speaker 7

Yes. Good morning. Good afternoon, everyone. Thanks for taking my questions, Nick. So two questions.

Speaker 7

On Shingrix, could you help us understand the contribution you we might expect from Ziffo in full year 'twenty four? And then going back to your point of ex U. S. Penetration being less than 5% versus 37% in the U. S, could you sort of like help us understand if there are any leading indicator countries which we could think about in terms of the broader ex U.

Speaker 7

S. Penetration increasing or other vaccines that could be proxies for how high the ex U. S. Penetration could go? And then the second one on the CARLOS COPD.

Speaker 7

There's been some discussion around Dupixent and a potential delay to PDUFA as Sanofi trades label breadth for time into the market. So could you help us understand the breadth of the Matinay trial in terms of the patient population you're addressing? I think you've got broncholitic and emphysemic patients in there, and it's a broad EOS phenotype as well. So it'd be helpful to understand the relative breadth of your label and target population.

Speaker 3

Great. Thanks, Mark. So we'll come first to Luke on the prospects of GEA expansion on Chymrix and then we'll come Tony to you.

Speaker 8

Yes, sure Mark. So I'm pleased to say it's following very much in line with the strategy that we've been outlining over the last few years. So with the contract with Giffey, we have it's around £400,000,000 with the contract. As we've said before, we are somewhat limited with supply into China this year. So 400 is the number that you should use and then 800 next year and then 1.2.

Speaker 8

The intent of course is to run that relationship significantly beyond the initial 3 years. Encouraging start, we're now in the field as of April with Ziff A and the points of vaccination expansion is very encouraging. So good news there. In terms of analogs, look, I think, there's in markets like Europe and Japan, it's very much about reimbursement penetration. So I think the UK is a good analog, Spain, Italy, these are good analogs and we're very much at the start of the process in those markets with single digit penetration overall.

Speaker 8

In terms of emerging markets, I think you've got a range of markets. I think Saudi is quite interested in terms of government support for tenders and things like that. We've been very strict on pricing, so that's encouraging. And then out of pocket markets like Brazil, and again, we're in single digit percentage penetration here. So very early days in those markets at a very tight price corridor.

Operator

Hi, Mark. So in COPD, nucalumatinase is the study you referred to. It's ongoing and we expect it to read out at the end of the year. To get to your questions, it's a broader population. We've included emphysema as well as chronic bronchitis phenotypes.

Operator

That's important because of the 500,000,000 individuals with COPD, about 30% of them present with an emphysema phenotype. We're also excluding any current or prior diagnosis of asthma. That was important given the nature of the CRL for the previous studies. I think it's worthwhile just pointing you to the data that we disclosed at ATS, which was a post hoc analysis of those previous studies showing that in that broader population, we see a 24% reduction in exacerbations. It's also important to stress that this is a 2 year data set in an area in which quality of life is also important over and above headline reduction of exacerbations.

Speaker 1

We'll take our next question from Kerry Halford at Berenberg. Kerry, over to you, please.

Speaker 9

Hi there. Thank you for taking my questions. On a REX fee, just thinking about underlying demand into the next winter season, when does the contracting process start for the upcoming season? Is that something you're already engaged in? And how might the arrival of a third competitor in Moderna impact that process, the competitive landscape?

Speaker 9

And then just a quick follow-up on Shingrix. Can you quantify the exact amount that was booked in Q1 relating to the Zifei agreement in China? Thank you.

Speaker 3

Thanks. Well, Luke, I'll come to you on that, please.

Speaker 8

Yes, sure. So I mean, underlying demand for Eurexie, we remain very confident. I mean, if you look at all the market research, whether that's consumer patient awareness, which is around 86%. If you then look at measures of physician and pharmacy confidence to knowledge and confidence to discuss RSV with patients and potential people for vaccination, it's extremely high. It's in the 90s and high 80s and that continues to be there.

Speaker 8

So there's confidence and insight there behind that. In terms of the so I think that will ultimately be translated because there's an ideal obviously synergy with the flu season that we can take advantage. Our overall intent by the time as we've done with Shingrix is to deseasonalize that to manage pharmacy workflow. But yes, good signs there. And of course, if you look at Q1 demand that was pretty much the same when you look at in arm shops as we saw in Q3 of 2023.

