REG - GSK PLC - 1st Quarter Results
26/04/2023 07:00
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RNS Number : 4488X GSK PLC 26 April 2023
GSK momentum continues with strong start to 2023
Q1 2023 performance highlights:
· Sales performance reflected lower COVID-19 solutions sales versus Q1 2022.
Excluding COVID-19 solutions, sales grew +10% CER with strong performance
across Vaccines, Specialty and General Medicines
· Key growth drivers included Shingrix for shingles, meningitis vaccines, oral
two-drug regimen and long-acting HIV medicines, Benlysta in immunology, Nucala
and Trelegy in respiratory, which combined contributed more than 40% of sales
· Total operating profit and total EPS performance reflected the comparison to
Q1 2022 which included the one-off income benefit of the Gilead settlement and
higher Xevudy sales
· Adjusted operating profit was stable at CER, predominately reflecting a 5%
adverse impact following expected lower COVID-19 solutions sales and 4% from
legal provisions primarily relating to royalties
· Adjusted EPS increased +7% CER due to lower non-controlling interests, a lower
effective tax rate, and strong sales growth excluding lower COVID-19 solutions
(which impacted performance by 7%)
· Cash generated from operations £0.3 billion; free cash outflow (£0.7)
billion lower than Q1 2022 primarily due to Gilead settlement income received
in Q1 2022 and timing of profit share payments
· Full-year 2023 guidance affirmed. Dividend of 14p declared for Q1 2023. 56.5p
expected for the full-year 2023
Q1 2023
£m % AER % CER
Vaccines 2,041 22 15
Specialty Medicines 2,236 (29) (33)
General Medicines 2,674 12 9
Turnover 6,951 (3) (8)
Turnover excluding COVID-19 solutions 6,819 16 10
Total operating profit 2,082 (9) (15)
Total continuing EPS 36.8p (1) (8)
Total EPS 36.8p (18) (23)
Adjusted operating profit 2,092 8 -
Adjusted operating margin % 30.1% 3.1 ppts 2.5 ppts
Adjusted EPS 37.0p 15 7
Cash generated from operations 287 (88)
Free cash outflow (689) >(100)
(Financial Performance - Q1 2023 results unless otherwise stated, growth % and
commentary at CER)
R&D delivery and targeted business development support future growth
· Innovative pipeline of 68 vaccines and specialty medicines based on the
science of immune system with 17 in Phase III/registration; four anticipated
2023 approvals (daprodustat in anaemia due to chronic kidney disease, RSV
older adults vaccine, momelotinib in myelofibrosis and Jemperli in first-line
endometrial cancer)
· Four positive phase III/IV data readouts in Q1 2023, including pentavalent
Meningitis ABCWY vaccine candidate; gepotidacin for uncomplicated urinary
tract infections; Jemperli for first-line endometrial cancer and Cabenuva for
HIV treatment
· Proposed acquisition of Bellus Health - provides access to camlipixant,
potential best-in-class and highly selective P2X3 antagonist currently in
phase III development for treatment of refractory chronic cough; exclusive
license agreement signed with Scynexis for Brexafemme, a US FDA approved,
first-in-class antifungal for treatment of vulvovaginal candidiasis
Emma Walmsley, Chief Executive Officer, GSK:
"We have made a strong start to 2023, with excellent performance across
Vaccines, Specialty and General Medicines. We are very focused on our upcoming
launches, including our potential RSV older adult vaccine, and on continuing
to strengthen our pipeline - both organically with several positive late-stage
read-outs already this year, and through targeted business development. This
continued momentum is also supporting our confidence in delivering our medium
and long-term growth ambitions."
The Total results are presented in summary above and on page 6 and Adjusted
results reconciliations are presented on pages 18 and 19. Adjusted results are
a non-IFRS measure excluding discontinued operations and other adjustments
that may be considered in addition to, but not as a substitute for, or
superior to, information presented in accordance with IFRS. Adjusted results
are defined on page 16 and £% or AER% growth, CER% growth, free cash flow,
turnover excluding COVID-19 solutions and other non-IFRS measures are defined
on page 44, COVID-19 solutions are defined on page 44. GSK provides guidance
on an Adjusted results basis only, for the reasons set out on page 16. All
expectations, guidance and targets regarding future performance and dividend
payments should be read together with 'Guidance, assumptions and cautionary
statements' on pages 45 and 46.
The Q1 2022 comparative results are restated from those previously published
to reflect the demerger of Consumer Healthcare in July 2022 see page 33.
