GSK Q1 2025 Earnings Report

GSK EPS Results

• Actual EPS: $1.13
• Consensus EPS: $1.08
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $0.43

GSK Revenue Results

• Actual Revenue: $10.06 billion
• Expected Revenue: $7.52 billion
• Beat/Miss: Beat by +$2.54 billion
• YoY Revenue Growth: +2.10%

GSK Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 7:00AM ET

GSK (NYSE:GSK), formerly known as GlaxoSmithKline plc, is a British multinational pharmaceutical company headquartered in Brentford, London. It operates in three main business areas: pharmaceuticals, vaccines and consumer healthcare products. The company has a global presence, operating in over 150 countries and employing over 94,000 people worldwide.

GSK has a long history of innovation and has been responsible for developing some of the world's most important medicines, including treatments for asthma, HIV/AIDS and cancer. The company is also committed to global health initiatives, focusing on improving access to essential medicines in developing countries.

Emma Walmsley has been the CEO of GSK since 2017, becoming the first female CEO of a major pharmaceutical company. She has been instrumental in transforming the company's operations and has led a significant restructuring effort to simplify the business and focus on key growth areas. The management team includes several other key executives, including Dr. Hal Barron, former President of Research and Development, now a Non-Executive Director and Luke Miels, Chief Commercial Officer.

GSK's financial performance has been mixed in recent years. The company's revenue has been relatively flat over the past few years, and rising R&D costs and the impact of COVID-19 on sales have impacted profitability. In Q2 - Q4 of 2022, the company's stock price dropped nearly 40% concerning long-term shareholders. This stock has underperformed the broader market and many of its peers in the pharmaceutical industry. However, this also points to the fact that the stock is undervalued relative to its peers providing good value for would-be investors.

GSK has also undergone significant changes in ownership in recent years. In 2019, the company merged its consumer healthcare business with Pfizer's consumer healthcare business to create a new joint venture. GSK owns a majority stake in the joint venture, which is expected to generate significant cost savings and synergies.

The pharmaceutical industry is highly competitive, with a few major players dominating the market. GSK's primary competitors include Pfizer, Johnson & Johnson and Roche. The industry is also heavily regulated, with stringent drug safety and efficacy requirements.

One of the key trends in the industry is the shift toward personalized medicine, which involves developing treatments tailored to individual patients based on their genetic makeup. GSK has invested heavily in this area, focusing on oncology and rare diseases.

Despite the pharmaceutical industry's challenges, GSK has several growth opportunities in its core business areas. The company has a strong pipeline of new drugs and vaccines in development, including several potential blockbusters. GSK is also expanding its presence in emerging markets, where demand for healthcare products is growing rapidly.

In addition, the company has been exploring opportunities in digital health and artificial intelligence, which could transform how medicines are developed and delivered. GSK is also committed to sustainability and has set ambitious targets to reduce its environmental impact and improve access to healthcare in low-income countries.

The pharmaceutical industry is subject to a range of risks and challenges, including regulatory hurdles, patent expirations and intense competition. GSK is not immune to these risks and faces some specific challenges.

The COVID-19 pandemic is one of the biggest challenges facing GSK. Another risk is the potential for increased regulatory scrutiny. The pharmaceutical industry is pressured to demonstrate that its products are safe and effective. GSK has faced significant fines and penalties for regulatory violations.

GSK faces competition from established players in the industry and new entrants, particularly in digital health. As a result, the company will need to continue to invest in innovation and R&D to maintain its competitive position and drive growth in the future.

GSK Q1 2025 Earnings Call Transcript

Presentation

[Constantin Fest, SVP - Head of IR at GSK]

Ladies and gentlemen, a very warm welcome to this GSK Q1 twenty twenty five results call. My name is Konstantin Fest, new Head of IR at GSK, and I'm delighted to be joined today by Emma Warmsley, Luke Miles and Julie Brown. I'm pleased to say Deborah Waterhouse, CEO of returned this week full time, but David Redfern, Chairman of VIVE, will be covering HIV today. Tony Wood, our CSO will also be joining us for Q and A. Today's call will last approximately one hour with the presentation taking around thirty minutes and the remaining time for your questions.

[Constantin Fest, SVP - Head of IR at GSK]

Please ask only one to two questions so that everyone has a chance to participate. Before we start, please turn to Slide three. This is the usual Safe Harbor statement. We will comment on our performance using constant exchange rates or CER unless otherwise stated. I will now hand over to Emma on Slide four.

[Dame Emma Walmsley, CEO at GSK]

Thank you, Constantine, and it's great to have you on board. And welcome to everybody joining us today. Please turn to the next slide. GSK continues to make strong progress. Group sales were up 4% this quarter, core operating profit grew 5%, and core earnings per share also rose 5% to 44.9p.

[Dame Emma Walmsley, CEO at GSK]

This performance was in line with our expectations and again demonstrates the quality, strength and resilience of GSK's portfolio. Sales growth was driven by Specialty Medicines, our largest business, up 17%, with strong contributions from respiratory, immunology and inflammation, oncology and from HIV. As expected, vaccine sales were down 6% and general medicine sales were broadly stable. R and D delivery has continued with two out of the five FDA product approvals we expect in 2025 now secured. And we completed the acquisition of IDRX, which adds another very promising oncology asset to our pipeline.

[Dame Emma Walmsley, CEO at GSK]

Cash generated from operations was over £1,000,000,000 providing further funds to invest in growth and to deliver returns to shareholders. Our dividend for the quarter increased to 16p, and we've commenced the £2,000,000,000 share buyback program announced in February. Alongside this, we are proud to have sustained progress with our trust goals, an estimate that in the last four years, GSK has reached at least 2,000,000,000 people with our vaccines and medicines, including through our global health work. Finally, we're confirming the financial guidance previously given for 2025. Next slide, please.

[Dame Emma Walmsley, CEO at GSK]

We continue to make good progress on delivering R and D productivity improvements and future growth opportunities. As we said at the full year, R and D is very focused on delivering the potential of 14 key pipeline opportunities, all of which are expected to launch between 2025 and 02/1931, and all of which have peak year sales potential of more than GBP 2,000,000,000. This portfolio demonstrates the strategic shift we've made to develop more specialty medicines, many of which offer long acting preventative type care and better adherence for patients. Along with the recent approvals for Penmenvi and Blue Jepper, we continue to expect FDA approvals for Nucala COPD imminently, Glenrep in July and Depimucumab by the end of the year. Innovation in our pipeline also continues to be recognized.

[Dame Emma Walmsley, CEO at GSK]

We received another breakthrough designation for our novel ADC targeting B7 H3, and we look forward to sharing more data from our ADC programmes later this year. This quarter, we also presented data from our high potential HIV injectable portfolio at CROI, including positive data from our third generation Insty, which advances our leadership position in the development of long acting agents to treat as well as prevent HIV infection. Our number one priority for investment remains growth through innovation, organically in R and D and with continued targeted business development. And we're specifically prioritizing investment to key assets in RI and I in oncology alongside long acting HIV and core vaccine opportunities. On a broader investment front, we were also very pleased to break ground on our new state of the art manufacturing facility in Marietta, Pennsylvania this quarter.

[Dame Emma Walmsley, CEO at GSK]

This is squarely targeted on increasing manufacturing capacity for new pipeline products in The U. S. And means that GSK will have six manufacturing sites in America. Next slide, please. We remain highly confident in our commitments to growth.

[Dame Emma Walmsley, CEO at GSK]

Whilst there are clearly elevated levels of uncertainty in the macro environment right now, including from possible sector tariffs, we start from a position of strength. Our momentum, together with the strength of our portfolio, the resilience we've built into our supply chain and our proven capability to drive operating leverage, mean we have the ability and options to navigate and mitigate this. This underscores our confidence that 2025 will be another year of profitable growth and why we remain on track to deliver our guidance and our outlooks. With that, I'll hand over to Luke.

[Luke Miels, Chief Commercial Officer at GSK]

Thanks, Emma. Please turn to the next slide. In Q1, we delivered £7,500,000,000 of sales, up 4% versus last year, demonstrating the resilience of our diverse medicines and vaccines portfolio. As Emma mentioned, growth in the quarter was driven by specialty medicines, which continued to more than offset anticipated headwinds in our vaccines business. By region, growth was driven by Europe up 11%, with The US up four percent, impacted by a challenging comparator base and the introduction of the IRA, which is previously stated we anticipate to be a 400 to £500,000,000 headwind throughout the year.

