Slide 1: Q2 2020 Results
do more feel better live longer Q2 2020 Results 29 July 2020
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This presentation may contain forward-looking statements. Forward-looking statements give the Group’s current expectations or forecasts of future events. An investor can identify these statements by the fact that they do not relate strictly t
Slide 3: Agenda
Agenda Q2 2020 progress Emma Walmsley, Chief Executive Officer Q2 2020 financial results Iain Mackay, Chief Financial Officer R&D update Hal Barron, Chief Scientific Officer, President R&D Summary Emma Walmsley, Chief Executive Officer Q&A: Luke Miels, President Global Pharmaceuticals David Redfern,
Slide 4: Emma Walmsley, CEO
Emma Walmsley, CEO 29 July 2020
Slide 5: Q2 progress
Q2 progress Strong momentum on strategic priorities and response to COVID-19 ✔ Zejula approved in US for 1LM ovarian cancer in all comers ✔✔ FDA ODAC voted 12-0 in favour of positive risk/benefit profile for regardless of biomarker status Strengthened the pipeline Innovation ✔✔ belantamab mafodotin;
Slide 6: Comprehensive approach to respond to COVID-19
Comprehensive approach to respond to COVID-19 • Development of adjuvanted vaccines underway, including with Sanofi Phase 1 started in Clover and Medicago collaborations Adjuvanted Novel Expanded capacity for 1 billion adjuvant doses in 2021 vaccines therapeutics Supply contract agreed with UK;
Slide 7: Q2 performance
Q2 performance Pandemic impact; confident in underlying demand for key products Pharmaceuticals Respiratory products +16%* Group sales -3%, -5% CER HIV -3%; 2DRs £181m, > +100% pro forma -10% Benlysta +15% Zejula £77m, +32% 22.9% Adjusted Vaccines operating margin; -29% CER Shingrix £323m, -19% -5.3
Slide 8: Strong underlying demand and outlook for key growth drivers
Strong underlying demand and outlook for key growth drivers Vaccines: focus on driving recovery in Respiratory: market leading vaccination rates performance with Trelegy and Nucala SHINGRIX: Q2 sales of £323 million; TRELEGY: Q2 sales of £194m, +58% CER Early signs of recovery in certain Growing sha
Slide 9: Q2 2020 financial results
Q2 2020 financial results Iain Mackay, CFO
Slide 10: Headline results
Headline results Reported Pro forma Reported Pro forma Q2 2020 H1 2020 % % % % £m AER CER CER £m AER CER CER Turnover 7,624 (2) (3) (10) 16,714 8 8 - Total operating profit 2,850 92 90 n/a 4,864 67 66 n/a Total EPS 45.5p >100 >100 n/a 77.0p >100 >100 n/a Adjusted operating profit 1,749 (19) (21) (27
Slide 11: Results reconciliation
Results reconciliation Q2 2020 Disposals, significant Total Intangible Intangible Major Transaction legal and Separation Adjusted results amortisation impairment restructuring related other costs results Turnover 7.6 7.6 (£bn) Operating 2.9 0.2 0.1 0.2 0.3 (2.0) <0.1 1.7 profit (£bn) EPS 45.5 3.2 1.
Slide 12: Pharmaceuticals
Pharmaceuticals Q2 2020 Sales Operating margin Sales All figures £m -5% CER -540bps CER New launches: Trelegy, Nucala, Juluca, -5% AER -540bps AER Dovato 4,307 4,102 29.2% Continued strong Benlysta performance 752 COVID-19 destocking 883 23.8% Impact of generic albuterol substitutes 1,209 Reduced de
Slide 13: Vaccines
Vaccines Q2 2020 Sales Operating margin Sales All figures £m -1570bps CER -29% CER -1520bps AER COVID-19 impact -29% AER 1,585 38.6% Drag from travel vaccines divestment 386 1,133 235 323 612 23.4% 167 Operating profit 947 265 COVID-19 impact 628 Q219 Q220 Q219 Q220 Flu Meningitis Shingrix Establish
Slide 14: Consumer Healthcare
Consumer Healthcare Q2 2020 Sales Operating margin Sales All figures £m -6% CER VMS consumer usage -120bps CER 2,563 Voltaren OTC switch in US 2,389 22.9% 651 21.8% Stocking ahead of systems cutover 1,917 639 Unwind of Q1 pantry loading in EU/US 20.4% 651 542 529 Impact of divested brands 240 587 38
Slide 15: Sales and Adjusted operating margins
Sales and Adjusted operating margins Q2 2020 Sales Adjusted operating margin All figures £m Q2 2019 sales at '19 rates 7,809 Q2 2019 operating margin 27.8% Pro Forma sales at '19 rates 655 Pro forma impact on margin 0.2% 2019 sales at '19 rates (PF) 8,474 Q2 2019 Proforma margin 28.0% Pharma down -5
Slide 16: Adjusted operating profit to net income
