Gsk Plc · LSE:GSK
Gsk — GlaxoSmithKline — Q2 2006 Earnings Presentation
32 slides from Gsk's earnings presentation, Jul 26, 2006
Slide 1: 2Q Results 2006 Presentation to Analysts & Investors
2Q Results 2006 Presentation to Analysts & Investors 26th July 2006
Slide 2: JP Garnier, Chief Executive Officer
JP Garnier Chief Executive Officer
Slide 3: Strong Financials
Strong Financials • Sales – Pharmaceuticals sales +10% – Consumer sales +5% • EPS +15% • Raised EPS guidance for 2006: ‘Around 12% growth’ All growth rates on a CER basis. 3
Slide 4: Q2 Pipeline Highlights: Filings
Q2 Pipeline Highlights Filings Entereg1 Launch Launchtargeted targetedfor foryear yearend end Allermist Now Nowfiled filedin inUS US&&Europe Europe 1 = Collaboration with Adolor Corporation 4
Slide 5: Allermist Phase III ocular data in SAR
Allermist Phase III ocular data in SAR1 0 Ocular symptoms Mean Change in Daily rTOSS 2 Grass Pollen Study (Europe) -1 n=285 -2 -3 placebo (p<0.001)* 110mcg -4 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Days 1 = Seasonal Allergic Rhinitis 2 = rTOSS = Daily Reflective Total Ocular Symptom Score (secondary end
Slide 6: Q2 Pipeline Highlights: Key Data
Q2 Pipeline Highlights Key Data Entereg Launch targeted for year end Allermist Now filed in US & Europe Tykerb Excellent Excellentdata; data;now nowfiling filingin inQ3 Q3 Promacta1 New Newdata dataconfirms confirmsefficacy efficacyin inliver liver eltrombopag disease disease Cervarix Adjuvant Adjuv
Slide 7: Q2 Pipeline Highlights: Phase III starts
Q2 Pipeline Highlights Phase III starts Entereg Launch targeted for year end Allermist Now filed in US & Europe Tykerb Excellent data; now filing in Q3 Promacta New data confirms efficacy in liver eltrombopag disease Cervarix Adjuvant drives superior immune response rosiglitazone MAGE-3 XR Ph PhIII
Slide 8: H5N1 Pandemic Vaccine: Headline Data
H5N1 Pandemic Vaccine Significant Steps Against Global Threat Headline Data New data shows very high immune response ¾ Over 80% seroprotection Response seen at very low doses ¾ Only 3.8µg of antigen needed 8
Slide 9: H5N1 Pandemic Vaccine: What does this mean?
H5N1 Pandemic Vaccine Significant Steps Against Global Threat What does this mean? 9Validates GSK’s approach to H5N1 vaccine 9Confirms potency of adjuvant 9Advances regulatory filings 9Supports discussions with governments 9
Slide 10: Julian Heslop, Chief Financial Officer
Julian Heslop Chief Financial Officer
Slide 11: Q2 Performance Summary
Q2 Performance Summary 2Q 06 2Q 05 %Change £m £m CER £ Turnover 5,811 5,246 9 11 Cost of Goods (1,209) (1,155) 3 5 20.8% 22.0% SG&A (1,883) (1,681) 8 12 32.4% 32.0% R&D (853) (702) 20 22 14.7% 13.4% Other Oper. Income 45 3 Operating Profit 1,911 1,711 13 12 32.9% 32.6% % In Italics are % of Turnover
Slide 12: Q2 Performance Summary
Q2 Performance Summary 2Q 06 2Q 05 %Change £m £m CER £ Operating Profit 1,911 1,711 13 12 Interest (26 ) (59 ) Profit Before Tax 1,897 1,662 15 14 Earnings Per Share 23.3 p 20.4 p 15 14 Tax Rate 29.5 % 28.5 % 12
Slide 13: Legal & Restructuring Costs and Asset Sale Profits
Legal & Restructuring Costs and Asset Sale Profits 2Q 06 2Q 05 £m £m Legal Costs (123) (33) Restructuring Costs 4 (24 ) Asset Sale Profits 91 10 Theravance & Quest (69 ) (9 ) (97) (56) - £41million 13
Slide 14: US Dollar Trends
US Dollar Trends 2006 2005 2.00 1.95 1.90 1.85 ~$1.85 1.80 $/£ 1.75 1.70 1.65 1.60 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month end closing rates 14
Slide 15: Cash Flow
Cash Flow 2Q 06 2Q 05 £m £m Cash Generated From Operations 2,081 2,073 Taxation Paid (959) (543) Capex, Interest and Other (363) (332) Free Cash Flow 759 1,198 Dividends (791) (684) Purchase of Own Shares (305) (214) Share Option Exercises 145 33 Other (91) (89) Net (Increase)/Decrease in Debt (283)
Slide 16: David Stout, President, Pharmaceuticals
David Stout President, Pharmaceuticals
Slide 17: Pharmaceuticals – Q2 2006
Pharmaceuticals – Q2 2006 Total Sales £5.0bn +10% £1.1bn (+6%) International £2.5bn USA (+18%) Europe £1.4bn (0%) CER growth rates 17
Slide 18: US Pharma Environment Benefiting From Successful Medicare Part D Rollout