[Luke Miels, Chief Commercial Officer at GSK]

Next slide, please. Specialty medicines continued its excellent momentum, growing 17% in q one with strong performances across all therapy areas. In addition, three of the five product approvals we expect this year are in specialty medicines. That's Glenrep, Nucala and COPD, and Depamacumab, and I'll talk about them shortly. RNI was up 28% in the quarter, and within that, Benlysta, our treatment for lupus, grew 39%, and Yukala, our anti IL five biologic treatment, grew 21% with both of these benefiting from strong demand as well as the comparator, which saw US channel inventory reductions in Q1 last year, a better of which will not repeat in the remainder of

[Luke Miels, Chief Commercial Officer at GSK]

the year.

[Luke Miels, Chief Commercial Officer at GSK]

In oncology, q one sales were up 53%, with sales of Gemperly and Ajara more than doubling. Gemperly, the only immuno oncology based treatment to show an overall survival benefit in endometrial cancer, continues to see increased patient uptake in The US and Europe following all counters approval for primary advanced or recurrent endometrial cancer. And Adjara sales were driven by high US volumes and strong uptake following the new market launches in Europe and international. And this this market expansion continued in q one with launches in Spain and Italy. We expect very strong momentum in our specialty medicines portfolio to continue and reconfirm our 2025 sales guidance of low double digit percent increase.

[Luke Miels, Chief Commercial Officer at GSK]

Next slide, please. Innovation is our priority, and we've got three exciting approvals expected in specialty medicines this year. Benrek was approved in The UK earlier this month and has an FDA PDUFA date in July with a projected overall survival benefit of thirty three months in Dream seven compared to standard of care, manageable safety profile, and low treatment burden. Feedback from physicians is that Blendrep could redefine second line multiple myeloma treatment. Dose interruptions enable and manage ocular side effects and it's an immediate thirty minute infusion administered in a community setting which is where seventy percent of patients are treated in The US.

[Luke Miels, Chief Commercial Officer at GSK]

We're also being very thoughtful about the launch which as I've said in the past will be staged. We'll work hand in hand with individual physicians and patients to ensure dose management is understood and the ophthalmic support network is in place. Laying this groundwork will help firmly establish Blendrec in the second line multiple myeloma market and demonstrate the benefits of this transformative medicine. Turning to respiratory. GSK has been a leader in the prevention and treatment of respiratory disease for more than five decades.

[Luke Miels, Chief Commercial Officer at GSK]

In 2015, we launched Nucala for severe asthma, the first monoclonal antibody to target IL-five. Next week, we're expecting FDA approval for a major new indication for Nucala to treat COPD, the third leading cause of death worldwide affecting more than three hundred million people globally. And we've got an experienced skill force in place and are ready to launch, and we expect that the full to share the full phase three of MACNAE the MACNAD trial results very soon, including data on the reduction of most serious exacerbations which lead to hospital presentations, which are known to be the strongest indicator of disease progression and death. Also in respiratory is Depamucumab, our exciting new anti IL-five medicine with six month dosing, which has been filed in all major markets for approval in both severe asthma and chronic rhinosinusitis with nasal polyps, with a US FDA decision expected towards the end of the year. In a pooled analysis of the swift pivotal studies in asthma with type two inflammation characterised by blood eosinophil count, dapamokumab demonstrated a seventy two percent reduction in exacerbations requiring hospitalisation, and feedback from the asthma community on these data have been very positive.

[Luke Miels, Chief Commercial Officer at GSK]

In a poll of pulmonologists, eighty six percent think dapamokumab could become a new standard of care and eighty two percent said they would consider prescribing depamokumab ahead of alternative biologics. So this is clearly a significant opportunity to increase the uptake in bionate naive patients given rates in asthma remain low. We estimate that only around twenty one percent of eligible asthma patients currently receive a biologic with patients potentially benefiting from increased adherence from a twice yearly dosing schedule, and we anticipate depamokumab will also capture share from shorter acting alternatives. And this underpins our confidence in depamokumab's multibillion pound peak year sales potential. I'll now hand over to David to carve HIV.

[David Redfern, Chief Strategy Officer at GSK]

Thank you, Luke. We continue to deliver strong growth and momentum in HIV treatment and prevention, with sales growing 7%, driven by competitive execution and strong patient demand for our industry leading innovative portfolio in Dovato, Cabenuva and Apritude, all with gold standard integrase inhibitors at the core. In The U. S, we saw strong double digit volume growth, driven by long acting, partially offset by some impact from the implementation of the IRA and from channel mix. Our leading oral two drug regimen, Dovato, continued to grow strongly in all regions at 19%, while our long acting injectables Cabinuva and Aptitude grew 3863%, respectively.

[David Redfern, Chief Strategy Officer at GSK]

We remain delighted with the strong and continued momentum of our long acting portfolio. Cabinuva is the first and only approved long acting injectable regimen for the treatment of HIV, with seventy seven thousand patients globally now benefiting from this transformative medicine. We shared data at the CROI conference in March, demonstrating Cabinuva's high long term effectiveness in real world studies, including almost fifteen thousand people living with HIV. These data underline the high patient preference and treatment satisfaction for Cabinuva compared to daily pills. Aptitude, the first and only approved long acting option for HIV prevention, is now benefiting twenty one thousand individuals in The U.

[David Redfern, Chief Strategy Officer at GSK]

S. We remain confident in the competitive profile and growth of Aperture with strong efficacy at more than ninety nine percent, safety and importantly, overall tolerability across broad populations. At CROI, we also shared implementation study data showing zero cases of HIV acquisition as well as high persistence addressing adherence challenges some face with orals. The potential for the long acting market remains significant, with the total HIV market today worth more than GBP 22,000,000,000 and with treatment accounting for ninety percent of this. We expect the use of long acting injectables to continue to rise significantly through strong patient demand, physician belief in the unique benefits and increased infrastructure to support their administration.

[David Redfern, Chief Strategy Officer at GSK]

Given the strong start to the year, we remain confident in our 2025 guidance of mid single digit percentage growth, driven by strong volume growth, partly offset by pricing dynamics through the IRA and channel mix. Next slide, please. At CROI, we shared exciting data highlighting our great HIV pipeline progress, including three high potential assets in our treatment pipeline, Delivering the best resistance profile of any entity we've seen to date, we were delighted with the Phase 2a data for our third generation entity, VH184. Results demonstrated rapid and high potency, positive safety results and no drug resistant mutations. This promising early data supports further development of VH184 as the backbone of our next generation of HIV treatment regimens with IP cover through to 02/1939.

[David Redfern, Chief Strategy Officer at GSK]

We also shared Phase 2b data showing our bNAP N6LS achieved high efficacy and tolerability. These results, combined with pharmacokinetic data, support progressing this asset to explore six monthly dosing. We look forward to seeing Q6M data in the next phase of this study. Moving on to VH499, our investigational capsid inhibitor. Data from a Phase 2a study also showed potent antiviral activity and favorable safety, again supporting further development of this asset.

[David Redfern, Chief Strategy Officer at GSK]

With these multiple data readouts, we remain on track to confirm the assets that will deliver six monthly dosing for treatment in 2026 with our Q6M registrational study start planned in 2027. As you can see on the slide, we expect our Q6M regimen to contain a combination of one of three long acting entities, Cabio LA, VH184 or VH310 with either our bNav N6LS or VH499, our capsid inhibitor. And then turning to Q4M, our PrEP bridging study is fully recruited. We expect data in mid-twenty twenty six, and we anticipate starting our Q4M treatment registrational study by the end of this year. As pioneers in long acting injectables, we are focused on the next generation of HIV innovation with integrase inhibitors, the gold standard for HIV treatment and prevention at the core.

[David Redfern, Chief Strategy Officer at GSK]

We remain confident that our pipeline, including three new entities in development and five planned launches, will continue to drive performance over the coming decade, and we will share more at a Meet the Management event in Q2 twenty twenty six. With that, I will hand back to Luke.

