GSK plc at Bank of America Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Graham Parry - Bank of America - Analyst : So perhaps, Julie, I don't know if you want to start off with any kind of opening remarks on just 1.5 years now, I think roughly in your tenure. So what did you inherit? What do you think the key changes have been? And how are you on track to sort of meet those midterm objectives?

Question: Graham Parry - Bank of America - Analyst : So then your midterm guidance which you've inherited, but then you've got upticked slightly and is 7%. So great in terms of sales growth, great in 11% operating income growth between 2021 and '26. So we're sort of it midway through that. And consensus is already more optimistic in the 9%, 13%. So perhaps is there any areas of particular caution you're focused on? And what would be the threshold for you to have your performing more in line with consensus to think about changing that guidance and addressing it and updating the market?

Question: Graham Parry - Bank of America - Analyst : Got it, thank you. And then I think you have to part of your long-range guidance is the GBP38 billion in revenue, 2031. Consensus has been ticking up on that as you had some of the pipeline readouts earnings currently running at about GBP35 billion. But where do you see the sort of key gap? Is it just mostly pipeline or is it on when you look across their consensus numbers? Or is this the operating performance? Where do you think Street might be underestimating relative to internal plan?

Question: Graham Parry - Bank of America - Analyst : So you see what they say pipeline predominantly on oncology respiratory is a ratio that --

Question: Graham Parry - Bank of America - Analyst : And actually within that is any of that for example, new indications or expanded indications for Jemperli and the Ojjaara numbers where I'd say their recent performance has probably been ahead of expectations.

Question: Graham Parry - Bank of America - Analyst : And then on the margin guidance that you alluded to keep margins flat to down type of a loss of exclusivity. Obviously, it's very high margin revenue going away sort of 2028 to 2030 to keep margins flat just to be clear that's basically because you think you've got revenue replacement from pipeline as opposed to big cost cutting or any kind of a reallocation of the cost base? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 19, 2024 / 8:05AM, GSK.L - GSK plc at Bank of America Global Healthcare Conference

Question: Graham Parry - Bank of America - Analyst : Thank you. Interesting stuff. AI is becoming, I think, more commonly talked about in pharma in SG&A as well as R&D now as well. So maybe shift gears to some marketing product. So Arexvy obviously had a very strong launch. The RSV vaccine based on launch last year, early season prescriptions this year so far have been well below the level that we were seeing this time last year. So perhaps just talk through the dynamics of that, what's driving it? Is it confusion around pace of changing the recommendation in June? Is that you just you hit a lot of the low-hanging fruit last year? It's just harder to find people this year, for example, but perhaps just talk us through those dynamics.

Question: Graham Parry - Bank of America - Analyst : So the COVID interruption, do you think that's temporary? Or do you think that we should be thinking about total vaccinations in second half of this year and the season being lower than what we saw between the across the whole market between both you and Pfizer?

Question: Graham Parry - Bank of America - Analyst : Yeah, they created a high hurdle. And if I look at the split between you and Pfizer, so they started contracting later last season this season, you're all in the mix together with Moderna as well as the latest scripts are showing you sort of talks about 50% of the share and you could sell on the Q2 call that you'd contracted for market leadership. But is that sort of 50% where we should be thinking you're going to sort of then stay for the rest of the season or is market leadership in a sub 50% share number?

Question: Graham Parry - Bank of America - Analyst : And is the strategy to trying to preserve price and share that ultimately drives the pricing, not anything especially Moderna come into the market not see in a foot race to the bottom on price here?

Question: Graham Parry - Bank of America - Analyst : Yeah. So they said we should get data, which gives you further update on third season efficacy and duration. I think to me, the messaging seems to have shifted a little bit more towards we've got a low GBS risks, Guillain-Barre Syndrome, and a long duration vaccines. But that would start pointing towards a vaccine that maybe doesn't need a booster next year. And so when you look at your guidance sort of growth interactivity next year in the GBP3 billion peak, does that assume boosters happening? Or do you now see this as more of a vaccine where you roll it out globally, but as the preferred vaccine in the market that maybe boosters are either not happening or happening much less frequently than that?