Speaker 8

So good sign. In terms of contracting, everyone is very busily doing that. But I don't think anything will be ultimately consolidated until we see the June ACIP outcome which is linked to the other part of your question which is the presence of Moderna and the impact there. So, if you can imagine you're a pharmacy chain, you want to see whether at A, is there going to be 2 or 3 vaccines? Does anything come up in terms of subgroups, for example, us with 5059, further discussion on, GBS and other topics?

Speaker 8

And also, again, what's the interpretation of the data that Moderna has. So all these are moving parts. Once we get through that, then I think there'll be a race to a lockdown in contracts as we go into the season there. In terms of Jifei split with Q1, we don't break that out for China. But the main thing to remember is if you think about phasing just via modeling, Q1 is where we get orders.

Speaker 8

There's nothing in Q2, very limited as we ship. And then Q3, you'll see a bolus and then very little in Q4. Sorry, it's Q3, nothing in Q3 and a lot in Q4.

Speaker 3

Yes. And just so RSV, I don't think we're going to see much in Q2. That would be an important point to make because it has stayed seasonal in its 1st year although absolutely we'd love to move that over time as we've done very successfully in Shingrix too. Okay, thanks, Luke. Next question, please.

Speaker 3

Next question

Operator

will now come to Graeme Parry, Bank of America. Graeme, over

Speaker 8

to you. Great. Thanks for taking

Speaker 10

the questions. So firstly on Shingrix, if you can just help us understand U. S. Dynamics. So obviously, scripts were down.

Speaker 10

I know if you could just help us understand what was going on in the nonretail segment there. Is that stabilized or even growing again now? And on your peak sales guide there, I think it's still just €4,000,000,000 by 2026. It looks like you have a fighting chance of getting there this year, certainly 25,000,000. So just any thoughts on if and when you might update on that?

Speaker 10

Do you need to see your supply issues in China sorted to get more confidence in ZIF A growth above the contracted volumes? And then on Orexi, could you help us understand where the total penetration rates that you see are now between yourselves and Pfizer in the comorbid and the over-80s population where risk is greater? So as you go into the new season, how many of these people have actually already had a vaccine? And are you going to sort of, I guess, a more difficult to reach population now?

Speaker 3

Okay. With those, I'll go back to Luke again. I would just say, Graham, that we're not going to update our peak year sales forecast for Shingrix. It's more than 4 over time. Obviously, we just had another record quarter, which is great and really excited about what's coming for Jiffey.

Speaker 3

But we've as Luke said, we're contracted for 2.5% over the next few years and we're hoping to be more ambitious for that. But Luke, do you want to comment specifically

Speaker 11

on the Shingrix?

Speaker 8

Sure. And Graham, on the supply of China, it's a 2024 effect. There was a slight tweak in the process that the Chinese regulator required. We've done that. And then now we're shipping.

Speaker 8

So that's the key thing. We're uncapped in 2025 and 26 and hopefully beyond. Okay. So there's some structural things that have occurred here. So the main element as I said in the earlier part of the call was the Q1, 2023 you saw a bolus of people who were waiting for the co pay to be removed.

Speaker 8

And so that was our highest retail TRX order with Shingrix. So it's a tough comparator for the TRX retail. Now your question was obviously about non retail. I mean, if you look at the trends, last year, we averaged about 1.3, 1.4 a quarter in armed shots with Shingrix whereas in quarter 1 was about 1. And what is happening is because the administration costs and the paperwork around the co pay, we're just seeing the structural shift of physicians just saying to the patient, look, it's a lot easier if you just go next door to the pharmacy and get your shot there.

Speaker 8

And so that shift has happened. We have actually recovered some ground in terms of growth, in terms of penetration in the centers beyond the 2 core ones, the 3 core ones we had, but we are pushing against this tide, which is just much easier for everyone if they go next door. Now, the challenges when they go next door in quarter 1, pharmacists are very clear in terms of the market research, their priority is flu RSV, so a little bit of a victim of our own success there and COVID. In quarter 2, we expect that obviously as we move to the summer months, they're all signaling very strongly that they expect to move Shingrix up. We've actually seen that in terms of stocking levels in pharmacies.

Speaker 8

Wholesaler levels are stable, but we've seen the pharmacist start to build the stock up. So when we see that, there's clearly an expectation of a shift to start vaccinating those patients there. So that's encouraging. I think I've covered everything.

Speaker 3

Yes. Anything you want to say on the Oraxia penetration?