[Luke Miels, Chief Commercial Officer at GSK]

Thanks, David. Turning to Vaccine. Sales for Q1 were over £2,000,000,000 down 6% on last year in line with expectations. Shingrix sales declined 7% with growth in Europe partially offsetting lower sales in The US and international. As anticipated, the pace of penetration in The US is slight with cumulative immunization rate reaching forty one percent at the end of twenty twenty four.

[Luke Miels, Chief Commercial Officer at GSK]

Sales in international were impacted by the annualization of rapid uptake from the national immunization program in Australia in quarter one twenty twenty four and the agreed lower supply to our co promotion partner in China. In Europe, strong growth was driven by the excellent launch in France and good performances in other European markets, including Spain, The Netherlands, Italy, and Greece. Shingrix is now launched in 54 markets with recommendations in more than 40 markets and national reimbursed personal programs in 24. Growth outside The US this year will be supported by expanded funding, the launch in France, and a new Japanese national subsidy for shingles vaccination. The average immunization rate across top 10 markets outside The US is now around eight percent, so there's still a significant opportunity for Shingrix ahead.

[Luke Miels, Chief Commercial Officer at GSK]

In meningitis, our portfolio was up 20% in q one with strong double digit growth across Europe and international, primarily driven by Bexero. In February, we received US FDA approval of our new pen developed vaccine, Penmenvi, and we're pleased to also have received a unanimous recommendation from the Advisory Committee on Immunisation Practices or ACIP to the CDC. And in time, we expect this vaccine to simplify immunisation schedules, increasing coverage and protection against a serious life threatening illness. Turning to RSV. Orexed sales were down 57% in the quarter against a challenging comparator and the impact of restricted ACIP recommendations.

[Luke Miels, Chief Commercial Officer at GSK]

However, Orexed continues to be The US market leader, retaining 55% of the old and adult vaccination share. Two weeks ago, ACIP voted unanimously to recommend adults aged 50 to 59 at an increased risk to receive an RSV vaccine. We welcome the expanded recommendation, which opens up access to a cohort of around 13,000,000 people in The US. Although in the current vaccines environment, we don't expect a significant upside this year, and this market will take time to build. But we remain confident in the long term importance of this vaccine.

[Luke Miels, Chief Commercial Officer at GSK]

We also presented a thirty six month immune response data from a zero zero four study, The data provided evidence to support future revaccination with Orexia underpinning our strong belief that a revaccination will be required with our base case at five years. We also expect more data on this in 2026. Outside The US, Erectomy is launched in 37 markets with recommendations in 18 of these markets and national reimbursement programs in six with more to come. Although it's preseason, we are seeing some early access momentum outside The US and particularly in Germany following recommendation and reimbursement. As expected, established vaccine sales were impacted by non repeating prior year sales partially offset by high US demand for our measles, mumps, and rubella vaccine.

[Luke Miels, Chief Commercial Officer at GSK]

Overall, we continue to expect vaccine sales to decrease low single digit percent in 2025 while remaining confident in the medium to long term prospects of this business and pipeline. Next slide, please. Turning to general meds. Respiratory sales were up 1% driven by Trelegy, which was up 15%, which benefited from a continued patient demand, sit cloth growth, and increased market share. Trelegy is the number one brand of aspirin COPD worldwide, and it's the cornerstone of our COPD treatment portfolio and is soon to be complemented by our new biologics that are on that are an add on to Trelegy, a standard of care, cementing our leadership in the COPD space and reflecting our long legacy of leadership in respiratory health.

[Luke Miels, Chief Commercial Officer at GSK]

Overall general medicine sales were stable in the quarter with other general medicines down around 3% owing to continued generic competition as expected. In March, we received FDA approval of Blue Jepper, a new antibiotic treatment to treat uncomplicated urinary tract infections. We're on track to launch in the second half. We will focus on building access over time. Later this year, we'll be pursuing a regulatory decision for the second indication in urogenital gonorrhea, and we plan to build on our anti infectors portfolio in the coming years.

[Luke Miels, Chief Commercial Officer at GSK]

Overall for the Genmeds portfolio, we continue to anticipate sales to be broadly stable in 2025. I'll now hand over to Julie.

[Julie Brown, CFO & Executive Director at GSK]

Thank you, Luke, and good afternoon, everyone. Next slide, please. Starting with the income statement for the quarter with growth rates stated at CER. GSK has started 2025 well, carrying momentum through from 2024 with sales increasing 4% and core operating profit growing 5% against a very strong comparator base of 35% growth last year. Sales benefited from the continued strength of specialty, up 17%, more than offsetting the expected decline in vaccines.

[Julie Brown, CFO & Executive Director at GSK]

Volume growth more than offset price erosion, stemming from the Medicare Part d redesign implemented at the start of the year. And as Luke mentioned, the impact of this through the first quarter was in line with our expectations. Turning to the income statement, we have delivered another quarter of operating leverage. Gross profit benefited from product mix as the portfolio continues to transition towards higher margin specialty medicines. SG and A increased 8% year on year, but 4% excluding the Zejula royalty credit last year.

[Julie Brown, CFO & Executive Director at GSK]

And royalty growth was up 21% driven by prior year true ups. These factors have supported the delivery of 5% operating profit and EPS growth or 8% operating profit growth excluding the Zejula credit. Turning to the total results, the significant growth in operating profit predominantly resulted from lower CCL charges compared to last year and foreign currency movements. Next slide, please. This chart illustrates a substantial margin progression we have continued to deliver on an underlying basis, driven by benefits from the transition to specialty medicines, as

[Julie Brown, CFO & Executive Director at GSK]

well

[Julie Brown, CFO & Executive Director at GSK]

as our ongoing disciplined returns based approach to investment. Core operating margin improved to 33.5%, up 130 bps, excluding the prior year's Asula credit or 30 bps year on year in total. Accretion was driven by mix as gross margin benefited from the strong growth of higher margin specialty medicines, including one off benefits from Nucala and Ben Lister comparator bases, as Luke mentioned. We continue to invest in our key products, including Blendrep, Depamucumab, and Dujara, with underlying SG and A rising broadly in line with sales. And for the full year, we expect SG and A to grow a low single digits as we allocate resources to support our launches over the coming twelve months.

[Julie Brown, CFO & Executive Director at GSK]

R and D grew marginally below sales this quarter and is expected to accelerate as we progress through 2025 driven by investment in our next wave of key specialty pipeline assets. Next slide, please. Turning to cash flow with commentary before the one off impact of Zantac payments. Cash generated from operations was GBP 1,400,000,000.0. CGFO improved GBP 200,000,000.0, higher operating profit and favorable movements in RAR, partially offset by adverse movements in receivables driven by higher Orexfi and Schoenbrick's collections last year.

[Julie Brown, CFO & Executive Director at GSK]

Free cash flow improved by $500,000,000 excluding Zantac, supported by a favorable CapEx comparator that included upfront BD payments last year to Hanso. Zantac payments this quarter totaled GBP 62,000,000, and we now expect GBP 1,200,000,000.0 of payments to be phased over the remainder of 2025 with GBP 500,000,000.0 expected in Q2. Next slide, please. Through the quarter, we've continued to deploy cash in line with our capital allocation framework, whilst ensuring this remains underpinned by a strong balance sheet. Free cash generation pre CapEx was over GBP 1,000,000,000, which supported investment in our oncology pipeline through the purchase of IDRX, as Emma mentioned earlier, and our continuing commitment to shareholder returns.

[Julie Brown, CFO & Executive Director at GSK]

We have returned over GBP 800,000,000.0 to shareholders through the dividend and the buyback, where we completed nearly GBP 500,000,000.0 in Q1. We remain committed to investing for growth and providing attractive and growing shareholder returns. Next slide, please. We're very pleased with the business performance, which is outlined was driven by strong growth of key products and higher than anticipated royalties. These results reinforce our confidence in the delivery of our full year 2025 guidance of 3% to 5% sales growth and 6% to 8% operating profit and EPS growth.

