Gsk Plc · LSE:GSK
Gsk — Q3 2020 Earnings Presentation
36 slides from Gsk's earnings presentation, Oct 28, 2020
Slide 1: Q3 2020 Results
Q3 2020 Results 28 October 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 Q3 2020 progress Emma Walmsley, Chief Executive Officer Q3 2020 financial results Iain Mackay, Chief Financial Officer Commercial execution Luke Miels, President Global Pharmaceuticals David Redfern, Chief Strategy Officer, Chairman of ViiV Consumer Healthcare Brian McNamara, Chief Executive
Slide 4: Emma Walmsley, CEO
Emma Walmsley, CEO 28 October 2020
Slide 5: Q3 progress
Q3 progress Resilient performance, strong momentum on strategic priorities and COVID-19 response Blenrep US approval and launch in multiple myeloma; EC approval Strengthened and ✔ and first European launches ✔ Innovation Trelegy asthma US approval; Nucala progress on new advanced the ✔ indications*;
Slide 6: Q3 performance
Q3 performance Pharma and Consumer growth drivers and cost control offset pandemic impacts Pharmaceuticals New & Specialty Pharma +12%* Group sales -3%, -3% CER Respiratory products +26%** pro forma -5% HIV flat; 2DRs £222m, +94% Benlysta +13%; Oncology £99m, +58% 30.8% Adjusted Vaccines Shingrix £3
Slide 7: Progress on portfolio of COVID-19 solutions
Progress on portfolio of COVID-19 solutions 3 vaccine approaches in the clinic 2 therapeutics in pivotal studies – Sanofi’s recombinant protein-based – Vir7831: neutralizing human monoclonal antibody, antigen + GSK’s AS03 adjuvant specifically engineered for SARS-CoV-2 – FTIH studies initiated Septe
Slide 8: Q3 2020 financial results
Q3 2020 financial results Iain Mackay, CFO
Slide 9: Headline results
Headline results Reported Pro forma Reported Pro forma Q3 2020 YTD 2020 % % % % £m AER CER CER £m AER CER CER Turnover 8,646 (8) (3) (5) 25,360 2 4 (2) Total operating profit 1,858 (13) (2) n/a 6,722 33 37 n/a Total EPS 25.0p (20) (9) n/a 102.0p 51 55 n/a Adjusted operating profit 2,665 (4) 4 2 7,08
Slide 10: Results reconciliation
Results reconciliation Q3 2020 Disposals, significant Total Intangible Intangible Major Transaction legal and Separation Adjusted results amortisation impairment restructuring related other costs results Turnover 8.6 8.6 (£bn) Operating 1.9 0.2 0.1 0.3 0.4 (0.2) <0.1 2.7 profit (£bn) EPS 25.0 3.1 1.
Slide 11: Pharmaceuticals
Pharmaceuticals Q3 2020 Sales Operating margin Sales All figures £m +470bps CER New launches: Trelegy, Nucala, Dovato, +390bps AER Juluca, Zejula Q3 2020 Total : £4,192m: -3% CER; -7% AER 28.0% Sustained Benlysta growth +12% CER 24.1% +8% AER Impact of generics on Established -18% CER products -23%
Slide 12: Vaccines
Vaccines Q3 2020 Sales Operating margin Sales All figures £m -500bps CER -9% CER -610bps AER Pandemic environment impact -12% AER 2,308 50.3% Flu sales execution 371 2,032 445 44.2% 535 374 371 1,162 363 899 Operating profit 1,031 Operating leverage from pandemic- 850 related sales decline Key brand
Slide 13: Consumer Healthcare
Consumer Healthcare Q3 2020 Sales Operating margin Sales All figures £m Continuing +3% CER Total -6% CER VMS consumer usage -90bps CER 2,733 Sensodyne strength 24.2% 2,526 2,422 24.3% 709 Voltaren OTC switch in US 22.3% 709 702 Reversal of Q2 stocking following systems cutover 581 526 Impact of dive
Slide 14: Sales and Adjusted operating margins
Sales and Adjusted operating margins Q3 2020 Sales Adjusted operating margin All figures £m Q3 2019 sales at '19 rates 9,385 Q3 2019 operating margin 29.7% Pro Forma sales at '19 rates 213 Pro Forma impact on margin 0.2% 2019 sales at '19 rates (PF) 9,598 Q3 2019 Pro Forma margin 29.5% Pharma down -
