Gsk Plc · LSE:GSK
Gsk — GlaxoSmithKline — Q3 2006 Earnings Presentation
31 slides from Gsk's earnings presentation, Oct 26, 2006
Slide 1: 3Q Results 2006 Presentation to Analysts & Investors
3Q Results 2006 Presentation to Analysts & Investors 26th October 2006
Slide 2: JP Garnier, Chief Executive Officer
JP Garnier Chief Executive Officer
Slide 3: Strong Q3 Performance
Strong Q3 Performance • Pharmaceuticals sales +7% (US sales +14%) • EPS +21% • Positive financial outlook: – 2006 EPS guidance raised to “mid-teens” percentage growth – Share buy-back doubled to £2bn over next 12 months as part of £6bn programme over next 3 years – Expected 2006 dividend increased t
Slide 4: Key Product News
Key Product News Tykerb/Cervarix Coreg CR FluLaval 4
Slide 5: Key Product News
Key Product News Tykerb/Cervarix Promacta Coreg CR pazopanib FluLaval New Generation Flu 5
Slide 6: New Generation Flu Vaccine
New Generation Flu Vaccine New New Data Data Excellent immunogenicity in over 65s 3500 T- cell response nearly doubled 3000 2500 T-cell count/ million • Excellent antibody response 2000 • Phase III trials underway 1500 • Filing expected in 2008 1000 500 0 Traditional flu vaccine New Generation Flu (
Slide 7: Julian Heslop, Chief Financial Officer
Julian Heslop Chief Financial Officer
Slide 8: Q3 Performance Summary
Q3 Performance Summary 3Q 06 3Q 05 %Change £m £m CER £ Turnover 5,642 5,471 7 3 Cost of Goods (1,222) (1,184) 5 3 21.7% 21.6% SG&A: Excl. Legal (1,595) (1,694) (1) (6) 28.3% 31.0% Legal (22) (190) R&D (871) (803) 11 8 15.4% 14.7% Other Oper. Income 91 183 Operating Profit 2,023 1,783 19 13 35.9% 32.
Slide 9: Q3 Performance Summary
Q3 Performance Summary 3Q 06 3Q 05 %Change £m £m CER £ Operating Profit 2,023 1,783 19 13 Interest (17 ) (46 ) Profit Before Tax 2,022 1,753 21 15 Earnings Per Share 24.7 p 21.3 p 21 16 Tax Rate 29.5 % 28.5 % 9
Slide 10: Legal & Restructuring Costs and Asset Sale Profits
Legal & Restructuring Costs and Asset Sale Profits 3Q 06 3Q 05 £m £m Legal Costs (22) (190) Restructuring Costs (124) (29) Asset Sale Profits 63 122 Theravance & Quest 22 37 (61) (60) - £1 million 10
Slide 11: US Dollar Trends
US Dollar Trends 2006 2005 2.00 1.95 1.90 ~$1.87 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 11
Slide 12: Cash Flow
Cash Flow 3Q 06 £m 3Q 05 £m Cash Generated from Operations 2,114 2,325 Taxation Paid (2,166) (469) Capex, Interest and Other (452) (280) Free Cash Flow (504) 1,576 Dividends (619) (568) Purchase of Own Shares (309) (235) Share Option Exercises 17 4 Other (48) 85 Net (Increase)/Decrease in Debt (1,46
Slide 13: Returning Cash to Shareholders
Returning Cash to Shareholders Dividends + Share Repurchases 13
Slide 14: David Stout, President, Pharmaceuticals
David Stout President, Pharmaceuticals
Slide 15: Q3 '06 Sales by Region
Q3 ‘06 Sales by Region Int’l £1.0bn +3% Total Pharma Sales USA £2.6bn £4.9bn +7% Europe +14% £1.3bn 0% Note: CER % growth 15
Slide 16: Key Growth Drivers
Key Growth Drivers Respiratory Diabetes CNS Anti-Viral CV Vaccines Advair Avandia1 Lamictal Valtrex Coreg Total £813m £378m £257m £215m £195m £412m +14% +11% +27% +26% +32% +5% Total £2.3 Billion +15% (47% of Pharma Sales) Reported Q3 ’06 Global Sales and CER growth 1 = Sales shown are for the Avand
Slide 17: Seretide/Advair: Growth Continuing
Seretide/Advair: Growth Continuing Intn’l £78m +7% US Europe £464m +17% £271m +12% Sales £813 million +14% % CER Growth 17
Slide 18: Advair US Prescriptions Trends