Adjusted operating profit to net income Continued delivery of financial efficiency Q2 19 Q2 20 £m £m Operating profit 2,171 1,749 Net finance expense (220) (227) Share of associates (4) 19 Tax (300) (316) Tax rate 15.4% 20.5% Minorities (138) (267) Net income 1,509 958 16
Slide 17: Free cash flow of £2.5bn
Free cash flow of £2.5bn £m Key Drivers H119 free cash flow 535 Higher CCL 12 Favourable working capital, RAR and Higher net operating cash** 1,718 lower seasonal increase of inventory Proceeds relating to Consumer Lower net Capex* 759 divestments, and ofatumumab Higher restructuring payments 46 Oth
Slide 18: 2020 guidance
2020 guidance Maintaining guidance Pharma & Consumer performance on track Adjusted EPS Delivering Integration & Restructuring programmes Down 1 to 4% CER Disciplined focus on cost management 3 month delay to recovery: Key risk is further delay up to 5% adverse impact to recovery in vaccination rates
Slide 19: R&D update
R&D update Dr Hal Barron, Chief Scientific Officer
Slide 20: In July 2018 we committed to strengthening the pipeline
In July 2018 we committed to strengthening the pipeline • Drive organic pipeline growth by focusing on assets Science Strengthening our R&D with the highest probability of success and lifecycle potential pipeline through a focus x • Augment the pipeline through Business Development on science relate
Slide 21: Over the last two years we have made significant progress
Over the last two years we have made significant progress • Over 40% of our POC studies have been positive • Enabling us to initiate 9 potentially registrational studies • We delivered 17 positive pivotal studies • We are on track for 14 approvals, including up to 5 NMEs in 2020 • We focused the pip
Slide 22: Biopharma pipeline of 35 medicines and 15 vaccines
We now have a biopharma pipeline of 35 medicines and 15 vaccines (>75% focused on immune-modulation) First time in human (Phase 1) Proof of concept (Phase 1b/2) Pivotal (Phase 2/3) 3858279* (CCL17 inhibitor) OA pain 3640254 (maturation inhibitor) HIV Benlysta3 + Rituxan SLE** 3745417 (STING agonist)
Slide 23: Three new vaccine candidates starting Phase 3 studies
Three new vaccine candidates starting Phase 3 studies Respiratory syncytial virus (RSV) MenABCWY • Burden highest in young children and older adults • Protection gap against MenB in the US2 • 177,000 hospitalisations and 14,000 deaths in older adults in the US annually • 50% of infants infected befo
Slide 24: Redefining HIV PrEP with long-acting cabotegravir
Redefining HIV PrEP with long-acting cabotegravir Cabotegravir for PrEP • Long acting, injectable cabotegravir administered Hazard Ratio (95% CI) every two months is 66% more effective than daily pills • Working with the FDA and other regulatory agencies to prepare a file Anticipated submission 1H 2
Slide 25: Developing solutions to help prevent and treat COVID-19
Developing solutions to help prevent and treat COVID-19 Bringing our unique adjuvant Accelerating mAb GSK‘136 Studying otilimab for severe to vaccines collaborations with Vir into Phase 2/3 COVID-19 pulmonary disease • Phase 1 started in July combining • Preclinical data shows potential to be • GM-C
Slide 26: World class Infectious Diseases portfolio
Our focus on immunology is resulting in a world class Infectious Diseases portfolio First time in human (Phase 1) Proof of concept (Phase 1b/2) Pivotal (Phase 2/3) Marketed 3858279* (CCL17 inhibitor) OA pain 3640254 (maturation inhibitor) HIV Benlysta3 + Rituxan SLE** Shingrix 3745417 (STING agonist
Slide 27: Strong oncology portfolio, programmes modulating the immune system
We have built a strong oncology portfolio with 13 of 14 programmes modulating the immune system First time in human (Phase 1) Proof of concept (Phase 1b/2) Pivotal (Phase 2/3) 3858279* (CCL17 inhibitor) OA pain 3640254 (maturation inhibitor) HIV Benlysta3 + Rituxan SLE** Oncology 3745417 (STING agon
Slide 28: Anti-CD96 (GSK'608) - a potential first-in-class antibody
Anti-CD96 (GSK’608) - a potential first-in-class antibody CD96 negatively regulates T and NK cell function; 23andMe validated the CD96-CD226-TIGIT axis • CD96-CD226-TIGIT axis plays important roles in NK and T cell biology, and cancer immune surveillance • CD155 is upregulated in many solid tumours