[Julie Brown, CFO & Executive Director at GSK]

Royalty income for the year is now expected to be higher than previously guided at GBP $750,000,000 to 800,000,000, including an IP settlement relating to RSV agreed in April, comprising an upfront to be credited in Q2 and a future royalty stream. This additional income will be reinvested in the pipeline this year with R and D investment growth now expected to be slightly ahead of sales. In terms of phasing, we continue to expect profit growth to be second half weighted, albeit to a lesser extent than previously anticipated, with Q2 now benefiting from the IP settlement. More details around phasing and the modeling assumptions are contained within the appendix. Looking beyond, we remain confident in our medium and longer term outlooks to 2026 and '31.

[Julie Brown, CFO & Executive Director at GSK]

Should tariffs be imposed, as Emma mentioned, we are well prepared and start from a position of strength. We have identified potential mitigating options in supply chain and increased productivity initiatives, and we remain committed to sustained investment in our pipeline and launches. Next slide, please. Turning to our roadmap, on the back of 13 positive Phase three readouts last year, GSK has carried pipeline momentum into Q1 with two new U. S.

[Julie Brown, CFO & Executive Director at GSK]

Approvals as highlighted. Looking ahead, we expect three more approvals for NewCarlo's COPD, Blenrep and Depamucumab this year with PDUFA dates in May, July and December respectively. We expect all three to be important growth drivers for GSK. And over the next two years, we expect this momentum to continue as our pipeline delivers new growth drivers and we look forward to 15 phase three and pivotal study readouts in respiratory hepatitis, long acting HIV and oncology. And with that, I will hand back to Emma for her closing remarks.

[Dame Emma Walmsley, CEO at GSK]

Thanks, Julie. So to summarise, GSK is delivering with a good start to the year. Momentum in our portfolio is supporting our ability to continue to deliver mix improvement, operating leverage and cash flow. Despite the environmental uncertainty, we continue to expect 2025 to be another year of profitable growth, and we remain very focused on investing in the pipeline, targeted business development and successful launches to fuel further growth to achieve our potential and more for patients, shareholders and our people. Thank you very much.

[Dame Emma Walmsley, CEO at GSK]

And with that, we will now open up the call for Q and A with the team.

[Constantin Fest, SVP - Head of IR at GSK]

Thank you, Emma. Emma. James Gordon from JPMorgan. Go ahead.

[James Gordon, Vice President at JP Morgan]

A lot. James Gordon, JPMorgan. Thanks for taking

[James Gordon, Vice President at JP Morgan]

two

[James Gordon, Vice President at JP Morgan]

questions. First question would be new launch expectations. So two important approval decisions coming up, Nucala, COPD, May seventh and Blendrep, July 23. So assuming things are still operating as normal with FDA and you get the timing approvals, what are your latest thoughts in terms of how those launches go? What are the gating factors and and and best precedents for how they go?

[James Gordon, Vice President at JP Morgan]

And could we see strong uptake already in h two, or are these more twenty twenty six stories? I guess I'm thinking for Glenrec, could Ocular talks and education around that or other things you need to do around that via a barrier to a fast launch? And for Nucala, is do PCoPD the precedent? That that's the first question, please. And the second question was on tariffs.

[James Gordon, Vice President at JP Morgan]

So I heard the comments are being well positioned, and and also that there could be some mitigating options and productivity offsets. So can can you elaborate, like, what would the impact be? Let's say it's a 25% tariff from bringing products from outside The US into the into The US. What what would the impact be on GSK, and how quickly could you have these offsets or productivity benefits? Would would it be that you'd actually move US manufacturing or something else?

[James Gordon, Vice President at JP Morgan]

And is there, like, an inventory or other cushion? Is that what you could be referring to?

[Dame Emma Walmsley, CEO at GSK]

Alright. There's there's quite a lot in there, but let's start with what matters most, which is the exciting new launches we're bringing and, you know, across that portfolio loop. Perhaps you'd like to kick off there, and then I'll come back on Tara.

[Luke Miels, Chief Commercial Officer at GSK]

Sure, Emma. Thanks, James. Quite a, yeah, a lot there. So I'll I'll cover in order and Tony jump in if I if I miss anything. I'll I'll go through Nucala first.

[Luke Miels, Chief Commercial Officer at GSK]

I think I'll touch on Pindembi because we'll we'll get questions on that. Get the markumab and Blendrep. I won't cover Bluejepa because I covered that in the opening intro. I think first with, Nucala COPD, I mean, yeah, May for seventh, PDUFA's on track. The matinee data is gonna be published very soon.

[Luke Miels, Chief Commercial Officer at GSK]

So, it's limited to what I can say, but in big picture terms, in terms of apples to apples comparison to the GP, think we're very competitive. We also had a wide spectrum of patients, the emphysema, combined emphysema, and chronic bronchitis patients, and then, you know, singular chronic bronchitis patients as well. So from a physician point of view, that's very appealing because it can be difficult to stratify these patients at time. So that's simpler for their practice. The important thing when when the results are released, the trial was designed to look at hospitalization and emergency department visits, which the GP studies didn't in their in their protocol design.

[Luke Miels, Chief Commercial Officer at GSK]

So that's an important measure when you when you look at pulmonologists and what they consider to be critical when they're employing a biologic in these in these refractory patients. If you look at market research, it's very supportive, and that's grown over time. About 83% of pulmonologists, when we show them the profile of the product, are very motivated to use use use new color and COPD. Now I would counter this with pulmonologists generally are pretty conservative in their usage of biologics. I said earlier around twenty one percent.

[Luke Miels, Chief Commercial Officer at GSK]

So I think that, you know, that needs to be, you know, in terms of your ramp factored in. The other thing we've done, of course, being second, we're looking very, very closely at Joopy, where their access is, the user base, why people are using it. So I think we're we're very much looking forward to the launch. We've had a whole successful series of indications and expansions with Nucala. So the capacity of doing this is, you know, I think we've a good track record.

[Luke Miels, Chief Commercial Officer at GSK]

So we're looking forward to having fun with with competing against Sanofi there. In terms of Penmenvi

[Tony Wood, Chief Scientific Officer at GSK]

Luke, sorry. Before Yeah. Sure. I'm just Just one additional point to stress for study. And as you say, we're looking forward to presenting the data very soon now.

[Tony Wood, Chief Scientific Officer at GSK]

Important to recognize that the study was conducted over a two year period. That is critical for a disease whose survival rate of five years is only fifty percent.

[Luke Miels, Chief Commercial Officer at GSK]

Yep. Absolutely. And I think eleven percent mortality Correct. If you are admitted, which, again, is why, you know, when when we do this surveys with physicians, they sign hospitalizations as a key parameter. But they now in terms of Penmenvi, so that's our pentavalent meningitis vaccine.

[Luke Miels, Chief Commercial Officer at GSK]

Just as a reminder, we we have a very strong position as a global leader in meningitis. And with with Bexero, our men b vaccine, we get about 75% market share in The US, and that's really driven by it's a 10 strain coverage and is really perceived to be the stronger of the two men b vaccines. That's important because when you deploy or use a pentavalent vaccine, you're then to use with the subsequent b follow-up that I explained in a minute, you need to use the b vaccine that was embedded in that pentavalent, which we believe gives us a good position. So we've passed passed the first of two steps. So FDA approval and then the ACIP recommendation on April.

[Luke Miels, Chief Commercial Officer at GSK]

The schedule that's signed off is the same as as Pfizer's, and, I mean, it is more complex, and ACIP has signaled that they intend to evolve this, which I'll come back to in a minute. But, basically, if you look at the numbers today, first shot is with ACWY, which is stipulated as a routine vaccine by ACIP in The US. So about ninety percent of kids in The US actually get that vaccine. Then when you when you sort of have these kids progress to 16 to 18 years of age, so adolescence, the schedule is that they should have ACWY as a routine. And today, about sixty percent of those kids get that vaccine, so quite a big drop off.

[Luke Miels, Chief Commercial Officer at GSK]

Now the the physician at that point based on shared clinical decision making can either use well, can use a b shot, and around thirty two percent of kids get that shot in The US. And then there's a subsequent follow-up second booster shot with with meningitis b, but only about thirteen percent of adolescents or children in The US get that one. So quite a substantial drop off from ninety percent down to thirteen percent despite the fact that b is a, you know, a very, very challenging and potentially lethal strain. So what I signed up on the other day was that instead of that ACWY b combo in after that initial ACWY shot using shared clinical decision making, the pediatrician can elect to use penta, a penta vaccine like Penmenvi, and then follow that up with a b. So if you're confused at this point, then, you know, again, a lot of pediatricians are confused.