Slide 15: Adjusted operating profit to net income
Adjusted operating profit to net income Continued delivery of financial efficiency Q3 19 Q3 20 £m £m Operating profit 2,786 2,665 Net finance expense (206) (197) Share of associates 17 11 Tax (411) (417) Tax rate 15.8% 16.8% Minorities (275) (287) Net income 1,911 1,775 15
Slide 16: Free cash flow of £2.3bn
Free cash flow of £2.3bn £m Key Drivers Q319 YTD free cash flow 2,474 Higher CCL 4 Favourable RAR and trade receivables Higher net operating cash** 162 offset by adverse exchange impacts Proceeds relating to Consumer Lower net Capex* 502 divestments, and ofatumumab Higher restructuring payments 153
Slide 17: 2020 guidance
2020 guidance Pharma & Consumer performance on track FY 2020 guidance Sustained recovery in adult vaccination rates Adjusted EPS Down 1 to 4% CER Delivering Integration & Restructuring programmes Tracking to lower end of range Disciplined focus on cost management All expectations and targets regardi
Slide 18: Commercial execution
Commercial execution Luke Miels President Global Pharmaceuticals David Redfern Chief Strategy Officer, Chairman of ViiV
Slide 19: Nucala: market leadership with upside opportunity
Nucala: market leadership with upside opportunity Leading in eosinophilic indications Global leader in IL-5 market share Moving Quarterly Total (MQT) Market Share* ▪ £251m in Q3, +29% CER; remains the IL-5 market leader GSK - Nucala globally Competitor X ▪ Growth opportunity: 72% ▪ 12-24m with SEA1
Slide 20: Trelegy: growing the market with leading performance
Trelegy: growing the market with leading performance Strong performance with Market leading in US room to grow and other major markets Unmet need remains ▪ £194m in Q3, +45% US triple therapy market share Trelegy Share of Triple Therapy Patients2 6.4m ▪ Substantial COPD growth opportunity COPD patie
Slide 21: Benlysta: consistent growth in an expanding market
Benlysta: consistent growth in an expanding market LCM driving sustained leadership in lupus Considerable unmet patient need remains ▪ £186m in Q3, +13% CER ▪ Life cycle management driving future growth 330k people in the US have SLE ▪ Lupus Nephritis (LN): US approval expected by year end 250k diag
Slide 22: Zejula: strong label and commercial execution drive share in 1LM OC
Zejula: strong label and commercial execution drive share in 1LM OC Best-in-class PARPi; opportunity for growth Increasing new patients starts in 1LM OC ▪ £92m in Q3, +47%; positive CHMP opinion for PRIMA 1LM New OC Patients on PARPi4 ▪ 1st PARP inhibitor to show PFS1 in first line ovarian 90 Lynpar
Slide 23: Blenrep: first-in-class treatment for multiple myeloma
Blenrep: first-in-class treatment for multiple myeloma Positive response, encouraging demand Development in earlier lines continues ▪ REMS fully operationalised; >500 HCPs enrolled ▪ Studying optimal dosing volume and scheduling ▪ 200+ patients enrolled in REMS (end Q3) ▪ Investigating synergistic c
Slide 24: Shingrix: encouraging recovery of demand trends
Shingrix: encouraging recovery of demand trends US vaccination rates at pre COVID levels US demand trends recovering Shingrix US Quarterly Volume vs. US Quarterly Sales ▪ £374m in Q3, -25% CER 6M £800k 5M ▪ US TRx recovered to pre COVID and Q3 2019 levels 4M £600k US Sales by quarter end 3M £400k US