Advair US Prescriptions Trends Advair 4-week rolling average US Retail TRx volume 400,000 peak w/e 5/27 350,000 peak w/e 3/26 300,000 250,000 200,000 3 4 5 6 04 05 06 03 04 05 06 -0 -0 -0 -0 n- n- n- p- p- p- p- ay ay ay ay Ja Ja Ja Se Se Se Se M M M M 2003 2004 2005 2006 Scott Levin/Verispan – US A
Slide 19: Advair US Prescriptions Trends
Advair US Prescriptions Trends Advair 4-week rolling average US Retail TRx volume 400,000 peak w/e 12/23 peak w/e 5/27 350,000 peak w/e 3/26 FDA 300,000 Advisory (Nov ‘05) Seasonal upswing 250,000 200,000 3 4 5 6 04 05 06 03 04 05 06 -0 -0 -0 -0 n- n- n- p- p- p- p- ay ay ay ay Ja Ja Ja Se Se Se Se
Slide 20: Seretide/Advair Near-term Growth Opportunities
Seretide/Advair Near-term Growth Opportunities • US - HFA MDI launched in October • New dedicated COPD sales force • TORCH now filed in both US and Europe • Japan launch expected in 2007 20
Slide 21: Avandia Family Q3 Sales £378m +11%
Avandia Family Q3 Sales £378m +11% Europe & • Strong growth in Europe and Intern’l Intern’l continuing £113m +26% • US reported growth impacted US by some de-stocking £265m +6% % CER Growth 21
Slide 22: Avandia Family – Strong Growth Prospects
Avandia Family – Strong Growth Prospects • Regain physician confidence in supply • Drive earlier combination treatment – Avandamet 1st line launched July 11th – Avandaryl launched 1Q06 – Evidence-based treatment guidelines call for earlier • use of TZDs • combination of oral medications • Landmark O
Slide 23: Landmark Outcomes Trials
Landmark Outcomes Trials Results announced Sept ’06 Avandia reduced risk of To be filed with FDA DREAM progression to type II in 1H2007 >5000 pts. 3 yr study diabetes by 62% 23
Slide 24: Landmark Outcomes Trials
Landmark Outcomes Trials Results announced Sept ’06 Avandia reduced risk of To be filed with FDA DREAM progression to type II in 1H2007 >5000 pts. 3 yr study diabetes by 62% Results due Dec 4th Avandia vs metformin GSK webcast ADOPT >4000 pts. 4 yr study vs sulfonylurea scheduled in 1st line use 24
Slide 25: Coreg Sales £195m +32%
Sales £195m +32% Coreg 2,750 US Quarterly TRx volume (000) 2,500 Approved Oct. 20th 2,250 2,000 3Q05 4Q05 1Q06 2Q06 3Q06 Source: Verispan, VONA 25
Slide 26: Coreg: New Market Opportunity
New Market Opportunity Coreg’s estimated share of ß Blocker market by indication 35,000 40% Estimated annual TRx BB volume by indication (000) Beta-Blocker Volume Coreg Market Share 30,000 32% 30% 25,000 22% 20,000 20% 15,000 10,000 8% 10% 5,000 0 0% Post-MI LVD Heart Failure Complicated Hypertensio
Slide 27: Three Rising Stars – Continued Strength
Three Rising Stars – Continued Strength £57m +61% £70m +71% £60m1 >100% (GSK share: £27m) GSK Q3 Combined Sales £154m +96% CER growth rates 1 = Total Boniva - includes markets where Roche and GSK co-promote. 27
Slide 28: RLS Continues to Drive Growth
RLS Continues to Drive Growth Requip 750,000 US Quarterly TRx Volume • 3Q06 Sales £70m +71% • Requip CR for RLS filed Oct. ‘06 • Requip 24-hour for 550,000 Parkinson’s expected file in 4Q06 350,000 150,000 3Q05 4Q05 1Q06 2Q06 3Q06 Source: Verispan, VONA 28
Slide 29: Share Gains Continuing
Share Gains Continuing Boniva Monthly NRx Share 15% US Bisphosphonates mkt 14.1% 10% 5% BP market is $3.4bn growing +12% (MAT August 2006) 0% 5 5 5 5 5 6 6 6 6 6 r-0 -0 l- 0 -0 -0 -0 r-0 -0 l- 0 -0 a ay u p v a n a ay u p M M J Se No J M M J Se Co-Promotion with Roche Source: Market share Verispan,
Slide 30: Key Opportunities in 2007
Key Opportunities in 2007 - - New ACS indication - - For POI H5N1 vaccine 30
Slide 31: GlaxoSmithKline
GlaxoSmithKline