Financial Data and Key Metrics - Sales grew 13% to £7.9 billion in Q2 2024, with core operating profit up 21% to £2.5 billion and core earnings per share rising 17% to 43.4p, all excluding COVID solutions [3] - The company upgraded its full-year guidance, expecting sales growth of 7% to 9% and core operating profit growth of 11% to 13% for 2024 [6][29] - For 2026, the company expects more than 7% sales growth and more than 11% core operating profit growth, with sales projected to exceed £38 billion by 2031 [7] Business Line Performance - Vaccines sales grew 3% in Q2, excluding COVID solutions, with Shingrix delivering £832 million despite a 4% decline in the quarter [16] - Specialty Medicines sales increased by 22%, driven by strong performance in oncology and HIV treatments, with Nucala up 17% and Benlysta up 20% [18] - General Medicines grew by 12% in Q2, with Trelegy sales increasing 41% to £842 million, driven by channel and segment mix adjustments [20] Market Performance - In the U.S., sales grew 17%, with Shingrix sales declining 36% due to channel inventory reductions and changes in retail vaccine prioritization [16] - Outside the U.S., Shingrix sales grew significantly, representing 64% of Q2 revenue, with strong performance in Australia, Europe, and China [16] - Arexvy, the RSV vaccine, has vaccinated nearly 8 million people since launch, maintaining around 2/3 of the retail vaccination share [17] Company Strategy and Industry Competition - The company continues to invest in its pipeline, with 70 assets in clinical development, focusing on vaccines, oncology, and respiratory treatments [8][9] - GSK is advancing its long-acting HIV medicines, with plans to deliver the first ultra-long-acting 4-monthly treatment regimen by 2027 [23] - The company is also progressing in oncology, with Blenrep showing potential to become the new standard of care for multiple myeloma [13] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the medium-term outlook for the vaccines portfolio, despite short-term impacts, and expects growth to come from outside the U.S. [33][40] - The company is focused on delivering differentiated health impact and attractive returns for shareholders, with a strong pipeline and strategic investments in key therapeutic areas [32] - Management highlighted the importance of cost discipline and operational efficiency, which have driven margin improvements and strong cash flow generation [26][27] Other Important Information - The company launched faenoquine in Thailand and Brazil, the first single-dose radical dual medicine to prevent malaria relapse [5] - GSK is conducting a Phase III trial for a low-carbon version of its metered-dose inhaler Ventolin, which could reduce emissions by around 90% [5] - The company is also progressing in ESG initiatives, including partnerships to fight antimicrobial resistance and reduce carbon emissions [5] Q&A Session Summary Question: Vaccine dynamics in China and U.S. Shingrix growth [33] - In China, Shingrix has expanded to 19,000 points of vaccination and is on track for 27,000 by year-end, with strong demand expected in key cities [34][35] - In the U.S., Shingrix sales declined due to channel inventory reductions and CMS rule changes, but growth is expected in the second half of 2024 [36][37] Question: Arexvy contracting and revaccination [45][54] - The company is confident in Arexvy's long-term potential, with peak sales expected to exceed £3 billion, driven by global rollout and strong data [17][49] - Revaccination data for Arexvy will be presented later this year, with the company awaiting full data to determine the need for boosters [57] Question: Zantac litigation and potential settlement [70] - The company reiterated its commitment to defending against Zantac claims, with no change to its growth agenda or investment plans [70] Question: Competition in China and Arexvy's potential [72] - Local competition in China is limited, with Shingrix maintaining a strong position due to its efficacy and target market [74] - The company is exploring opportunities to expand its collaboration with Japan rand to include Arexvy [74] Question: HIV guidance and long-acting therapies [78] - The company expects double-digit growth in HIV for the third consecutive year, with long-acting therapies expected to drive future growth [79] Question: Mechanism for lower dementia incidence with Shingrix [82] - The potential mechanism for reduced dementia risk with Shingrix is still under investigation, with vascular and viral reactivation hypotheses being explored [82]
GSK(GSK) - 2024 Q2 - Earnings Call Transcript