Gsk Plc · LSE:GSK
Gsk — GlaxoSmithKline — FY2005 Earnings Presentation
49 slides from Gsk's earnings presentation, Feb 8, 2006
Slide 1: Full Year Results 2005 Presentation to Analysts & Investors
Full Year Results 2005 Presentation to Analysts & Investors 8th February 2006
Slide 2: JP Garnier, Chief Executive Officer
JP Garnier Chief Executive Officer
Slide 3: Excellent Financial Performance
Excellent Financial Performance EPS CER Actual Q405 +33% +47% 2005 +18% +21% 3
Slide 4: Very Strong Cash Generation
Very Strong Cash Generation • £4.7bn free cash flow (+26%) • £1.1bn invested in vaccines business • Net debt decrease £0.7bn • 2005 dividend 44p (2004: 42p) 4
Slide 5: NCE and Vaccine Pipeline Increased 76%
NCE and Vaccine Pipeline Increased 76% 120 111 Number of NCEs and vaccines 16 100 +76% Phase III/Filed 80 Phase II 63 50 Phase I 60 9 40 25 45 20 29 0 2001 2005 5
Slide 6: Significant pipeline progress
Significant pipeline progress 146 Projects in Clinical Development 150 146 16 Phase III/Filed Number of Projects 50 Phase II 100 Phase I PLEs 45 50 35 0 2005 6
Slide 7: Industry Leader in Pipeline Productivity
Industry Leader in Pipeline Productivity 8 GSK 7 NPV Pipeline/ R&D Spend 6 5 4 EU Pharma Average (excluding GSK) 3 2 Feb 02 Oct 02 Oct 03 Oct 04 Dec 05 Source: Adapted from Lehman Brothers PharmaPipelinesTM analysis, December 2005 7
Slide 8: Expanding Late-stage Pipeline
Expanding Late-stage Pipeline 2006 Approvals/ Launches Rotarix Avandaryl Arranon Coreg CR Entereg Trexima Altabax Alli (retapamulin) (orlistat) 8
Slide 9: Expanding Late-stage Pipeline
Expanding Late-stage Pipeline 2006 Approvals/ 2006 Filings Launches Rotarix Avandaryl Allermist Cervarix H5N1 Arranon Coreg CR Tykerb 1 vaccine (EU) Entereg Trexima mepolizumab eltrombopag1 Altabax Alli Lamictal XR (retapamulin) (orlistat) 1) Tykerb and eltrombopag filing expected in end 2006/1H07 9
Slide 10: Cervarix: Market opportunity £2-4bn by 2010
Market opportunity £2 - 4bn by 2010 EU/Int’l March ’06 Filings US Before end ‘06 Novel adjuvant Differentiation Cross protection Expect long duration of antibody response 4 yr data (n= 770): 2Q06 Data Pivotal ph III data (n=18,000): 2H061 1) Interim data from study HPV008 10
Slide 11: Tykerb: Significant Data in 2006
Tykerb: Significant Data in 2006 Breast Cancer Other Tumours Breast Cancer H206 • Brain metastases PII (NCI) • Renal PIII survival • PII 1st line single-agent (n=130) • Inflam. Breast Cancer PII benefit in EGFR+ (n=241) • PIII 1st line w/Taxol1 (n=570) • Cardiac safety (n=2,800) • Head and Neck PI •
Slide 12: Rapidly Expanding Phase III Pipeline
Rapidly Expanding Phase III Pipeline 2006 Approvals/ Other New/Entering 2006 Filings Launches Phase III Phase III in 2006 Avodart meningitis Rotarix Avandaryl Allermist Cervarix (prostate cancer, lymphostat-B combo a-blocker) vaccines H5N1 brecanavir pazopanib Arranon Coreg CR Tykerb 1 Streptorix va
Slide 13: Application of Pharmacogenetics in R&D
Application of Pharmacogenetics in R&D Rosiglitazone XR in Alzheimer’s Disease Subgroup Analysis APOE4 –ve patients (50% of AD pop.) -2 • Patients with AD have reduced glucose Mean change from baseline in ADAS-cog1 8mg rosiglitazone XR metabolism in brain -1 • Current therapies have limited duration
Slide 14: Dr Tachi Yamada, Dr Moncef Slaoui
Dr Tachi Yamada Dr Moncef Slaoui
Slide 15: GlaxoSmithKline
GlaxoSmithKline
Slide 16: Julian Heslop, Chief Financial Officer
Julian Heslop Chief Financial Officer
Slide 17: 2005 Performance Summary
2005 Performance Summary 2005 2004 %Change £m £m CER £ Turnover 21,660 19,986 7 8 Cost of Goods (4,764) (4,360) 8 9 22.0% 21.8% SG&A (7,250) (7,201) - 1 33.5% 36.0% R&D (3,136) (2,904) 8 8 14.5% 14.5% Other Oper. Income 364 235 Operating Profit 6,874 5,756 16 19 31.7% 28.8% % In Italics are % of Tur
Slide 18: 2005 Performance Summary
2005 Performance Summary 2005 2004 %Change £m £m CER £ Operating Profit 6,874 5,756 16 19 Profit on Disp. Of Assoc. - 149 Interest (194 ) (186 ) Profit Before Tax 6,732 5,779 13 16 Earnings Per Share 82.6 p 68.1 p 18 21 Tax Rate 28.5% 30.4% 18