Slide 29: Belantamab mafodotin on track to be the first approved anti-BCMA agent
Belantamab mafodotin on track to be the first approved anti-BCMA agent Positive opinions from the FDA and DREAMM-5: exploring belantamab mafodotin EMA on the benefit/risk profile combined with γ-secretase inhibitors (GSI) 1) Blocking BCMA receptor 2) Delivery of cytotoxic, MMAF 3) Enhancing antibody
Slide 30: Leader in synthetic lethality
In July 2018 we said we were going to be a leader in synthetic lethality Results from the PRIMA study proved the value of functional genomics and the promise of targets identified through synthetic lethality screens • Not only did PRIMA demonstrate clinically significant benefit in HRD+ due to Zejul
Slide 31: Building a world class synthetic lethal pipeline and unit
Building a world class synthetic lethal pipeline and unit December 2018 July 2019 July 2020 • Announced the Tesaro acquisition • Announced headline results from PRIMA • Announced the Broad Institute and Boston SL unit Exploring Zejula’s potential in Expanding our synthetic lethal World leading colla
Slide 32: A stronger pipeline with a clear focus on immunology
A stronger pipeline with a clear focus on immunology First time in human (Phase 1) Proof of concept (Phase 1b/2) Pivotal (Phase 2/3) 3858279* (CCL17 inhibitor) OA pain 3640254 (maturation inhibitor) HIV Benlysta3 + Rituxan SLE** Respiratory / auto-immune / other 3745417 (STING agonist) cancer 322883
Slide 33: BD has been key to augmenting our pipeline
BD has been key to augmenting our pipeline and providing access to differentiating technologies Strengthening the pipeline in key areas of Best-in-class functional genomics to help focus – immunology and genetics identify better targets + Zejula (PARP inhibitor) • Formed Laboratory for Genomics Rese
Slide 34: Pipeline delivered by a more engaged, focused and collaborative organisation
This strengthened pipeline is being delivered by a more engaged, focused and collaborative organisation Significant shift in culture Simplified governance to Increased focus on lifecycle to within R&D increase our agility maximise patient value improvement in employee +8% engagement scores for R&D*
Slide 35: Our upcoming R&D milestones
Our upcoming R&D milestones 2H 2020 1H 2021 2H 2021 Anticipated Fostemsavir HIV Benlysta lupus nephritis Nucala NP approval dostarlimab for dMMR/MSI-H recurrent EC1 Nucala HES dostarlimab dMMR pan-tumor Trelegy asthma daprodustat anaemia - JAPAN ONLY belantamab mafodotin 4L MM (DREAMM-2) Potenti
Slide 36: Staying focused on long term priorities
Staying focused on long term priorities While bringing solutions to COVID-19 2020 focus Innovation New GSK: a leading • Execution of launches • Continue to strengthen pipeline biopharma company with R&D focused on science of the – Progress immune system, genetics and pipeline advanced technologies P
Slide 37: Appendix
Appendix
Slide 38: Sales and Adjusted operating margins
Sales and Adjusted operating margins H1 2020 Sales Adjusted operating margin All figures £m H1 2019 sales at '19 rates 15,470 H1 2019 operating margin 28.0% Pro Forma sales at '19 rates 1,320 Pro Forma impact on margin 0.2% H1 2019 sales at '19 rates (PF) 16,790 H1 2019 Pro Forma margin 28.2% Pharma
Slide 39: Our R&D pipeline
Innovation Our R&D pipeline 35 medicines and 15 vaccines Phase 1 Phase 1 Expansion/Phase 2 Pivotal/Registration 3858279* (CCL17 inhibitor) OA pain 3640254 (maturation inhibitor) HIV Benlysta3 + Rituxan SLE** Rx Vx 3745417 (STING agonist) cancer 3228836* (HBV ASO) HBV cabotegravir** LA + rilpivirine*
Slide 40: Upcoming milestones that will inform our progress
Innovation Upcoming milestones that will inform our progress 1H2020 2H 2020 1H 2021 2H 2021 1H 2022 Anticipated Nucala HES Nucala NP Benlysta + Rituxan SLE bintrafusp alfa BTC dostarlimab combo with CT 1L EC (RUBY) submission Benlysta lupus nephritis dostarlimab dMMR pan-tumor Zejula + dostarlim
Slide 41: Changes in portfolio since Q1 2020
Innovation Changes in portfolio since Q1 2020 Changes to pipeline New to Phase I expansion/ New to Phase I New to Pivotal New to Registration Phase II GSK2798745 (TRPV4 ) DME Otilimab (aGM-CSF) COVID-19 GSK6097608 (CD96) cancer GSK4182136 COVID-19 – study start expected Q3 S. aureus vaccine 2020 Rem