US Pharma Environment Benefiting From Successful Medicare Part D Rollout • Over 38 million people with Medicare have Rx coverage • 3.5 million Part D prescriptions filled each day • Average premium ~40% lower than original estimates ($24 vs. $37) • On average, beneficiaries saving $1,100 a year Sour
Slide 19: GSK Japan Launches in Next Three Years
GSK Japan 10 Launches in Next Three Years 2007 2008 + 2009 Seretide Allermist (’08) Lamictal Tykerb (’08) Requip Avandia (’09) Arixtra Cervarix (’09) Amerge Entereg (’09) 19
Slide 20: Key Growth Drivers
Key Growth Drivers Total Sales £2.3bn (+19%) Respiratory Diabetes CNS Anti-Viral CV Vaccines Advair Avandia1 Lamictal Valtrex Coreg Vaccines £822m £477m £245m £214m £160m £387m +12% +32% +12% +30% +29% +17% 2Q06 Global Sales and CER growth rates 20 1 = Sales shown are for the Avandia family
Slide 21: Seretide/Advair Growth In All Regions
Seretide/Advair Growth In All Regions Intn’l £76m +12% US Europe £453m £293m +13% +10% Sales £822m +12% CER growth rates 21
Slide 22: Advair: Improving Prescription Share Trend in Q2
Advair Improving Prescription Share Trend in Q2 27.5% NRx Weekly Share 27.0% 26.5% 26.0% 25.5% 25.0% 24.5% 24.0% 31-Mar 14-Apr 28-Apr 12-May 26-May 9-Jun 23-Jun 7-Jul Source: Verispan VONA – US Asthma/COPD controller weekly 22
Slide 23: Advair: Improving Prescription Share Trend in Q2
Advair Improving Prescription Share Trend in Q2 27.5% NRx Weekly Share 27.0% 26.5% 26.0% US Outlook • Strong promotional support continuing 25.5% • Q3 HFA launch • Filing TORCH in October 25.0% 24.5% 24.0% 31-Mar 14-Apr 28-Apr 12-May 26-May 9-Jun 23-Jun 7-Jul Source: Verispan VONA – US Asthma/COPD c
Slide 24: Avandia Family
Avandia Family Sales £477m +32% Intern’l • US: Avandia and Avandamet £67m – Capacity restored May/June Europe +28% – Promotions re-started June/July £54m +36% • Avandamet 1st line indication US approved by FDA in Q2 £356m +33% • Avandamet US NRx share: 1.3% for w/e July 14th CER growth rates. Share
Slide 25: Three Rising Stars
Three Rising Stars Q2 Combined Sales £134m >100% £51m +79% £64m +85% £39m1 >100% (GSK share: £19m) CER growth rates 1 = Total Boniva - includes markets where Roche and GSK co-promote. 25
Slide 26: Vaccines: Strong Q2 Performance; Excellent Outlook
Vaccines Strong Q2 Performance; Excellent Outlook Total +£56m +17% Intern’l +£9m +8% • Sales £387m +17% – Infanrix/Pediarix +38% Europe +£24m +16% – UMV1 recommendation in US for Havrix USA +£23m +35% Growth by Region CER growth and growth rates 1 = Universal mass vaccination 26
Slide 27: H5N1 Pandemic Vaccine: Pivotal Trial Design
H5N1 Pandemic Vaccine Pivotal Trial Design • 400 healthy adults aged 18-60 • 4 doses of H5N1 split antigen: 3.8µg, 7.5µg, 15µg, 30µg • Half given vaccine with novel adjuvant and half without • Two doses given 21 days apart • Immunogenicity endpoints at day 42 27
Slide 28: H5N1 Vaccine Headline Results
H5N1 Vaccine Headline Results CHMP requires a pandemic vaccine to meet 3 criteria 90% 30 90% 80% 80% % individuals seroconverted % individuals seroprotected 25 X-fold increase in HI titre 70% 70% 60% 60% 20 50% 50% 15 40% 40% 30% 30% 10 20% 20% 5 10% 10% 0% 0% 0 Seroprotection Rate Seroconversion Fa
Slide 29: H5N1 Vaccine Headline Results
H5N1 Vaccine Headline Results Lowest dose of GSK’s adjuvanted vaccine 90% 90% 30 80% 80% % individuals seroconverted % individuals seroprotected 25 X-fold increase in HI titre 70% 70% 60% 60% 20 50% 50% 15 40% 40% 30% 30% 10 20% 20% 5 10% 10% 0% 0% 0 Seroprotection Rate Seroconversion Rate Seroconve
Slide 30: H5N1 Vaccine Headline Results
H5N1 Vaccine Headline Results Lowest dose of GSK’s adjuvanted vaccine 90% 90% 30 80% 80% % individuals seroconverted % individuals seroprotected 25 X-fold increase in HI titre 70% 70% 60% 60% 20 50% 50% 15 40% 40% 30% 30% 10 20% 20% 5 10% 10% 0% 0% 0 Seroprotection Rate Seroconversion Rate Seroconve
Slide 31: H5N1 Vaccine Headline Results
H5N1 Vaccine Headline Results Lowest dose of GSK’s adjuvanted vaccine exceeds all CHMP criteria 90% 90% 30 80% 80% % individuals seroconverted % individuals seroprotected 25 X-fold increase in HI titre 70% 70% 60% 60% 20 50% 50% 15 40% 40% 30% 30% 10 20% 20% 5 10% 10% 0 0% 0% Seroconversion Factor S
Slide 32: GlaxoSmithKline
GlaxoSmithKline