Slide 19: 2005 Legal & Restructuring Costs and Asset Sale Profits
2005 Legal & Restructuring Costs and Asset Sale Profits 2005 2004 £m £m Legal Costs (430 ) (595 ) Restructuring Costs (141 ) (104 ) Asset Sale Profits 290 295 (281 ) (404 ) + £123 million 19
Slide 20: Q4 '05 Performance Summary
Q4 ‘05 Performance Summary 2005 2004 %Change £m £m CER £ Turnover 5,907 5,236 8 13 Operating Profit 1,633 1,241 20 32 27.6 % 23.7 % Profit Before Tax 1,606 1,322 11 21 Earnings Per Share 19.8 p 13.5 p 33 47 Tax Rate 28.3 % 39.4 % % In Italics are % of Turnover 20 2004 restated for reclassification o
Slide 21: Q4 '05 Legal & Restructuring Costs and Asset Sale Profits
Q4 ’05 Legal & Restructuring Costs and Asset Sale Profits 2005 2004 £m £m Legal Costs (132 ) (253 ) Restructuring Costs (59 ) (79 ) Asset Sale Profits 12 165 (179 ) (167 ) - £12 million 21
Slide 22: Excellent Financial Performance in 2005
Excellent Financial Performance in 2005 • Good earnings growth • Strong cash generation: free cash flow £4.7bn (+26%) • £1.1 billion invested in Vaccines business • £1 billion share buyback • £2.4 billion dividend paid • Net debt decreased by £0.7 billion 22
Slide 23: Financial Performance Outlook for 2006
Financial Performance Outlook for 2006 EPS percentage growth rate expected to be around 10% (CER) 23
Slide 24: David Stout, President, Pharmaceuticals
David Stout President, Pharmaceuticals
Slide 25: Pharma Industry Environment
Pharma Industry Environment • Medicare Part-D • Global pricing • Regulatory • Pharma reputation 25
Slide 26: 2005 Sales Performance
2005 Sales Performance Total Pharma Sales £18.7bn +8% Int’l £4.0bn +9% USA £9.1bn +8% Europe £5.6bn +8% Note: CER Growth Rates 26
Slide 27: Key Growth Drivers
Key Growth Drivers 2005 Total Sales £7.8 Billion +21% Respiratory Diabetes CNS Anti-- Viral Anti CV Vaccines Advair Avandia Lamictal Valtrex Coreg Vaccines £3,003m £1,329m £849m £695m £573m £1,389m +22% +18% +24% +21% +32% +15% Reported 2005 Global Sales and CER growth rates 27
Slide 28: Seretide/Advair Sales Exceed £3 Billion +22%
Seretide/Advair Sales Exceed £3 Billion +22% Total £529m +22% Intern’l £38m +16% Europe £144m +16% USA £347m +26% Net Sales Growth by Region CER growth and growth rates 28
Slide 29: Advair US: Source of Business
Advair US Source of Business Asthma – switches from SABA 2% Asthma – Treatment naïve patients 6% COPD 42% Asthma 50% Source: SDI patient level data December 2005 25% of Advair’s business is comorbid asthma + COPD. This is included in COPD above. 29
Slide 30: Advair US: Strong Prescription Trend Continuing
Advair US Strong Prescription Trend Continuing 4 Week rolling average US Retail TRx volume 390,000 340,000 290,000 240,000 4 3 5 3 4 4 05 5 -03 05 04 06 -05 04 3 4 5 v-0 v-0 v-0 l-0 l-0 -0 l-0 p-0 p-0 p-0 ar- n- ar- n- n- ay ay ay Ju Ju Ju No No No Ja Ja Ja Se Se Se M M M M M 2003 2004 2005 Source:
Slide 31: Advair US: Untapped Potential
Advair US Untapped Potential Asthma Patients Treated COPD Patients Treated (Age 12+) (Includes 3.6M with comorbid asthma) Advair Advair 3.6M Other 2.5M Other Medications Medications 5.3M 4.0M Source: SDI 2004 patient counts, December 2005 patient shares 31
Slide 32: Avandia Sales £1.3 Billion +18%
Sales £1.3 Billion +18% Total £196m +18% Intern’l £22m +13% Europe £53m +52% USA £121m +14% Net Sales Growth by Region CER growth and growth rates 32
Slide 33: A New Pill For Type 2 Diabetics
A New Pill For Type 2 Diabetics Avandaryl launched Feb 1 st New Metformin Sulphonylurea Other TZDs Q4’05 US Retail TRx data; Verispan, Scott-Levin (VONA) 33
Slide 34: The Next Combination…
The Next Combination… >70%* of Type 2 diabetics have high cholesterol Avandia+simvastatin combo file expected in 2007 A logical way for physicians to manage blood glucose and lipids - - the two biggest contributors to CV risk * Source: National Health and Examination Survey II 34
Slide 35: Avodart Sales £129m grew 100%