[Luke Miels, Chief Commercial Officer at GSK]

They have to stop four vaccines. Now where ACIP has indicated where they want to go, and that's the third step, it's a simpler regime where, basically, it would be ACWY initially, but the penta and then b follow-up would be risk based. And that's an important shift because with risk based, that supports a broader use. It enables physicians to look specifically into who should be vaccinated. So for example, 18 year old going off to college would be a classic there, and it's an opportunity for us to expand coverage.

[Luke Miels, Chief Commercial Officer at GSK]

So, again, you know, initial launch now with Penmenby will be relatively small because of this change that that pediatricians and payers are waiting for. And the aim is a super signal that they will look at that in October or early next year. So, hopefully, they cover that in October. Okay. Third one.

[Luke Miels, Chief Commercial Officer at GSK]

Anything on that one, Tony?

[Tony Wood, Chief Scientific Officer at GSK]

No. You're good.

[Luke Miels, Chief Commercial Officer at GSK]

No? So dupamacumab, very, very exciting.

[Luke Miels, Chief Commercial Officer at GSK]

I think the more that this product is propelled remember, we can't promote these products. They're not approved. Physicians get access to the data through academic congresses, publications, etcetera. And, again, I think the main problem when you look at biologics is just the lack of penetration despite excellent insurance coverage, and, you know, really high burden for these patients in terms of severe disease, exacerbations, hospital admission. But still, as I said earlier, only twenty one percent of patients get a biologic.

[Luke Miels, Chief Commercial Officer at GSK]

And what's interesting is if they do get a biologic, about sixty five percent of them across biologics discontinue in the first twelve months. So to me, that's very, very attractive for a an effective long acting, you know, two shots a year, which really reduces patient burden. It gives the physician confidence that the patient has coverage, and the shot will be in The US given within the clinic so the physician has total control of efficacy in that patient. When we look at market research, it continues to strengthen. So if you I think this is a great test if we ask HCPs in Europe and The US.

[Luke Miels, Chief Commercial Officer at GSK]

In The US, Forty Five Percent, so they use it and buy buy a naive immediately, around fifty four percent in Europe. Again, that's without education promotion, etcetera. And then sixty six percent of them in both The US and EU would consider switching established patients on on biologics across to depamotamab. And then when we look at patients, six out of ten patients say that's clearly easier for them in terms of, you know, versus every two weeks that they have with dupilumab right now going to twice a year, and nine out of ten said they'd switch if their doctor recommended it. So I think we've got a a, you know, an evolving, very, very competitive product here.

[Luke Miels, Chief Commercial Officer at GSK]

You know, we've got established success in severe eosinophilic asthma. The target is well known. The profile is is established. So, again, I think that one, we we should see an encouraging launch in about yeah. I mean, in terms of the the source of patients, we'll get about you know, we're we're targeting about half of them.

[Luke Miels, Chief Commercial Officer at GSK]

That's what we wanna target initially is to get naive patients who don't have obviously complicated histories on on the product. But, again, I think the difference, the other 50%, some will come from Nucala, some will come from other products. And then finally, anything on that one, Tony?

[Tony Wood, Chief Scientific Officer at GSK]

Missed all good.

[Luke Miels, Chief Commercial Officer at GSK]

No?

[Luke Miels, Chief Commercial Officer at GSK]

Finally, on Blendrath, I mean, again, yeah, on track in terms of the July approval date. I mean, the dream seven data, I think, is when we look at market research is incredibly compelling. I think one note of caution when you do see other surveys, we're not out there promoting the product yet. So we're we're limited obviously in what we can do beyond publications and presentations. But, clearly, I think that the progression of daratumumab into the first line opens up a big opportunity for planarap in that second line, but some cautious in terms of how we introduce it.

[Luke Miels, Chief Commercial Officer at GSK]

Because if you look at the options that they have at second night right now, particularly if you're a community based hem oncologist who treats seventy percent of these patients and clearly wanna retain these patients in their practice for as long as they can, that Blendrep really is a compelling option. You know, they're not really seeing CAR T as an option in the community because of the complexity of CAR T. And I think as CAR T has evolved, the the benefit risk profile continues to become more complex. If you look at bispecifics, then, again, a very rigorous induction process, hospital admissions, complicated dosing, you know, highly frequent dosing. And I think what's increasingly emerging is this infection risk, which right now when we look at market research, we we it seems like community based hemangs are underrepresenting that versus what the data has been published so far.

[Luke Miels, Chief Commercial Officer at GSK]

So I think as they start to use those products and get experience with them, that will increase. In contrast with Blendrep, we've got a very, very well known benefit risk profile with seven thousand patients being exposed. Clearly, we know the focus needs to be on managing the ocular side effects, which are reversible. And I think the stats, Tony Mae, if you wanted to cover that in terms of just, know, how many patients are impacted, how quickly it reverses, And maybe if wanna give some color on that.

[Tony Wood, Chief Scientific Officer at GSK]

Yeah. Let me I can hear you talk. On some data before I I get into that. The reminder for everyone that we have a forty two percent reduction in risk of death from the dream seven study that is a projected thirty three months of additional life. And then just to quickly cover the numbers on the ocular side effects that are important.

[Tony Wood, Chief Scientific Officer at GSK]

Sixty six percent of the individuals on the DREAMM-seven study had no vision changes, thirty two percent had blurred vision, but that was for only eleven percent of the total time on treatment and only two percent had serious effects which were all reversible.

[Dame Emma Walmsley, CEO at GSK]

Great.

[Luke Miels, Chief Commercial Officer at GSK]

We're busy.

[Dame Emma Walmsley, CEO at GSK]

Yeah. So I think at a headline level, James, these are important launches with meaningful data for patients and prescribers. I think we are cautious in terms of materiality of contribution this year. Luke has often described the Blendrub launches go slow to go very big. And we know that whether it be there or in our ongoing emergence of oncology or indeed in respiratory, these are very material contributors to the next chapter of growth on the twenty sixth and twenty sixth to thirty one.

[Dame Emma Walmsley, CEO at GSK]

Quickly on tariffs. Look, I'm not going to add a huge amount to what's already been said. First of what's in our guidance for this year is obviously the tariffs that's already been announced. But I'd refer you to our press release where we're very specific that in the face of potential sector specific tariffs, and we obviously you know, have been very focused on preparation in a lot of detail, and we look carefully at other two three two reviews. You know, we think we have multiple levers, and we see we have multiple levers at our disposal to both navigate and mitigate this.

[Dame Emma Walmsley, CEO at GSK]

And and the three main ways we think about this are, first of all, already through the enormous amount of deliberate work that was done through the separation to create regionally resilient supply chains. You know, it was good to see, as I said, us break ground on the six manufacturing site, and most of our US products in some way touch The US supply chain as well, and we have dual sourcing when we look across other regions. Obviously, we were delighted, secondly, with the the shift in the gross margin through our deliberate intent on more specialty products. And then thirdly, it's about delivering and accelerating already identified productivity improvements across various areas in the P and L, but we definitely believe we have further opportunity there. So we are prepared.

[Dame Emma Walmsley, CEO at GSK]

We have a lot of agility and detailed work underpinning this. And we think we can navigate and mitigate in the interest of patients and GSK shareholders, which is where we're confident in our reaffirmation of outlooks. Next question, please. I'm hoping we've covered an enormous amount on the launches already, which made sure some of the others.

[Constantin Fest, SVP - Head of IR at GSK]

Next question comes from Carrie Holford from Berenberg. Please go ahead.

[Kerry Holford, Head of Global Pharma Equity Research at Barenberg]

Thank you very much. A couple for me, please. Firstly, on vaccines. I wonder if you can talk to your experience so far with the new US administration, vaccine business, demand. I guess, given the negative rhetoric, are you seeing a negative impact on the demand of your vaccines in The US, particularly within the pediatric space?