2023 guidance
The Company affirms its full-year 2023 guidance at constant exchange rates
(CER). All expectations and full-year growth rates exclude any contributions
from COVID-19 solutions:
Turnover is expected to increase between 6 to 8 per cent
Adjusted operating profit is expected to increase between 10 to 12 per cent
Adjusted earnings per share is expected to increase between 12 to 15 per cent
Taking Q1 2023 performance and the latest expectations for Q2 2023 into
account, GSK now expects first half and second half turnover growth to be
broadly similar and for General Medicines to be broadly flat to slightly down
this year. GSK expects Adjusted operating profit growth to be lower in the
first half of 2023 and higher in the second half, relative to full-year
expectations.
Despite the recovery of healthcare systems, uncertain economic conditions
prevail across many markets in which GSK operates and we continue to expect to
see variability in performance between quarters.
This guidance is supported by the following turnover expectations for full
year 2023 at CER:
Vaccines - expected increase of mid-teens per cent in turnover
Specialty Medicines - expected increase of mid to high single-digit per cent
in turnover
General Medicines - expected to be broadly flat to slightly down
Adjusted Operating profit is expected to grow between 10 to 12 per cent at CER
reflecting Cost of sales and R&D increasing at a rate slightly below
turnover, while SG&A is anticipated to increase at a rate broadly aligned
to turnover, reflecting targeted support for launches and potential launches
including the RSV older adult candidate vaccine. Adjusted earnings per share
is expected to increase between 12 to 15 per cent at CER reflecting favourable
net finance costs and non-controlling interests plus an expected lower tax
rate, at around 15%.
Additional commentary
Dividend policies and expected pay-out ratios remain unchanged for GSK. The
future dividend policies and guidance regarding the expected dividend pay-out
in 2023 for GSK are provided on page 30.
COVID-19 solutions
In Q1 2023, turnover decreased by 8% at CER reflecting the comparison to Q1
2022, which included £1,307 million of COVID-19 solutions sales in the
period. Excluding COVID-19 solutions, turnover increased by 10% at CER. In Q1
2023, Adjusted Operating profit was stable at CER reflecting a 5% adverse
impact from expected lower COVID-19 solutions sales. Based on known binding
agreements with governments, GSK does not anticipate further significant
COVID-19 pandemic-related sales or operating profit in 2023. Consequently, the
Company now expects full-year 2023 turnover growth to be impacted by
approximately 9%, with Adjusted Operating profit growth being reduced between
5% to 6% versus the prior year.
All expectations, guidance and targets regarding future performance and
dividend payments should be read together with 'Guidance, assumptions and
cautionary statements' on pages 45 and 46. If exchange rates were to hold at
the closing rates on 31 March 2023 ($1.24/£1, €1.14/£1 and Yen 165/£1)
for the rest of 2023, the estimated impact on 2023 Sterling turnover growth
for GSK would be stable and if exchange gains or losses were recognised at the
same level as in 2022, the estimated impact on 2023 Sterling Adjusted
Operating Profit growth for GSK would be -1%.
Results presentation
A conference call and webcast for investors and analysts of the quarterly
results will be hosted by Emma Walmsley, CEO, at 12pm GMT on 26 April 2023.
Presentation materials will be published on www.gsk.com prior to the webcast
and a transcript of the webcast will be published subsequently.
Notwithstanding the inclusion of weblinks, information available on the
Company's website, or from non GSK sources, is not incorporated by reference
into this Results Announcement.
Performance: turnover
Turnover Q1 2023
£m Growth Growth
£% CER%
Shingles 833 19 11
Meningitis 280 32 25
Influenza 12 (33) (28)
Established Vaccines 815 10 4
Vaccines excluding COVID-19 solutions 1,940 16 9
COVID-19 solutions: Pandemic vaccines 101 100 100
Vaccines 2,041 22 15
HIV 1,468 24 15
Immunology/Respiratory and Other 601 16 9
Oncology 136 7 2
Specialty Medicines excluding COVID-19 solutions 2,205 21 13
COVID-19 solutions: Xevudy 31 (98) (98)
Specialty Medicines 2,236 (29) (33)
Respiratory 1,767 15 10
Other General Medicines 907 7 7
General Medicines 2,674 12 9
Total 6,951 (3) (8)
Total excluding COVID-19 solutions 6,819 16 10
By Region:
US 3,270 (9) (17)
Europe 1,704 3 (2)
International 1,977 2 2
Total 6,951 (3) (8)
Turnover excluding COVID-19 solutions is a non-IFRS measure defined on page 44
with the reconciliation to the IFRS measure Turnover included in the table
above.
