Gsk Plc · LSE:GSK
Gsk — GlaxoSmithKline — Non-Deal Roadshow (June 2010)
31 slides from Gsk's roadshow presentation, June 2010
Slide 1: Investor Meetings June 2010
e csk an Kline Investor Meetings June 2010
Slide 2: Global Pharma market £477bn; ~+7% CAGR 05-09
Global Pharma market £477bn; ~+7% CAGR 05-09 Global Pharma Market 2009 Large unmet medical need Aging population Growing middle class Generic “cliff” R&D productivity US Healthcare reform EU pricing pressure Consolidation 2 Source: IMS MAT Dec 2009; growths are 5yr CAGR (2005-09)
Slide 3: GSK patent cliff from 2006 to 2009
GSK patent cliff from 2006 to 2009 £4.2bn EPS growth (18% of GSK’s total turnover) (Business Performance) 2006: +19% 2007: +10% 2008: -9% 2009: +2% £m GSK US turnover for selected products CER growth rates 3 Total franchise turnover included above; Business Performance EPS excludes major restructuri
Slide 4: Turnover and EPS progression 2005-09
Turnover and EPS progression 2005-09 Turnover EPS before major restructuring 2005-09 (£bn) 2005-09 (pence) +3% +2% +10% -9% +19% -3% +9% +2% 4 CER growth rates
Slide 5: Increasing free cash flow and progressive dividend
Increasing free cash flow and progressive dividend Free cash flow Dividend 2005-09 (£bn) 2005-09 (pence) Dividend payment in year 5 CER growth rates
Slide 6: GSK's strategic priorities
GSK’s strategic priorities Grow a diversified global business Deliver more products of value Simplify the operating model 6
Slide 7: Grow a diversified global business
Grow a diversified global business Prophylactic vaccines Drive & diversify small molecule Rx business Therapeutic vaccines Vaccines Globalise & innovate consumer brands Biopharm Leverage current & future vaccines portfolio Pharma Pharma Deliver Biopharm R&D pipeline Emerging Consumer market OTC bran
Slide 8: Turnover growth despite decline in US Pharma
Turnover growth despite decline in US Pharma (+2% EPS growth) +7% -13% +19% Consumer US growth rate impacted by Rest of losses to generics Pharma £4.7bn +22% £2.2bn Japan Ph £1.6bn US Emerging Pharma Markets Ph £9.2bn +20% £3.0bn Europe Pharma £7.7bn +9% 2009 Turnover £28.4bn (+3%) CER growth rates;
Slide 9: Q1 2010 Turnover of £7.4bn (+13%)
Q1 2010 Turnover of £7.4bn (+13%) +9% -7% -1% (-2% ex pandemic) ViiV HC Consumer US growth rate impacted by (HIV) £1.2bn losses to generics +16% £0.4bn Rest of Pharma £0.5bn US Japan Ph Pharma +53% (+2%) £0.6bn £1.9bn Emerging Markets Ph +43% (+17%) £0.9bn Europe Pharma £1.9bn +16% (+4%) Excluding p
Slide 10: "White pill Western market" portion of total turnover reduced
“White pill Western market” portion of total turnover reduced from ~40% to ~27% 2007 Q1 2010 US + Europe Rx US + Europe small Rx molecule small Consumer ~27%* molecule Emerging Mkts ~40% Vaccines Respiratory Japan Dermatology *Excludes impact of pandemic sales; Including pandemic = ~24% 10
Slide 11: Bolt-on acquisitions and partnerships
Bolt-on acquisitions and partnerships 18 deals recently completed across the business Emerging Markets/Asia Pacific/Japan Egypt / Pakistan / EM/AP Algeria Korea Near East Japan Argentina Pharma Vaccines Consumer Walvax AZ Tika BMS (3 deals); Dr Reddy’s (ex-India); Laboratoire Pharmaceutique Algérien
Slide 12: Consumer Healthcare business growing strongly
Consumer Healthcare business growing strongly Nutritional Healthcare £233m (+12%) OTC Medicines Oral £617m (+11%) Healthcare £381m (+5%) Q1 2010 Turnover £1,231m +9% 12 CER growth rates
Slide 13: Consumer Healthcare Products
Consumer Healthcare Products Number of years marketed 140 115 83 80 72 70 64 55 49 37 26 18 9 6 3 13
Slide 14: GSK "Emerging Markets" business
GSK “Emerging Markets” business 85 countries >12,000 sales reps CIS China MENA India Mexico SSA Latin America Emerging Markets 1Q10 £866m (+43%)* = 12% of GSK Group Turnover 14 Source: GSK 1Q10 reported turnover including pandemic. Excluding pandemic, turnover was £713m (+17%)
Slide 15: GSK's pharma presence in Emerging Markets
GSK’s pharma presence in Emerging Markets Eastern & CIS Central Europe China MENA India Mexico SSA Asia Pac Latin (excl Japan, Aus, NZ) America + Asia Pac (excl Japan, Australia, NZ), Eastern and Central Europe = £1.3bn (+40%) 1Q10 15 Source: GSK 1Q10 reported turnover including pandemic. Excluding
Slide 16: GSK's total presence in Emerging Markets
GSK’s total presence in Emerging Markets Rx Cx + £1.3bn 1Q10 £0.4bn 1Q10 (+40%) (+13%) £1.7bn (+32%) 1Q10 24% of GSK Group Turnover 16 Source: GSK 1Q10 reported turnover including pandemic. Excluding pandemic, total turnover was £1.6m (+17%)