Sales £129m grew 100%; Strong Share Gains in 2005 US Retail Market New Prescription Share 42.7% 43% (5-ARI mkt) 33% 23% 13% -04 4 4 4 4 4 5 5 5 5 5 r-0 n-0 g-0 t-0 c-0 b-0 r-0 n-0 g-0 t-05 c-0 Feb Ap Ju Au Oc De Fe Ap Ju Au Oc De 2004 2005 Source: Verispan (VONA) 35 Note: CER Growth Rates
Slide 36: Requip Sales £156m +34%
Sales £156m +34% US Monthly Retail NRx volume 70,000 60,000 • EU Launches for RLS in ‘06 50,000 Volume of NRx has more than • PLE filings quadrupled 40,000 – Requip once-a-day for Parkinson’s filed Dec ’05 30,000 – Requip extended release 20,000 for RLS in ‘06 10,000 0 April ‘05 December ‘05 Source:
Slide 37: Boniva Strong Launch
Strong Launch US - Share of 30% New Patient Starts 28% • US market ~$3.0bn 25% 20% • GSK share of profit in ’05: £18m 15% • EU Launches in ‘06 10% • Boniva quarterly injection 5% approved by FDA Jan ‘06 0% 05 5 05 5 5 5 5 5 l-0 v-0 -0 g-0 r-0 p-0 n- ct- ay Ju Ap No Ju Au O Se M Co-Promotion with Roc
Slide 38: Vaccines Sales £1.4 Billion +15%
VACCINES Sales £1.4 Billion +15% • Product Sales – Infanrix/Pediarix £431m +19% US International £459m +10% £338m +26% – Hepatitis £444m +8% – Flu £107m +32% – Boostrix £29m >100% Europe £592m +12% Note: CER Growth Rates 38
Slide 39: Significantly Expanding GSK's Vaccines Business…
Significantly Expanding GSK’s Vaccines Business… 39
Slide 40: Major Vaccines in Years
VACCINES 5 Major Vaccines in 5 Years • Cervarix – EU file March ‘06; US file before end ‘06 • Rotarix – EU launch expected Q2’06 • Meningitis – UK approval Dec ’05; US file in ’08 • Streptorix – EU file in ’07 • Improved flu – US and EU file in ’08 40
Slide 41: Influenza – Strategic Moves
VACCINES Influenza – Strategic Moves • launched in US Q3’05 • Significant capacity expansion – ID Biomedical acquisition (Fluviral expected in ’06) – Doubling Dresden capacity by ‘08 • Cell culture technology (Marietta, Pa.) • Improved flu vaccine – Phase IIb interim data in ‘06 41
Slide 42: Pandemic Preparations
VACCINES Pandemic Preparations • First company to submit EU “mock up” (Dec ’05) • H5N1 clinical trials in ’06 – 1st & 2nd generation vaccines – Adjuvants = antigen sparing & expanded capacity • Relenza capacity expansion – Capacity: 1m in ’05; 15m in ’06 42
Slide 43: '06 Approvals / Launches
’06 Approvals / Launches Rotarix (EU) Avandaryl Arranon Coreg CR Entereg (POI) Trexima Altabax Alli (orlistat) (retapamulin) OTC for weight-loss Vaccine NCE PLE CHC 43
Slide 44: Great New Market Opportunities
Great New Market Opportunities Post-Operative Ileus • Response to FDA • US Surgeons: 90%+ feel approval letter by mid ’06 more effective treatment needed* * Harris Interactive Survey of US Surgeons December 2003 44 In development with Adolor Corporation
Slide 45: Great New Market Opportunities
Great New Market Opportunities Post-Operative Ileus • Response to FDA • US Surgeons: 90%+ feel approval letter by mid ’06 more effective treatment needed* Opioid Induced GI Symptoms (Phase III) • ~170 million TRxs for chronic opioid use in US • 50% of patients suffer from GI side effects • Patients
Slide 46: First in New Class of Antibiotics
First in New Class of Antibiotics • US skin infection market ~$1.2 Billion (Topicals ~25% mkt) • Dosing advantages vs other topicals – BID vs TID – 5 days vs 10 days • Broad indications (includes SITL and SID) SITL = Secondarily Infected Traumatic lesions; SID = Secondarily Infected Dermatosis 46
Slide 47: Coreg CR
Coreg CR Significantly expanding Coreg’s market US Diagnosed Patients* 20 ed by t ina drugs Dom a -day - 15 once Millions 10 5 0 Heart Failure Post-MI LVD Complicated Hypertension * Source: CHS US National Health and Wellness Survey, 2004 47
Slide 48: The Next Generation Migraine Treatment!
The Next Generation Migraine Treatment! • First and only therapy targeting multiple pathways that cause migraine pain • Beat the Gold Standard head to head • Opportunity to capture shares from all medications currently used to treat migraine Phase III data to be published at AAN and AHS during 2006.
Slide 49: GlaxoSmithKline
GlaxoSmithKline