£m AER CER
Vaccines Total Q1 23 2,041 22% 15%
Excluding COVID-19 solutions Q1 23 1,940 1 9
6 %
%
Vaccines grew in all regions. Key growth drivers were geographical expansion
and market growth for Shingrix, and inclusion in National Immunisation
Programmes for Bexsero. Pandemic vaccines sales reflected GSK's share of 2023
contracted European volumes related to a COVID-19 booster vaccine co-developed
with Sanofi.
Shingles Q1 23 833 19% 11%
Shingrix, a vaccine against herpes zoster (shingles), grew in International
and Europe reflecting new launch uptake, demand and favourable pricing mix. US
sales were primarily impacted by unfavourable wholesaler and distributor
inventory movements. Shingrix is now available in 31 countries.
Meningitis Q1 23 280 32% 25%
Strong growth in Meningitis vaccines was primarily driven by Bexsero, our
vaccine against meningitis B, which grew in Europe mainly from inclusion in
National Immunisation Programmes and in International due to an increase in
demand ahead of an anticipated price increase. Menveo, our vaccine against
meningitis strains ACWY, grew in the US primarily due to initial public
stocking of the new liquid formulation and Center for Disease Control (CDC)
purchasing patterns.
Established Vaccines Q1 23 815 10% 4%
Established Vaccines grew mainly in Hepatitis vaccines resulting from
continued travel market recovery in Europe and International, and due to CDC
purchasing patterns in the US. Rotarix, a vaccine to protect infants against
rotavirus, grew in the US primarily driven by initial stocking of the new
liquid formulation by the CDC. Synflorix, our 10-valent vaccine for
pneumococcal disease, declined in the quarter reflecting phasing of public
market supply and lower demand related to decreased birth cohorts in
International.
£m AER CER
Specialty Medicines Total Q1 23 2,236 (29%) (33%)
Excluding COVID-19 solutions Q1 23 2,205 2 1
1 3
% %
Specialty Medicines growth reflected consistent performance, with HIV,
Oncology and Immunology/Respiratory and Other all growing. In the quarter,
there were minimal sales of Xevudy contrasting with strong sales in Q1 2022,
resulting in a drag of 46 (CER) percentage points.
HIV Q1 23 1,468 24% 15%
The performance of HIV benefited from strong patient demand for Oral two-drug
regimen (Oral 2DR) and Long Acting medicines which contributed approximately
two-thirds of the growth. US pricing favourability contributed approximately
one-third of growth, in part driven by favourable prior period Returns and
Rebates (RAR) adjustments in Q1 2023. The inventory build in Q4 2022 has been
slow to deplete, with less than one-third reducing in this quarter, the
remainder is expected to reduce by the half year.
Oral 2DR and Long Acting Q1 23 697 62% 51%
Oral 2DR (Dovato, Juluca) and Long Acting medicines (Cabenuva, Apretude) sales
represented 47% of the total HIV portfolio compared to 36% in Q1 2022. Growth
was primarily driven by sales of Dovato and Cabenuva.
Immunology/Respiratory and Other Q1 23 601 16% 9%
This therapy area includes sales of Benlysta and Nucala, and also sales of
Duvroq (Daprodustat) in Japan. Daprodustat launch in US is expected in the
second half of the year.
Benlysta Q1 23 253 18% 9%
Benlysta, a monoclonal antibody treatment for Lupus, continues to show
consistent growth representing strong underlying demand in US and Europe. This
growth was partially offset in the quarter by the impact of wholesaler
inventory movements in US and International regions.
Nucala Q1 23 347 18% 11%
Nucala, is a IL-5 antagonist monoclonal antibody treatment for severe asthma,
with additional indications including chronic rhinosinusitis with nasal
polyps, eosinophilic granulomatosis with polyangiitis (EGPA) and
hypereosinophilic syndrome (HES). Growth in the quarter reflected patient
demand in severe eosinophilic asthma and for the new indications with ongoing
launches. This growth was partially offset in the US by the impact of
inventory depletion and an unfavourable prior period RAR adjustment.
Oncology Q1 23 136 7% 2%
Oncology growth was driven by Zejula in Europe and Jemperli in US and Europe.