Slide 17: GSK Emerging Markets 2009 turnover
GSK Emerging Markets 2009 turnover 2009 £3.0bn (+20%) By region Top markets (+24%) 500 SSA 450 MENA £204m 400 China* (+16%) 350 (+10%) £461m (+6%) £983m (+6%) 300 £m (+36%) (+28%) 250 (+56%) (+22%) £231m 200 CIS 150 £271m 100 £214m South 50 Mexico £604m Asia 0 Turkey Mexico Brazil China* Pakistan Sa
Slide 18: Emerging Markets strategy
Emerging Markets strategy Scale up our Classic brands Build and capture business the Vaccines market £1.3m +18% £669m +30% Pandemic Drive our Innovative brands £967m +17% 18 Source: GSK 09 reported sales; CER growth rates
Slide 19: Longevity of brands
Longevity of brands Long product life cycles & larger volumes offset low prices Developed markets Brand Sales Value product life cycle Emerging Markets product life cycle Time GSK illustrative analysis 19
Slide 20: Example of longevity: Augmentin
Example of longevity: Augmentin 600 Significant market expansion since branded generics 500 400 GBP Mn 300 Others (241 brands) 200 Top 5 Branded Generics 100 Augmentin 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Amoxy+Clav Sales Evolution in Emerging Markets 1Q 2010 EM sales: £70m +14%
Slide 21: Global vaccines market
Global vaccines market 2009 total sales 2009 excluding H1N1 Novartis Novartis 11.3% GSK 7.7% GSK 27.2% 24.1% Pfizer/Wyeth 16.2% Pfizer/Wyeth 13.9% Merck Merck 17.7% Sanofi- 20.6% Sanofi- Aventis Aventis 22.6% SP-MSD 22.8% SP-MSD 8.6% 7.4% Total 2009 = $21,493m Total 2009 excl. H1N1 = $18,432m GSK es
Slide 22: GSK vaccines: broad geographic opportunity
GSK vaccines: broad geographic opportunity GSK vaccines 2009 sales £3.7bn +30% US 22% £815m EU 47% £1,744m Int'l 31% £1,147m 1Q 2010 sales: £713m +18% CER growth rates Incl. pandemic: £1,411m 22
Slide 23: GSK has the broadest vaccine portfolio in EM
GSK has the broadest vaccine portfolio in EM GSK Merck Sanofi Pfizer Novartis DTPw combos 9 9 9 DTPa combos 9 9 MMR / Varicella 9 9 9 Hepatitis 9 9 9 Rotavirus 9 9 Meningococcal 9 9 d Pneumococcal 9 9 Influenza 9 9 9 HPV 9 9 Malaria d Dengue d d 23 9 = available in EM; d = in development
Slide 24: Opportunity in Japan
Opportunity in Japan Japanese vaccine market underdeveloped Cervarix first HPV vaccine approved in Japan Rotarix first rotavirus vaccine filed in Japan GSK key supplier of H1N1 pandemic vaccine to Japanese government Partnership with Kaketsuken in flu and flu cell-culture Japan fully integrated into
Slide 25: New Products ('07 - '10 launches)
New Products (’07 - ’10 launches) H1N1 LAMICTAL XR & ODT 1Q2010 total sales: £412m +65% Including pandemic vaccines: £1,110m 25 CER growth rates; since Q1 2010 Prolia has also been launched in Europe.
Slide 26: Delivering more products of value
Delivering more products of value 12 10 More FDA approvals than any other company since 2006 8 6 4 2 0 GSK Novartis Pfizer Wyeth Sanofi 2007 2008 2009
Slide 27: Committed to improving returns in R&D
Committed to improving returns in R&D R&D returns over the last decade Our estimates for GSK’s Our goal is to improve this return have been disappointing1 late-stage portfolio2 by 25% via our R&D strategy 15% 10% IRR 5% 0% 1. McKinsey, Nature Reviews, Drug Discovery (Aug 09) for small molecules. 13%
Slide 28: Five levers to improve returns in pharma R&D
Five levers to improve returns in pharma R&D Shift R&D spend Increase Discovery2 Grow biopharm Number of Discovery projects originating from from early to late1 externalisation pipeline 60% 80 20 Number of biopharm projects 70 external sources % R&D late-stage spend 60 15 50 50% 40 10 30 20 5 10 40%
Slide 29: Driving efficiencies through clinical development
Driving efficiencies through clinical development Number of sites recruiting zero patients reduced from 29% to 17% (2006 to 2010) Number of patients per site has doubled from 5 to 10 (2006 to 2010) Over $120m saved by reducing clinical trial supply overages (cumulative from 2006) Clinical study coun
Slide 30: Maintaining ~30 assets in Ph III/registration
Maintaining ~30 assets in Ph III/registration Benlysta MAGE-A3 (lupus) (lung cancer) denosumab Avodart MAGE-A3 (osteoporosis) (prostate Ca) (melanoma) otelixizumab Arixtra pazopanib Duodart MenACWY (type 1 diabetes) (ACS) (Avodart (renal cell + tams) Ca) (meningitis) ofatumumab Avandamet XR pazopani
Slide 31: GlaxoSmithKline
GlaxoSmithKline