[Kerry Holford, Head of Global Pharma Equity Research at Barenberg]

And love to hear your views on whether there is a risk now that RFK junior makes it more difficult to secure future approvals perhaps here indeed at some point, a booster for Araxxi in future. So just your your feedback and your views on The US vaccines market as it stands today. And then secondly, on Medicare Part d redesign, I think you did reiterate the 400,000,000 to 500,000,000 headwind for the year. You did say, Julie, that it was within your expectations in q one. I wonder if you can quantify that.

[Kerry Holford, Head of Global Pharma Equity Research at Barenberg]

And also, do we expect around half of it still to be centered on HIV? Thank you.

[Dame Emma Walmsley, CEO at GSK]

Yeah. I mean, Julie may add to that, but I would say we are absolutely spot on where we thought we would be around the Part D impact and including by by product areas of HIV. You're right. Anything else on that?

[Julie Brown, CFO & Executive Director at GSK]

Yeah. No. I think I think it's a good summary, Carrie. We were bang on expectations. HIV is the largest part with a 50 to 200.

[Julie Brown, CFO & Executive Director at GSK]

Specialty is the next one because they tend to be the more expensive medicines, and then the balance is across vaccines and Genmed. We've treated it on a straight line basis over the quarters, so the cost of it is evenly spread throughout the year.

[Dame Emma Walmsley, CEO at GSK]

Yeah.

[Dame Emma Walmsley, CEO at GSK]

And on on vaccines, know, we we get Luke may want to add to this, but we gave, as you know, a cautious outlook on the year on vaccines. We're exactly where we thought we would be at this stage. And remember, with a really challenging comparison versus versus last year on our vaccines business, None of this takes away from our fundamental confidence in the field and our ambition for the pipeline over the medium term, and we seek to separate between speculation and actual experience. And, you know, obviously, it's been good to get the approval of and a double unanimous vote. We have to see where CDC comes out.

[Dame Emma Walmsley, CEO at GSK]

I mean, Luke, in terms of what we're seeing in terms of consumer behavior or, I mean, pediatrics, you commented actually.

[Luke Miels, Chief Commercial Officer at GSK]

Yeah. Yeah.

[Dame Emma Walmsley, CEO at GSK]

It'd be good to hear anything you wanna add.

[Luke Miels, Chief Commercial Officer at GSK]

Yeah. Sure. Thanks, Emma. And yeah, Carrie. I mean, I think there's a couple of ways I can cover this.

[Luke Miels, Chief Commercial Officer at GSK]

I mean, firstly, you know, the facts are that ACIP has just given the green light to a pediatric vaccine with Penmenby. So I think that's encouraging. Of course, it needs a signature, but I think that's a good directional sense. If you look at our established vaccines overall, which include a lot of pediatric vaccines like MMRAV, They were down a little bit, but that's really due to phasing. So ISO three phasing in Canada, Rabipur, and some EU clawbacks, whereas our MMRV vaccine in in The US, I mean, our role is up 25%.

[Luke Miels, Chief Commercial Officer at GSK]

So I think that's that's also encouraging. If you look more broadly, we do track vaccine hesitancy and attitudes to vaccines. If you look within I think, you know, one of the numbers I was looking at the other day is within a Rex fee, if someone declines a Rex fee, right, it's strongly recommended by physicians, particularly the 75 age group 75 age group. When we look at why does someone decline and not do that, it's only in seventeen percent of the cases that they say they're against the vaccine. So, you know, let's let's see in time.

[Luke Miels, Chief Commercial Officer at GSK]

But, you know, so far, so so good. I think with with Rexford, the impact is more predating the current administration. It's really a decision in June of twenty twenty four, which no doubt we'll get back to later on. But I so overall, I think, you know, Emma's point, you know, cautiously optimistic in terms of the direction that we're seeing.

[Dame Emma Walmsley, CEO at GSK]

And, you know, in terms of

[Dame Emma Walmsley, CEO at GSK]

your specific question on revax, as you know, our base case for that is five years. We the data that will be presented on that is much is gonna be coming through in 2026. And the earliest, if it's a five year base case, I mean, let's see. But that that is until 2028. Honestly, I think this will have you know, the current, if I can say, environmental uncertainty will have settled down pretty clearly by then.

[Dame Emma Walmsley, CEO at GSK]

And, obviously, you know, ongoing questions around COVID vaccination aren't pertinent for us. Next question, please.

[Constantin Fest, SVP - Head of IR at GSK]

Next question comes from Jo Walton from UBS. Please go ahead.

[Dame Emma Walmsley, CEO at GSK]

Jo?

[Jo Walton, Pharma Analyst at UBS Group]

Thank you. Can you hear me?

[Dame Emma Walmsley, CEO at GSK]

Yep. Can now.

[Jo Walton, Pharma Analyst at UBS Group]

Excellent. My two questions, I guess both for Julie. So looking at SG and A, 4% excluding the, you know, the the base comparison, and you've got such a lot of new products to launch, even allowing for the fact that in respiratory, you know, you've already got people there. As it comes to the antibiotics, as it

[Jo Walton, Pharma Analyst at UBS Group]

comes to

[Jo Walton, Pharma Analyst at UBS Group]

camlopixant, etcetera, wonder if you can just tell us how long you think you can keep that SG and A growth so low and still be utterly confident that you are giving the very best support that's required for those new products coming through? And secondly, and it's sort of tariff ish related, can you just explain to us or confirm for us that when you ship product around and you ship stuff into The US, it's largely at a sort of API type price so that any tariffs that were put on would presumably be, you know, relatively absorbable. We note that in your annual report, you do take quite a big benefit from intellectual property regime elements, and that's presumably, an ability to do that in The UK and in particular in Belgium for vaccines. So I think there is some concern that maybe when you ship your vaccines across to The US, then maybe they go off at, you know, a high price including some sort of element of royalty, and that would be more difficult to absorb. So it's just the, you know, the tax sort of and just that confirmation as to how you move your stuff around so that we can, you know, do our own work on what broader tariffs might mean to your business initially.

[Jo Walton, Pharma Analyst at UBS Group]

Thank you.

[Dame Emma Walmsley, CEO at GSK]

Mhmm. Julia?

[Julie Brown, CFO & Executive Director at GSK]

Okay. Thank you very much, Joe, for the questions. In terms of SG and A, obviously, I'm working very closely with Luke and the team on this, and I'll invite him to comment as well.

[Julie Brown, CFO & Executive Director at GSK]

We we feel we've got an opportunity. The areas we're launching products in are the areas where we've got a very strong position already, probably possibly with the exception of oncology, which we're still building. But we're very strong, as you know, in respiratory. You've referred to it already. There's a real synergy we found between Orexfi and Trelegy as an example in terms of the launch of Orexfi and the benefit also on Trelegy.

[Julie Brown, CFO & Executive Director at GSK]

So we've worked this through very carefully. You know, we do a multiyear plan. We look at the launches. We look at how we can reallocate resources from the more mature lines, and we use marketing mix models and various other tools to understand the, I guess, the response rate to the marketing investment that we're making and the field force investment we're making. And, you know, our basis is driving continued productivity, and you've seen us drive the p and l quite strongly in terms of the leverage we generated last year, you know, eight on the top and 13 on the bottom.

[Julie Brown, CFO & Executive Director at GSK]

And the same this year, we continue to do this. So, yeah, we're very committed to doing that. Look, I don't know if you want to add

[Julie Brown, CFO & Executive Director at GSK]

a comment.

[Luke Miels, Chief Commercial Officer at GSK]

I think if you if we were having this conversation five or six years ago, we'd be talking about a primary care structure, etcetera. Whereas, you know, the reality is we've evolved it extensively. And then when you I mean, the products I just covered before, these are dramatically more concentrated resourcing events, smaller sales forces, less DTC. So, yeah, very confident that we can support these products and evolve it.

[Luke Miels, Chief Commercial Officer at GSK]

And, you know, that's our that's really our core, you know, bit and brother bit bread and butter day job to do that. And, again, as the mix moves to more specialty dominated, that gets that gets easier, of course, because of the factors that Julie's just outlined.

[Dame Emma Walmsley, CEO at GSK]

Right. And just on tariff, Yeah.

[Julie Brown, CFO & Executive Director at GSK]

On the tariff points.

[Dame Emma Walmsley, CEO at GSK]

Tax.