Question: Graham Parry - Bank of America - Analyst : Which seems a sensible strategy, I guess, the challenge that is as you look at 2025, if there's no booster and you haven't really rolled out in Europe yet, you already -- I think we estimate by the end of the season to be over 30% penetrated, which is where Shingrix has stopped growing year on year. Is growth in '25 under in Arexvy that a real challenge?

Question: Graham Parry - Bank of America - Analyst : Okay. And I might switch gears to Shingrix because that's also been obviously a great success story, but it started to stall in the US. And so do you think you can grow again in the US or is it sort of now about just trying to find the pockets of the population that are harder to reach, but year on year growth is going to be very challenged in the US now?

Question: Graham Parry - Bank of America - Analyst : Yeah. And then in China, there is some sort of movement in the phasing of the deliveries as Zhifei and perhaps just kind of explain, especially in that because that coincided with a bit of a bloodbath from Merck in terms of their data. So I think people sort of. And then for the two together, as opposed to just explain specifically what was the inventory issue for GSK and how that did or didn't relate to what we're seeing with Merck?

Question: Graham Parry - Bank of America - Analyst : So you're not immune to the dynamic changes, maybe expand on that?

Question: Graham Parry - Bank of America - Analyst : And then just to be clear, your deal with Zhifei, there are minimum contracted volumes, so they have to take GBP400 million this year, GBP800 million next year instead of GBP1.2 billion the year after. Is there any scenario in which that you wouldn't book that revenue out of the Zhifei and they wouldn't take those volumes or is that set in stone in the contracts?

Question: Graham Parry - Bank of America - Analyst : So if the demand wasn't there, you wouldn't necessarily hold them to the GBP400 million this year, GBP800 million next year?

Question: Graham Parry - Bank of America - Analyst : And then if I look at the European situation, so Germany had a fantastic initial launch there, that looks like it's more fully penetrated now. So which are the markets should we be focused on, whether or not you're just about to launch in France, for example? And we'll -- do you think that will be able to replace, I guess, the slowdown in Germany and actually still see growth out of Europe over this year, next year?

Question: Graham Parry - Bank of America - Analyst : There you go. I'm due mine now actually, let's go and get it. Fantastic. I might just move on to Zantac, which has obviously been a thorn in the side for GSK over the last couple or -- two years or so. And obviously had some good news recently with the Delaware Supreme Court saying they take up the appeal on that original Delaware ruling.

Question: Graham Parry - Bank of America - Analyst : Yeah, it doesn't happen all the time. So just perhaps run us through the implications of that decision, your confidence that you can get that decision overturned and what the timeframe for that might be? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 19, 2024 / 8:05AM, GSK.L - GSK plc at Bank of America Global Healthcare Conference

Question: Graham Parry - Bank of America - Analyst : I guess, and people we sort of hope for a settlement but roughly about 90% of the claims are sitting in that Delaware appeal decision where an uptake on an appeal is a fairly rare thing. So is there any rational reason why you would settle into you've then -- or you've come up with any kind of settlement until you've actually have that appeal ruling?

Question: Graham Parry - Bank of America - Analyst : And then in terms of the rest of the strategy, so California, I think you've managed to settle all of the individual bellwether cases. Do you see a difference in the different court systems? So California settled, Illinois, you've actually gone to trial in one of you, California is well known as the national plaintiff-friendly state. So does that kind of play into the decision where you settle and where you allow trials to date claims to go?

Question: Graham Parry - Bank of America - Analyst : It's getting close to time, but I have a question I've been getting a lot recently is your HIV competitive dynamic. And so we saw Gilead, they've shown now some six-monthly dose lenacapavir data in prophylaxis setting. Just help us understand how GSK sees that as a threat to firstly Apretude but longer term, the potential for them to have a six-monthly dose treatment paradigm as well?

Question: Graham Parry - Bank of America - Analyst : Great stuff. Well, the clock's telling me that we're out of time. So thanks very much for your time. Thanks for being with us today.