Blenrep growth in Europe was offset by the impact of withdrawal from the US
market in November 2022.
Zejula Q1 23 114 16% 10%
Growth of Zejula, a PARP inhibitor treatment for ovarian cancer, was driven by
Europe and International markets. In the US, first line indication growth was
more than offset by reduction in use in second line following the update to US
prescribing information agreed with the FDA in Q4 2022.
£m AER CER
General Medicines Q1 23 2,674 12% 9%
Growth driven by both Respiratory and Other General Medicines categories,
driven by ongoing demand for Trelegy in all regions in addition to a strong
allergy season in Japan and continued post pandemic recovery of the antibiotic
market in Europe and International regions.
Respiratory Q1 23 1,767 15% 10%
Performance reflects strong growth of Trelegy and the single inhaled triple
therapy class across all regions. Growth also includes the benefits of a
strong allergy season in Japan and the US launch of Flovent authorised generic
in Q2 2022. Favourable US prior period RAR adjustments to Seretide/Advair were
offset by adverse adjustments to Relvar/Breo in the quarter.
Trelegy Q1 23 465 37% 28%
Trelegy, is the most prescribed single inhaler triple therapy (SITT) treatment
for COPD and asthma. Trelegy grew in the period with strong performance across
all regions, reflecting increased patient demand and growth of the SITT
market.
Seretide/Advair Q1 23 339 12% 8%
Seretide/Advair is an ICS/LABA treatment for asthma and COPD. Growth reflected
targeted promotion in certain International markets and the benefit of a
favourable US prior period RAR adjustment, partially offset by the impact of
generic competition in Europe, US and certain International markets.
Other General Medicines Q1 23 907 7% 7%
High single-digit growth reflected strong post pandemic demand for
anti-infectives in Europe and International, with Augmentin growth of 37% AER,
38% CER in the quarter. The impact of ongoing generic competition in this
product group is also offset by Avodart and dermatological product growth,
predominantly in the International region.
By Region
£m AER CER
US Total Q1 23 3,270 (9%) (17%)
Excluding COVID-19 solutions Q1 23 3,270 16% 6%
In the quarter there was a 23 (CER) percentage point drag due to high sales of
Xevudy in Q1 2022, with no COVID-19 solutions sales in Q1 2023. Excluding this
effect there was growth in all product groups. Vaccines grew on Established
Vaccine market recovery and CDC order phasing, offsetting impact of wholesaler
destocking and a strong Q1 2022 comparator on Shingrix growth. Specialty
Medicines growth was driven by strong HIV performance. General Medicines
growth was driven by ongoing performance of Trelegy within the single inhaled
triple therapy class.
£m AER CER
Europe Total Q1 23 1,704 3% (2%)
Excluding COVID-19 solutions Q1 23 1,603 1 1
9 4
% %
In the quarter there was a 16 (CER) percentage point drag due to high sales of
Xevudy in Q1 2022, with all product groups growing strongly excluding this
effect. Vaccines double digit growth reflected Shingrix launches and uptake,
Bexsero national immunisation campaigns in France and Spain and ongoing travel
vaccine recovery. Specialty Medicines double digit growth was driven by HIV,
Benlysta and Nucala including the impact of new indication launches. General
Medicines was driven by Trelegy ongoing growth and Augmentin on strong post
pandemic antibiotic demand.
£m AER CER
International Total Q1 23 1,977 2% 2%
Excluding COVID-19 solutions Q1 23 1 1 1
, 3 4
9 % %
4
6
In the quarter there was a 12 (CER) percentage point drag due to high sales of
Xevudy in Q1 2022, with all product groups growing strongly excluding this
effect. Vaccines double digit growth was driven by Shingrix uptake in Japan
and China and launches in certain other markets. Specialty Medicines grew in
HIV, Oncology and Immunology/Respiratory and Other with Nucala delivering
strong growth in severe eosinophilic asthma and new indications. General
Medicines product group was driven by Respiratory, with Trelegy growth and a
strong allergy season in Japan, Other General Medicines was driven by
Augmentin on strong post pandemic antibiotic demand.