[Julie Brown, CFO & Executive Director at GSK]

Yeah. In terms of, obviously, the supply chain, our supply chain is inherently complex. We've quite frequently, as Emma mentioned, as a result of the demerger, we've got often dual sourcing.

[Julie Brown, CFO & Executive Director at GSK]

The majority of our products are touching The US in some way through the supply chain. Including vaccines, ma'am? Including vaccines. Yes. Absolutely.

[Julie Brown, CFO & Executive Director at GSK]

And therefore, we wouldn't be in a position of, obviously, when we're we're calculating the value of the tariff. If it came, it would all be based on the customs value. And therefore, the API is actually not that relevant in terms of the pricing of this. As Emma mentioned at the beginning, we have done a lot of work on this. We've looked at multiple scenarios.

[Julie Brown, CFO & Executive Director at GSK]

We're very confident in our position, which really stems from the supply chain dual sourcing, and it also stems from the productivity initiatives, which are well underway in the company that we're totally committed to delivering.

[Jo Walton, Pharma Analyst at UBS Group]

Great. Thank you.

[Julie Brown, CFO & Executive Director at GSK]

Next question, please.

[Constantin Fest, SVP - Head of IR at GSK]

Next question comes from Graham Perry from Bank of America.

[Dame Emma Walmsley, CEO at GSK]

Hi, Graham.

[Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch]

Hi. Thanks for taking my questions.

[Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch]

I should just

[Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch]

sort of follow-up on that point on tariffs actually. So if you've got productivity initiatives there, what's incremental in those? Is R and D, for example, a target? And why wouldn't you have just been doing these before? Secondly, just wondered on Shingrix, if you could quantify the sales into China, where Ziffe with inventory?

[Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch]

And actually, do you think you could see some sales this year through the course of the remainder of the year? And then last one was just on Orexi. The thirty six month booster data that you showed was shown at Aesopan, the ISR of E Conference in Brazil, actually showed a lower antibody boost than you saw at the twenty four month data. So what gives you the confidence that the vaccine is boostable at all? Because that's sort of staying low and is at the sort of level that saw no incremental efficacy benefits at the the the second season.

[Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch]

Thank you.

[Dame Emma Walmsley, CEO at GSK]

Thanks. Well, I'll I'll come to Tony to talk about revax where we still have high confidence. That's the most likely scenario, and Luke may wanna sentence or two on Shingrix. But just to be clear in terms of productivity, of course, this is about our ongoing continuous work to improve the productivity. And I would say primarily in SG and A, where we do have sufficient spending, Luke and Julie have really emphasized.

[Dame Emma Walmsley, CEO at GSK]

Of course, we all know the best way to drive leverage is better top line, and that's going to be you know, focusing highly efficiently and effectively on our growth driving products. But there is always opportunity to do more. By the way, technology is advancing all the time to do to enable us to do more. Now there is ongoing work in terms of continue improving the productivity of r and d. And likewise, we're going as fast as possible.

[Dame Emma Walmsley, CEO at GSK]

But as Julie said, you know, our first priority is to continue to increase investment behind the acceleration of the pipeline, whether that be the delivery of the current wave or, you know, arguably, just as importantly, making sure we set ourselves robustly for ADCs for the next wave of COPD for further life cycle innovation for the accelerated delivery of the BD we're doing, which is why we want to use the settlement we delivered to increase investments in R and D later this year. So we're going at all of it as hard and fast as we can. And we see that as one of the levers to pull as we navigate through potential scenarios, which we absolutely do take into account with our modeling forward. But Tony, do want to quickly comment on revax and lube runtime sentiment side of China?

[Tony Wood, Chief Scientific Officer at GSK]

Just a couple of quick points. And Graham, look, as you appreciate, there's no vaccine efficacy correlates established yet. Just to remind everyone in terms of the three season vaccine efficacy data that we have in the lower respiratory tract population, we go from eighty three percent efficacy in season one to forty eight in season three. So we are seeing waning. The immunogenicity point that you raise is a baseline effect.

[Tony Wood, Chief Scientific Officer at GSK]

And if you stratify individuals within that study by their baseline, you see a greater boost with lower baseline.

[Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch]

Great.

[Luke Miels, Chief Commercial Officer at GSK]

Yeah. Thanks, Graham. I mean, on China, look, I've described as a work in progress, but we are making progress, but it takes time. I think this you know, we have the right strategic partner. We've reshaped the arrangement, but I think the macro and POV point of vaccination dynamics, we're watching very closely, but we are seeing encouraging trends.

[Luke Miels, Chief Commercial Officer at GSK]

We had around $5,054,000,000 sales in China in in q one, and we're we're maintaining a market share of about, you know, two thirds versus Ganway, which is good because I

[Luke Miels, Chief Commercial Officer at GSK]

think that the one third

[Luke Miels, Chief Commercial Officer at GSK]

of Ganway patients are not our target business anyway because of their out of pocket sensitivity. So, you know, if we have deliveries and we're watching this closely, they'll be for the second half.

[Dame Emma Walmsley, CEO at GSK]

Yeah. And I think we've been pretty cautious in our outlook for China for this year because of the broader macro, as you all understand. Next question, please.

[Constantin Fest, SVP - Head of IR at GSK]

Next question comes from Simon Baker from Redburn.

[Simon Baker, Partner at Redburn Atlantic]

Two, if I may, please. Firstly, on the PrEP market. Was a strong performance by Aperture. Gilead reported strong numbers for Descovy, and they cited broader awareness of prevention and actually cited your promotional activity. So I wonder if you could just give us an update on the dynamics within the PrEP market in terms of switches versus new to prevention.

[Simon Baker, Partner at Redburn Atlantic]

And related to PrEP and The US, is there any impact from the shutdown of USAID on clinical trial recruitment? I was thinking of studies like the PALISAID study, which is still showing as ongoing recruiting, and others have suggested that USAID is quite handy in terms of trial enrollment and coordination. So any thoughts on that would be helpful. And then one for Tony on cambopixib. We've got the CALM-one study coming up in the second half of this year.

[Simon Baker, Partner at Redburn Atlantic]

I just wonder what a good result looks like there? And how relevant is the data that was recently published on the SUD study as a road map for the likely outcome of Phase III and what constitutes a good result? Thanks so much.

[Dame Emma Walmsley, CEO at GSK]

Right. So David and Tony, please.

[David Redfern, Chief Strategy Officer at GSK]

So thanks, Simon. On the clinical trial side, I mean, there has been some reduction in funding from the federal government to different investigators and different clinical trial networks. That hasn't specifically affected us. It has had some impact across pediatric studies that have been going on. And obviously, we're working with the community to do what we can there.

[David Redfern, Chief Strategy Officer at GSK]

But there's been no direct impact on GSK or Veev. I think on the prep market, I mean, through Q1, it's definitely continued the trend. We're very pleased with the performance of as I said in my remarks over 21,000 patients now on. We continue to build this market and we know that firstly it is an underdeveloped market. Only a third of Americans that could potentially benefit from prep are getting prep.

[David Redfern, Chief Strategy Officer at GSK]

So there's a huge market development opportunity. And we recognize obviously competition will go up in the second half of the year, but I think that competition could help expand the market. And there's definitely an opportunity to switch more of the oral patients into long acting because we know that the persistence and therefore the efficacy is much greater. And we're very pleased to have two real world evidence studies at CROI that I think demonstrated that very clearly in The U. S.

[David Redfern, Chief Strategy Officer at GSK]

And

[David Redfern, Chief Strategy Officer at GSK]

Brazil with the pillar and in prep studies that showed one hundred percent efficacy, but importantly very strong long persistence. So it's always work in progress, and it's a big change for sexual health clinics and and physicians to move from oral prep to long acting prep and there's set up and a whole number of more complex administrative procedures, but progressing well.

[Dame Emma Walmsley, CEO at GSK]

Great. Betty, coming?

[Tony Wood, Chief Scientific Officer at GSK]

Yeah. Just on on Camelopex and Simon, I'm not going to disclose what we set as the clinically significant baselines for the CALM studies other than to say that both studies were designed with an objective of showing a clinically significant effect on cough. COM1 will read out this year, COM2 will read out next year. And of course, we won't be disclosing the broader data across those two studies until we pool them. This is typical for our Phase three studies.