Speaker 8

Yes. Yes, sorry. I mean, I think our strategy has been very clear, which has been to concentrate on the comorbid individuals and we have outstanding market research there showing the intent of pharmacists and doctors to discuss this with patients and vaccinate them. And when you look at the number one reason someone recommends Orexvy, it's efficacy in these populations. But we're very much in the early days.

Speaker 8

But that initial penetration, the bulk of that is those high risk informed individuals that have gone in there. I don't have the exact percentages in front of me, but, yes, it's about 80% of those people are comorbid older individuals. So there's 65 plus where there's a lot less than that 60 plus. And of course, if we can get the 50 to 59 comorbid, that's a nice growth opportunity for us because they're just as aware of their risk as is their physician with these polycomor individuals.

Speaker 3

And that's another 15,000,000 American in the at risk home mortgage from AUD50 to AUD59, which is an exciting prospect. Okay. Next question, please.

Speaker 1

We're going to come to UBS and Jo Walton. So Jo, over to you,

Speaker 3

please.

Speaker 12

Three quick ones, please, or 2 related. Just can you tell us a little bit more about AMPCAP? Trilogy did extremely well. Can you confirm that there's no bleed across in terms of rebates, etcetera, that is going to impact that and that is continued? I wonder if you could also just talk about Zantac litigation.

Speaker 12

You we've now had one case that has gone to trials, where you have previously been settling and you haven't settled that one. And we now see lots of potential cases and a Sargon set of cases coming out in California. Just wondering if there's any time frame or any updates as to when you might be able to resolve this situation.

Speaker 3

Okay. Well, look, I'll turn to Luke in a second on AMP cap and rebates off the back of another quarter of absolutely fantastic dynamics for TRELEGY. But let me make some comments on Zantac for everybody on the call. I mean, first of all, we remain very confident in our position and continue to defend the science and the facts very vigorously. Obviously, you know that since 2019 there have been 16 independent studies that have been categoric in showing no causal link between Ranitidine and cancer and extensive reviews with the FDA and the EMA as well.

Speaker 3

Now obviously, Joe and others, you would not expect me to comment on the specifics of our legal strategy and especially with ongoing and current cases. But I do want to also emphasize and remind everyone that the upcoming Daubert hearing is purely a question of admissibility of evidence. Absolutely nothing whatsoever to do with any judgment on liability. And we are very focused on, as I say, defending our position vigorously. And in the meantime, this team and the whole organization is really all about delivering on our operating performance, our momentum for growth and continuing to invest for growth as well in line with our capital allocation priorities.

Speaker 3

So that's as much comment as I'm going to make on Zantac today. Luke,

Speaker 6

would you like to come back

Speaker 3

to Ampek and Yes.

Speaker 8

Thanks so much. John, I mean, Trelegy is really quite separate from AMT Cap. I mean, the drivers there are the momentum around the gold guideline changes, commercial execution. We have a very strong team in the U. S, very simple messaging there.

Speaker 8

I mean, we have around 64 percent of those patients who are on triple therapy with COPD and about 67 with asthma in the U. S. So very strong penetration there and you've still got a sizable proportion of individuals who are not responding to treatment. So between 40% 60% of patients still exacerbate depending on which numbers you look at, which is good for TRELEGY and could be very good for Nucala and depamocumab long term. In terms of AMCAP, the numbers that we've given in the past are still the same.

Speaker 8

We had 150 effect at the end of 2023. If you look at broader exposure for the rest of 2024, it's still around $550,000,000 I mean, I think to be fair, we did better than we're expecting in quarter 1. Some of the strategies that we had commercially did exceed our own expectations, which is always nice, prefer that than the other way around. But that there will be a counter move to those. And so I don't think we're going to see the full effect until we're talking at the half year results for the total AMT CapExposure.

Speaker 8

And then just back on the China question, Nick just told me, it's about 20% for Shingrix sales will be in Q1 and then 60% to 80% in HARP 1 for your own phasing of that $400,000,000

Speaker 3

Next question, please. Okay.

Speaker 1

Can we take

Operator

our next question from Steve Scala. So Steve, over to you.

Speaker 13

Thank you very much. Two questions. GSK has had a strong run of under promising and over delivering and for that it deserves tremendous credit. But why shouldn't we think about the statement that H1 will be stronger as H2 as more a messaging strategy, not a true reflection of fundamentals and just assume that H2 will be much stronger than GSK states. I've heard everything you've said about the business, but the business has great momentum.