Slide 25: Vir collaboration: potential best-in-class antibody for COVID-19
Vir collaboration: potential best-in-class antibody for COVID-19 Differentiated antibody approach Significant unmet need ▪ Clear need for therapeutics despite active vaccine ▪ Vir-7831 potently neutralises SARS-Cov-2 development programmes ▪ High barrier of resistance1 due to unique binding properti
Slide 26: Strong momentum on 2DRs
Strong momentum on 2DRs Strong execution across portfolio US DTG NBRx share outpacing DTG TRX share - Leading share of voice in US and Europe 29% 28% - Strong execution with 2DRs, driving uptake (NBRx: 27% >8%) 26% 25% - Dovato US label expansion to include TANGO data; 24% driving increased share in
Slide 27: Consumer Healthcare
Consumer Healthcare Brian McNamara, CEO GSK Consumer Healthcare
Slide 28: Integration update
Integration update Successful to date and firmly on track Key milestones Synergies Divestment ▪ 96% of PCH sales on our book ▪ £500m 2022 annual synergy ▪ Transactions signed to meet with one system target remains on track, with £1 billion proceeds target1 40% total in 2020, c.80% in ▪ 71 systems cu
Slide 29: World class portfolio with category leading positions
World class portfolio with category leading positions Top 4 categories, additionally #1 positions in Digestive Health and Smoker’s health1 Therapeutic Vitamins, Minerals Pain Relief Respiratory Oral Health and Supplements Category position #1 #1 #1 #1 29 1 All categories ex Therapeutic Oral Health b
Slide 30: Consumer Healthcare YTD Performance
Consumer Healthcare Ytd Performance Revenue +6%1, gaining share overall2 , with strong ecommerce growth Vitamins, ▪ Beneficiary of continued consumer focus on health and wellness Minerals and ▪ Strong performance from Centrum, Emergen-C and Caltrate Supplements ▪ On proforma basis sales continued to
Slide 31: Maintaining momentum; delivering long term priorities
Maintaining momentum; delivering long term priorities While bringing solutions to COVID-19 2020 focus New GSK: a leading Innovation biopharma company with ✔ – Progress pipeline R&D focused on science of the immune system, genetics and – Drive operating ✔ advanced technologies performance – Successfu
Slide 32: Appendix
Appendix
Slide 33: Sales and Adjusted operating margins
Sales and Adjusted operating margins Q3 YTD 2020 Sales Adjusted operating margin All figures £m 2019 sales at '19 rates 24,855 2019 operating margin 28.7% Pro Forma sales at '19 rates 1,532 Pro Forma impact on margin 0.0% 2019 sales at '19 rates (PF) 26,387 2019 Pro forma margin 28.7% Pharma down -1
Slide 34: Our R&D pipeline
Innovation Our R&D pipeline 40 medicines and 18 vaccines 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** Rx Vx 3745417 (STING agonist) cancer 3228836* (HBV ASO) HBV caboteg
Slide 35: Upcoming milestones that will inform our progress
Innovation Upcoming milestones that will inform our progress 2H 2020 1H 2021 2H 2021 1H 2022 2H 2022 Anticipated Nucala NP ✓ Benlysta + Rituxan SLE bintrafusp alfa (TGFβ trap/anti-PDL1) BTC Dostarlimab (PD-1) combo with CT 1L EC (RUBY) belantamab mafodotin (BCMA) 3L in MM (DREAMM-3) submission Shing
Slide 36: Changes in portfolio since Q2 2020
Innovation Changes in portfolio since Q2 2020 Changes to pipeline New to Phase I expansion/ New to Phase I New to Pivotal New to Registration Phase II GSK3882347 (FimH antagonist) uUTI GSK3377794 letetresgene-autoleucel (NY-ESO-1 mepolizumab (NP) GSK3739937 (maturation inhibitor) HIV TCR) synovial s