[Tony Wood, Chief Scientific Officer at GSK]

Just a quick reminder for everyone about why we're interested in Canlopixin. This is a molecule whose selectivity profile is many orders of magnitude in excess of related agents and Simon to pick up on that. That is very clearly seen in the SOOTH study in which the taste disturbance which has been a challenge for others was tenfold lower than that for comparator agents. Just a quick reminder about Soothe for you. That was a phase two study looking at individuals with 25 coughs per hour.

[Tony Wood, Chief Scientific Officer at GSK]

And what we were able to show with canlopixant in that study of both the fifty and two hundred milligram doses that a BID regimen achieved a 34% placebo adjusted reduction in the twenty four hour COF frequency.

[Dame Emma Walmsley, CEO at GSK]

Great. Thank you. Couple more?

[Constantin Fest, SVP - Head of IR at GSK]

Yep.

[Constantin Fest, SVP - Head of IR at GSK]

Next question comes from Rajan Sharma from Goldman Sachs.

[Dame Emma Walmsley, CEO at GSK]

Hi,

[Dame Emma Walmsley, CEO at GSK]

Rajan.

[Rajan Sharma, Executive Director at Goldman Sachs]

Hi. Thanks for taking my questions. Just a couple left actually. Just ahead of the blend rep PDUFA, have you had any interactions with the agency on the the potential REMS requirement?

[Rajan Sharma, Executive Director at Goldman Sachs]

And if not, could you potentially just talk to your base case assumption for REMS and how potential scenarios here could influence uptake? And then secondly, just one capital allocation priorities. Just given that valuations are significantly lower than perhaps a year or so ago, is there a potential for you to be more active on the BD front? Or is the macro backdrop, sorry, like to be a limiting factor? Thanks.

[Dame Emma Walmsley, CEO at GSK]

Yeah. Very quickly, the you're absolutely right. Well, our appetite for BD is remains high. We think there may be some opportunities in this environment. Obviously, we have to be cautious about assumptions on the row, but that's a question of discipline and returns.

[Dame Emma Walmsley, CEO at GSK]

But we're we continue to be busy reviewing and connecting. So that's still definitely a priority for us. In in on on the sort of scale of what you've seen and pace of what you've seen us doing, we're pleased to get IDRX away, but certainly a key priority and capital allocation going forward. Luke, I wonder whether well, actually, let's go to Tony first just in terms of FDA, but we're not gonna get ahead of ourselves on that considering it's not very far away, but on your comments on on REMS. And and Luke, maybe you could just say very briefly how you see that in terms of uptake because I know it's something you really wanna invest the time in getting right.

[Tony Wood, Chief Scientific Officer at GSK]

Yeah. And I might I might just bridge that, Luke, with The UK approval that we've got.

[Dame Emma Walmsley, CEO at GSK]

Yeah.

[Tony Wood, Chief Scientific Officer at GSK]

And, obviously, our regulatory interactions are confidential, so I'm not gonna get into the details of those. But it's probably worth our stressing that as as I'm sure you're aware, the REMS are not uncommon for new oncology medicines.

[Tony Wood, Chief Scientific Officer at GSK]

You have, for example, for Herceptin, the need for cardiac scans for in HER2, the management of interstitial lung disease and doxorubicin cardiomyopathy. So within that, it's I think useful to take a look at The UK approval, which requires eye examination for each of the first four doses associated with blenrep. I'll let Luke speak to that and the opportunity for us to set up then relationships with high street providers to complete that. I won't repeat what I said earlier, but the important point is really an understanding of the data in terms of efficacy and resolution of side effects and their severity in

[Tony Wood, Chief Scientific Officer at GSK]

in the ocular events.

[Luke Miels, Chief Commercial Officer at GSK]

Sure. Thanks, Tony. I mean, are obviously something that familiar to hem oncologists. There's a number of agents used in in multiple myeloma that have REMs.

[Luke Miels, Chief Commercial Officer at GSK]

I won't break down our assumptions on various REM designs, but I think common sense would say that, you know, the less burdensome are more supportive versus the more complicated. But we're spending a lot of time, and let's go back to my earlier point, which is it's really about supporting the physician. We understand a lot more about the dosing of this product and dose holes, etcetera. So the the the behavior of the product and how it you know, how how the ocular dimension can be managed through dose holes and and really accessing that overall survival. It's an important component.

[Luke Miels, Chief Commercial Officer at GSK]

We're also spending a lot of time on the nuts and bolts of how do patients go through the system. How do you make it as easy as possible for a hem oncologist when they've got that patient in front of them who's just progressed on daratumumab? How do you make it as easy as possible that they can put their practice machinery in place in a community setting to get that patient on on to Blendrep? We've also looked at a lot of things like collaborations with optometry groups. We know that ninety percent of patients in The US or potential patients in The US with multiple myeloma live within half an hour of of an eye care professional, which is not surprising because most of them, obviously, the older need some form of glasses, like probably a lot of people on this call.

[Luke Miels, Chief Commercial Officer at GSK]

So, again, we're being very thoughtful about how we navigate that, and I think that's all we can say at this point beyond what Tony has covered with The UK.

[Dame Emma Walmsley, CEO at GSK]

Brilliant. Thanks. And for the reference to our aging profile. Time for one more last question, think, Constantin?

[Constantin Fest, SVP - Head of IR at GSK]

Yes. That's correct. Last question, please, comes from Sarita Kapila from Morgan Stanley.

[Sarita Kapila, Co-Head European Pharma Equity Research at Morgan Stanley]

Just a quick one from me on your long term HIV strategy. Do you have any plans to develop longer acting orals as we've seen from some of your competitors? And if these long acting orals are successful, how do you see that impacting your competitive positioning given the double down on injectable pipeline? Thank you.

[Dame Emma Walmsley, CEO at GSK]

Thanks.

[David Redfern, Chief Strategy Officer at GSK]

Great. Thanks for the question. I think we are primarily focused on generating long longer acting injectables. Very pleased with both the progress with Cabinuva, which obviously is the first mover in long acting injectable treatment. Great

[David Redfern, Chief Strategy Officer at GSK]

to see

[David Redfern, Chief Strategy Officer at GSK]

the growing momentum there both in The U. And Europe. And we are focused around taking that forward of both four month options and then potentially longer options six months and so forth. I'm very excited with the data we presented at CROI on 01/1984 which really showed rapid and potent antiviral activity and very importantly, a very broad resistance profile. We have more to say on that next year, but I think we're getting increasingly excited about one eight four as being a a significant potential medicine.

[David Redfern, Chief Strategy Officer at GSK]

In terms of the weekly orals and so forth, I mean, we're obviously monitoring that. I think they will likely largely cannibalize daily orals, and we'll have to see how that that goes. There's different views and different levels of market research on patient preference and compliance and so forth. But our focus at this point is really building on the first mover long acting treatment advantage we have. And we see very clear patient preference to go there.

[Dame Emma Walmsley, CEO at GSK]

Great. So thanks, David, and thank you everyone for joining the call. We are only at Q1, but it's great to have a strong start for GSK. We're very much on track to deliver our 2025 outlooks despite the weather with strong growth in our biggest business in Specialty Medicines and, of course, most importantly, really exciting continued pipeline progress. So we look forward to catching up with you in the coming days and months.

[Dame Emma Walmsley, CEO at GSK]

And thanks for joining the call.

Participants

Executives

• Constantin Fest, SVP - Head of IR
• Dame Emma Walmsley, CEO
• Luke Miels, Chief Commercial Officer
• David Redfern, Chief Strategy Officer
• Julie Brown, CFO & Executive Director
• Tony Wood, Chief Scientific Officer

Analysts

• James Gordon, Vice President at JP Morgan
• Kerry Holford, Head of Global Pharma Equity Research at Barenberg
• Jo Walton, Pharma Analyst at UBS Group
• Graham Parry, Senior European Pharmaceuticals & Healthcare Equity Analyst at Bank of America Merrill Lynch
• Simon Baker, Partner at Redburn Atlantic
• Rajan Sharma, Executive Director at Goldman Sachs
• Sarita Kapila, Co-Head European Pharma Equity Research at Morgan Stanley