Speaker 13

The total turnover comps don't support your statements. So I guess in the end, the question is why are you so pessimistic about your own business in H2? The second question is why is GSK developing an H5N1 pandemic flu mRNA vaccine? Is this a just in case or are you hearing of significant concern from health and government authorities? Thank you very much.

Speaker 3

Thanks, Steve. Well, I'll come to Tony on your second question. On your first one, just a requote leap, I'd rather it that way around. But listen, we are absolutely and I'm going to ask Julie actually to comment and reiterate the thinking on phasing. I just want to remind everyone we're at Q1.

Speaker 3

We're absolutely delighted with the start to the year and really pleased in terms of the progress, both the growth of vaccines and specialty, but also, as Mougues just said, delivery in Gen Meds as well. And obviously, we intend to keep you updated through the year. There are some very real comparison questions, but make no mistake, the whole of this team and all the people that support these teams are very focused on maximizing delivery that we can, whether it's this year or way beyond that. But Julie, do you want to add any more points on

Speaker 6

the guidance? Thank you, and thanks for the comment. I think the main thing is that we definitely know we've got a benefit with phasing in the first half. As we mentioned, we are going to life cycle life cycle indications. So that is definitely a factor.

Speaker 6

Those alone added 5 percentage points of growth in our Q1, just to give you the sense of the numbers. As Luke mentioned secondly, we've got Jifei in China, fishing bricks, which is going to be first half loaded. We're expecting around 60% to 80%. And therefore, that also skews the phasing. And then I think the final thing to say is there are 2 factors we're very conscious of.

Speaker 6

1 is AMCA. I think Luke gave a good feel about the AMCA dynamics, And we're waiting to see how that pans out in the Q2. And then obviously, we're entering the main vaccine season. And we have got we believe we've got an expanding market, sure. And as Emma mentioned, we're going

Speaker 3

to go all out to win.

Speaker 6

But we've also got a 3rd competitor in the ring that we've got to be conscious of. So that's why we've guided the way we have. Thank you.

Operator

And I'll keep it short on H5, everyone. It's in response to health authority requests, and it's triggered by a change in the transmission associated with that variant very early and I would say out in the bonus quarter.

Speaker 3

Next question, please.

Speaker 1

Okay. We're going to come to Redburn Atlantic and Simon Baker. Simon, over to you, please.

Speaker 14

Thank you, Nick, and good afternoon, everyone. Thanks for taking my questions. 2, if I may, please. Firstly, on Shingrix, the very strong long term efficacy data suggests that a general revaccination is still somewhere away. But I just wonder, are there any specific populations where revaccination might be on the horizon?

Speaker 14

And then moving on to oncology, performance in oncology. I just wonder how much is left in the near term given the strong share gain, particularly with Gemperley in endometrial, the strong performance in Ajara. I mean, the suggestion is that doctors will be using a lot more of it in the next 6 months. I'm just wondering if you could give us an idea of what that near term upside is within oncology in 2024. Thanks so much.

Speaker 3

Well, oncology has obviously started extremely well. So Luke, perhaps you'd like to comment on that. Still an emerging business for us, but you'll definitely hear a lot more meat in management too. But do you want to pick up with that? And then Tony, I'll come to you on Shingrix.

Speaker 8

Yes. I mean, I think, Simon, the short answer is this, there's plenty left to run. If you look at Ajara and the launch, you saw the chart there. Market research again is very encouraging. The positioning of the product has been very deliberate in terms of targeting individuals with anemia, which is about 40% of subjects in first line and 70% in second line.

Speaker 8

If you look at barriers to use, the number one barrier, which is not a major one is I haven't used the product before, which of course we're happy to assist people in doing that. And then the second one is just access and having on the tenders. So that's what we're doing. If you look at early market share, I disclosed those earlier, I think it's quite exciting, 14% 28% so far. So I think, yes, very encouraging that.

Speaker 8

And of course, we're accumulating these patients with very long tails once they're on, particularly first line. So we had an initial bolus of patients who are more refractory. And now we're moving into exactly the universe that we expect to see more durable usage in, which is first line individuals with hemoglobin levels below about 10. In terms of Jim Hurley, I mean, endometrial is the focus right now. We'll cover a lot more broadly.

Speaker 8

I don't want to preempt the meet the management call, but we'll cover more on the lifecycle plans for Jen Hurley. There's some pretty interesting, exciting work going there. If you look at the perception versus pembrolizumab, pembrolizumab is the easier choice, is more broadly available, people are more familiar with it, but we are seeing quite a striking shift in terms of physicians assessment of Gemperli and willingness to try it. And as we mentioned earlier, the fact that we have a very strong hazard ratio of 0.69 and that's coming out of the FDA hopefully on the 5th May, if that then means downstream NCCN guideline changes then which you would expect with survival, then that's a further propellant for growth. And then with Zejula, again, shift to tablets, that's more of a one off effect.

Speaker 8

But if we can just hold that business pretty stable in the U. S, which I think we can, following the label changes. And then if you look at ex U. S, we've got good growth in Europe, which is heavily volume driven and emerging markets, we're still in the launch phase with a lot of these smaller markets. So net net with oncology, I think we're well placed to keep things moving and we'll tell you more meet the management around ASCO.

Operator

Yes. And probably the only thing to add to that, obviously, we have premium OS data coming to this year as soon as well. So and that will also figure early in the year. Let me address your question on Shingrix, Simon. So I'm most of them followed it.

Operator

The long term follow-up data exceptional with nearly 80% efficacy overall in the 50 plus population. Of course, what that does is underscores the value of vaccinating with Shingrix from 50 years onwards. I'd say based on the strength of the data we've got so far, there's no clear evidence as to when a booster would be warranted. But obviously, we're continuing to monitor the nature of breakthrough, in particular, in at risk populations.

Speaker 3

Okay. Next question, please.

Operator

So next question is James Gordon from JPMorgan. James, over to you, please.

Speaker 15

Hello, James Gordon, JPMorgan. Thanks for taking the questions. First question was about Orex C revaccination and make sure I got Luke's comments correctly. So was it that the 2 year dosing interval revaccination data is now going to be an H2, so maybe an ACIP meeting in October? And this is the 004 study antibody titer data suit.

Speaker 15

Do you now have data that says with the 2 year interval there are much stronger is a much stronger boost on antibody levels? That's what's giving you the confidence that you'd get the 2 year recommendation, even though you won't have clinical data. And then the second question was just a couple of one offs that Luke and Julie mentioned. What was Shingrix U. S.

Speaker 15

I believe was down 4%, but there were some pricing and prior inventory moves. So is that a clean trend or could Shingrix in the U. S. Still be down teens for the year? And Gen Meds looks like there could be a bit of a one off as well.

Speaker 15

So I think it grew 1%, you're saying down mid single digit. So the extent to which Gen Meds has a one off and then also just gross margin looks very good up 300 bps, but you're going to have higher ex V sales in H2. So can we say the Q1 gross margin and then give a boost for more ex V sales in the second half? Or is there something one off there at all?

Speaker 3

That's at least 4 or 5 questions in there. But anyway, I'm going to come to Julie first on gross margin. Then Tony, if you could talk about the 2 year, 3 year data, just clarify that. And then Luke will come back to perhaps repeat on the Shingrix and Genmeds questions that have been reraised.

Speaker 6

Thank you, Emma. It is definitely the project mix. So because we had such a strong half in the second half of last year, largely based on those launches, which is, you know, specialty care and vaccines, a high margin. Because we had Shingrix, we so we had RxV and we also had Ajara and Gympovia Lifecycle, they significantly changed the gross margin. And we'll be up against those in the second half of this year because they were new launches.

Speaker 6

So that changes the dynamic in gross margin overall. We also had the stocking effect, of course, last year. I think that was gross margin down.

Speaker 8

Yes. So, Tony or me?

Speaker 3

You did.

Speaker 8

Yes. Okay. And look, I think I don't want to repeat myself on Shingrix U. S. I mean, the key thing is there is a structure shift out of non retail to retail.

Speaker 8

We're addressing that. We've also said as you go up that curve of adoption, you have to work harder for those patients and that's what we're doing. But if you look at it last year, we increased the penetration by 7%. So if we can keep adding 1 plus percent each quarter, then it's still big numbers, James. And I think as I said earlier, you'll see pharmacists start to switch on and come back to vaccinating Shingrix instead of the respiratory vaccines as we come out of winter in the Northern Hemisphere.

Speaker 8

So I think still lots of reasons to be balanced and certainly not double digit pressure. And then also, again, the strategy has always been with Shingrix, which is to saturate the U. S. And then move into Europe, which again the extended efficacy data helps us, which is when we're negotiating with payers that haven't got national tenders like we are right now with France, the fact that you've got this outstanding efficacy at 11 years is really compelling value for money for these governments. So that's very helpful.

Speaker 8

Also for individuals paying out of pocket. And then of course we've mentioned China. So the strategy that we've had of U. S, Europe, emerging markets is very much in place.

Speaker 3

With prices maintained. Exactly.

Speaker 8

Very disciplined pricing corridors. And then ultimately, I mean we mentioned booster, which may only be a subset. There's also the exciting work that we're looking into with dementia, which again, I think you'd have to rewrite the penetration rates in a few years' time if we did demonstrate a prospective outcome on that one. In terms of general medicines, look, I mean, the way to look at AMPAP is about a 4% drag. So if you factor that in, I think we're still very much in with the range we've talked about.

Speaker 8

We did see an effect of certain products like augmentin, a good season in Japan with hay fever. So these will start to watch out over the year and the more typical structural effects in general medicines will keep there. And the fact is when we get up in the morning, our first priority, of course, are vaccines and specialty care, general medicines, in terms of resources, everything, by definition has to be 3rd on that priority. So if we can grow in other areas, that's where we're going to spend time, money and effort.

Speaker 3

And super contribution to the mix as we said. I mean, we're now at 2 thirds of the business. One of the most important structural shifts in the company and is what is helping to drive leverage for us is this move to where innovation can either be truly unique, sustained and an enormous demand because of its direct returns vaccines or real breakthroughs in step changes in care and prevention in specialties we're seeing with the pipeline that's coming through. Tony, do you want to

Operator

talk about that?

Speaker 8

Yes, very highly, but I'll walk

Operator

you through the considerations for the season 3 data, James. So first of all, just to remind you, any SIP decision is very unlikely before 'twenty five, and that's because the 1st subjects to receive the commercial vaccine are protected through the 'twenty five season. So whether or not you re vaccinate, that can wait until 'twenty five, 'twenty six season. There are 2 important data flows running into that. 1 is the vaccine efficacy study, 6.

Operator

That is dependent on the season and the Northern Hemisphere 'twenty three, 'twenty four season has not yet finished. That's a CDC decision. It's a global study and that is what is behind the move of the data into the second half. The second data flow is the immunogenicity study, that's 004 and that is on track to report out in the second half and includes a number of different revaccination schedules. I don't want to get into the detail on that.

Operator

Safe to say that what we're seeing there from earlier data is as is expected, which is the longer you wait between vaccination, the greater the boost.

Speaker 3

Thanks, Tony. Next question, please.

Speaker 1

Okay. We're going to come to Emily Field at Barclays. So Emily, over to you please.

Speaker 16

Hi. Thank you for taking my question, Orest. The first one is, Gilead last week talked about the impact of the Part D redesign on their HIV business resulting in flat growth for 2025. I was just wondering if you could give any color on how you're expecting that to impact your own business in 2025? And then secondly, just on Blendrep, before it was removed from the peak sales guys Guide, I believe it had been for guidance of over $3,000,000,000 in peak sales and now having Dream 8 and Dream 7, obviously, awaiting the data from Dream 8.

Speaker 16

Could you talk about perhaps expecting when you may add that in or characterize sort of how that peak sales opportunity may have changed with the new indications? Thank you. Thanks, Emily. I mean just on the

Speaker 3

peak year sales from Glenrep, we're obviously not going to be updating that today. We're explicitly and it's an interesting reference point to look at 'twenty one when we were talking about earlier lines. But we have new data, exciting data that's come through. We're going to be presenting at ASCO. Tony, Luke and our teams will update with about how we see the path forward but we've obviously got a journey to go on with the regulators.

Speaker 3

We're very engaged in that. But clearly what we're interested is in the step change of impact for patients and that could be very exciting and we'll keep you updated along that journey in due course. Deborah, exciting to have a question on HIV, so perhaps you could comment. We don't guide by asset by year, but we have factored this into our broader outlook. And Deborah, can you give a bit more color to that, please?

Speaker 3

Thanks, Emily. So the first thing we'll say

Speaker 17

is we're obviously delighted by our growth in Q1, which was 14%. And we're particularly delighted because, as I said earlier, 50% of our growth, our pound growth came from long acting injectables. And the momentum behind those medicines is continuing to be extremely important. Today, it's driving growth and will continue to be important to the end of the decade as our pipeline, which is long acting injectable orientated, continues to make great progress. In terms of 2025, so we believe that the IRA Medicare Part D redesign will have an impact of about £200,000,000 next year.

Speaker 17

So it will be a drag, but actually, as you can see, our growth is our growth in our momentum is very strong. So it will have a headwind, but we believe that's manageable and has already been factored into all of the guidance we've given, including our upgrade last year to our 5 year CAGR, 21% to 26% being 6% to 8% growth.

Speaker 3

And more than 7% at a group level. Next question, please.

Speaker 1

Thanks, Emma. I'm mindful of the fact that we are at the end of the call, so we're going to run for another 10 minutes. We do have 5 individuals with hands raised, so we'll endeavor to get through as many of these as possible. If we can keep both the question and answer concise, then we'll hopefully, we'll get there. So Richard Barton will come to you please next to BNP Paribas.

Speaker 11

Hi. Thanks for taking my question. I just want to push a bit more on the RSV revaccination potential. It's my understanding is that you no longer have vaccine efficacy data for patients having received a booster before season 3. So we're just going to have immunogenicity data.

Speaker 11

So I'm just wondering about how confident you are that ACIP will make a recommendation based on just immunogenicity data when the previous booster data we saw showed no additional benefit from booster after season 1? So that's the first question. And then second on just on Shingrix, just to round off the discussion. So in Europe, growth is slow to single digits. I'm just wondering, is that just a capacity allocation?

Speaker 11

Or could we expect to see a sort of reacceleration in growth for Shingrix in Europe? Thank you.

Speaker 3

Okay. Quick answers, Tony. And then So

Operator

ACIP won't make a decision this year, and it will be on vaccine efficacy from 3 seasons and immunogenicity when we present those data together.

Speaker 3

Thanks, Luke.

Speaker 8

Yes, it's very much driven as we open up tenders. I assume we're in discussions with France right now. We've got a very good rating in the tough system and a number of other smaller European markets are starting to open up. So I would expect growth in the second half to be encouraging.

Speaker 3

Next question, please.

Speaker 1

We take the next question from Peter Verdult at Citi. Peter, MC please.

Speaker 18

Yes. Thanks. I'm sorry, two more for Luke. Peter Verdult here from Citi. On the IL-five franchise, Luke, we're assuming biologics penetration in severe asthma currently around 20% to 30%.

Speaker 18

Just interested to hear whether you had more precise data and thoughts or hopes where penetration could peak out? And then secondly, the mepo COPD data does play out as you hope in terms of target clinical profile. How are you thinking about biologics penetrating in COPD? I mean, can the ramp be quicker than what has been seen in asthma in light of pomelo, just already being experienced in biologics? Or would you take a more cautious view given the novelty of biologics as a treatment option in COPD?

Speaker 18

Thanks.

Speaker 8

Yes, Peter. I mean, I think like your numbers are very consistent with what we see in terms of tracking insurance databases, ATUs, physician surveys, etcetera. If anything physician surveys tend to overstate their usage. I think this is part historical. I mean, there are lots of parallels we've seen, of course, with TNFs and rheumatologists.

Speaker 8

When you see more recent graduates that have been trained and employed antibodies throughout their training, they're more comfortable with the utilization. You've also got the evidence trend is moving in our favor. There's an emerging we've done some good studies here and plan to build on this around the capacity to drive remission through earlier intervention with antibodies. So with IL-five in particular we published on that. So I think that's all working in our favor.

Speaker 8

With COPD, my expectation is, yes, they would use it more actively because they've had a number of years experience in asthma subjects. So let's see, of course, it's going to be driven by the strength of the data. And of course, we have huge synergies with Trelegy, Orexpi and the COPD treatment group. So yes, let's see.

Speaker 3

Obviously, we're going to read see the readout in Nucala, but then we have play and the rest of them are longer acting IL-5s and so the deal will close this quarter in terms of where other technologies can take us. Okay. Next question please?

Speaker 1

Peter Welford at Jefferies. Over to you.

Speaker 19

Yes. Hi. I'll stick to one question. Just curious on Orexi with regards to the 50 to 59 year old, your degree of confidence that you'll get a positive CDC ACIP review of that given some of the prior commentary of the earlier ACIP this year? And obviously, not in the approval, but we're just thinking about the ACIP rather than the FDA.

Speaker 19

And I'd love to relate it to that any commentary you have on the recent headline data we saw for an 18 to 59 year old cohort from your competitor and whether do you think there's any commercial risk from the 18 to 50 year old cohort that there is there? Thank you.

Operator

Yes. So just quickly then, Peter, FDA accepted the submission. We've got a PDUFA date for June, so it will be available for ACIP. And as Luca mentioned in the 50 to 59 population, we are focused on high risk individuals. The data is just as strong as the 60 plus population.

Operator

So I think we're in good shape for that particular decision. And remind

Speaker 3

me what the second question is. Yes.

Speaker 8

I mean, I think the other thing to factor in, Peter, is you've got 7 new ACIP members now and a new chair. So, the question will be, will you see it obviously a change in behavior? Now if you look at the $80,000,000 to $59,000,000 with Pfizer and the commercial consequences of that, I mean, in the end, the bulk of this volume is going to be driven by retail business 90% and that's older individuals. And we've seen that pattern again with Shingrix. Remember, we've got the IC label 18 plus there and it's a small numbers.

Speaker 8

It does help with contracting, but the 50 to 59 for us also helps with contracting. The younger individuals are more likely to be the non Medicare population are more likely to be treated in the retail e. G. Maternal patients etcetera. So not too concerned about it

Operator

at this point. And we're the 1st to submit a file in that adult population in the 50 to 59 adult population. Okay. Next question will come to Tim Anderson at Wolfe Research. Tim, over to you, please.

Speaker 20

Thanks. On defamocamab, just your confidence in the level of in having compelling data and then your excitement about the commercial opportunity to me it seems like a twice year injection would be quite compelling could make it the category leader, but maybe that's unrealistic. I can't really ever tell how excited you are about that program. Partly cannibalizes McCullough. And then just BlendRep, pretty clear coming back to market, do you think we're just completely past there being any commercial considerations on the Itox issue?

Speaker 20

Would you still think that's going to be something to contend with given what else is available out there?

Speaker 3

Okay. Well, listen, thanks, Tim. First of all, I'm going to come to Tony and then Luke in a second on DEFI, which obviously the readouts are coming this coming quarter. And also we can hear on Glenrep and the commercial impacts around Itox. But let me start by saying it's hard for you to and some are very excited.

Speaker 3

I'd refer everybody to the meet the management that was done specifically on respiratory when we were clearly thought that and important unlocks for us to see. But, Sandy, do you want to keep Yes.

Operator

So just to remind you, full data set available at the end of this half. So we'll update you on it next half. Confidence in the data comes from very clear PKPD relationships from our new collar experience. And I'd leave it at that. I'd rather get any more details.

Operator

Yes. So I mean it's

Speaker 8

really interesting. I am excited about difumocimab. This is being cited Tim.

Operator

Yes.

Speaker 3

Exactly. Max enthusiasm.

Speaker 8

Exactly. Max enthusiasm. So, yes, you've got a validated mechanism that physicians are aware of. You've got this trend towards remission. You've got a Part B component, which obviously has certain incentives in the U.

Speaker 8

S. Environment, which is encouraging. The physician has total control of compliance. And we know from our market research that patients would prefer something twice a year versus 26 times a year or 12 times a year or 6 times a year. So, yes, and then the other important thing is we've compacted the life cycle management.

Speaker 8

So all the indications eGPA, nasal polyps etcetera arriving within 2 years of launch in contrast to Nucala with the exception of COD, with in contrast to Nucala, which is multi 6 plus years. So quite exciting. In terms of Glenrep, we'll present some interesting data at ASCO. As you know, hematologist, oncologists are very comfortable managing toxicity. I think the main question historically was around the appropriate dose and the scheduling, got a lot more insight from that from DREAM 7, DREAM 8 and also some of the Phase 4 work that we've done.

Speaker 8

So no doubt we'll cover that in more depth. But I think we've got a different picture. And then also helpfully first line with the MRD shift with the FDA is also helpful in terms of lifecycle manageable blend ramp and compression of launch timeframes.

Operator

Yes. Just to add to that, reversible, transient and manageable, those are the 3 words to think about. And I'll point you to a first line ISS that was published at the European Myeloma Network in April, if you want to get a sense of what sits behind those three words.

Speaker 3

Thank you.

Speaker 1

In the spirit of keeping this the time I've said, I think we'll have to close the call there. So Emma, is there anything you want to just add in terms of closing the call?

Speaker 3

No, just to repeat, a very strong start to 2024, another quarter of excellent performance and basically continued pipeline progress. And this whole team and all that support them remain very strongly committed to delivering our potential and more. So we look forward to catching up with many of you on calls in the coming days and over the months ahead.

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