Financial performance
Total Results Q1 2023
£m % AER % CER
Turnover 6,951 (3) (8)
Cost of sales (1,943) (28) (30)
Selling, general and administration (2,143) 18 12
Research and development (1,260) 14 8
Royalty income 180 30 28
Other operating income/(expense) 297
Operating profit 2,082 (9) (15)
Net Finance expense (174)
Share of after tax profit/(loss) of associates and joint ventures (2)
Profit/(loss) on disposal of interest in associates 1
Profit before taxation 1,907 (9) (15)
Taxation (276)
Tax rate % 14.5%
Profit after taxation 1,631 (8) (14)
Profit attributable to non-controlling interests 141
Profit attributable to shareholders 1,490
1,631 (8) (14)
Earnings per share 36.8p (1) (8)
The Total Results are on a continuing basis. The Q1 2022 comparative results
have been restated on a consistent basis from those previously published to
reflect the demerger of the Consumer Healthcare business (see page 33).
Financial Performance - Q1 2023 results unless otherwise stated, growth % and
commentary at CER.
Adjusted results
Reconciliations between Total results and Adjusted results for Q1 2023 and Q1
2022 are set out on pages 18 and 19.
Q1 2023
£m % AER % CER
Turnover 6,951 (3) (8)
Cost of sales (1,752) (31) (32)
Selling, general and administration (2,065) 17 10
Research and development (1,222) 12 6
Royalty income 180 30 28
Adjusted operating profit 2,092 8 -
Adjusted profit before taxation 1,920 10 2
Taxation (303) 6 (2)
Adjusted profit after taxation 1,617 11 3
Adjusted profit attributable to non-controlling interests 121
Adjusted profit attributable to shareholders 1,496
1,617 11 3
Earnings per share 37.0p 15 7
Q1 2023
£m AER CER
Cost of sales Total 1,943 (28%) (30%)
% of sales 28.0% (9.8%) (8.9%)
Adjusted 1,752 (31%) (32%)
% of sales 25.2% (9.9%) (9.1%)
The decrease in Total and Adjusted cost of sales as a percentage of sales
primarily reflected lower sales of lower margin Xevudy compared to Q1 2022.
This was partly offset by an unfavourable comparator to a one-time benefit
from inventory adjustments in Q1 2022 as well as higher freight costs.
Q1 2023
£m AER CER
Selling, general & administration Total 2,143 18% 12%
% of sales 30.8% 5.6% 5.5%
Adjusted 2,065 17% 10%
% of sales 29.7% 5.1% 4.9%
Growth in Total and Adjusted SG&A primarily reflected an increase in legal
provisions primarily relating to the Zejula royalty dispute((1)) resulting in
an increase of 4 ppts and an increased level of launch investment in Specialty
Medicines particularly HIV and Vaccines including Shingrix to drive
post-pandemic recovery demand and support market expansion. Growth was partly
offset by favourable comparison due to impairment provisions relating to
Russia and Ukraine in Q1 2022 and the continuing benefit of restructuring and
tight control of ongoing costs.
Q1 2023
£m AER CER
Research & development Total 1,260 14% 8%
% of sales 18.1% 2.8% 2.7%
Adjusted 1,222 12% 6%
% of sales 17.6% 2.4% 2.4%
Growth in Total and Adjusted R&D reflected increased investment across the
Vaccines clinical development portfolio, particularly in pneumococcal
programmes acquired as part of the Affinivax Inc (Affinivax) acquisition, mRNA
technology platforms and the phase II MMR programme.
In the Specialty Medicines portfolio, there was increased investment in the
early stage research portfolio, particularly CCL17 for osteo arthritic pain
and IL18 for atopic dermatitis and in Jemperli, with preparation for new phase
II/III trials in rectal and colon cancer as well as the ongoing trials in
endometrial cancer. In addition, there was increased investment in
momelotinib, a potential new treatment of myelofibrosis patients with anaemia,
the phase III respiratory programme for depemokimab, a potential new medicine
to treat a range of eosinophil-driven diseases and for bepirovirsen, the study
in chronic hepatitis B. These increases in investment were partly offset by
decreases related to the completion of late-stage clinical development
programmes for otilimab and Cell & Gene therapy and reduced R&D
investment in Blenrep versus Q1 2022.
Q1 2023
£m AER CER
Royalty income Total 180 30% 28%
Adjusted 180 30% 28%
Growth in Total and Adjusted royalty income primarily reflected the settlement
and licensing agreement with Gilead Sciences Inc. (Gilead) announced on 1
February 2022 and included Gardasil royalty income of £71 million.
(1) See update on Legal matters on page 29.
Q1 2023
£m AER CER
Other operating (expense)/income Total 297 (50%) (52%)
The decrease primarily reflected an unfavourable comparison to the upfront
income in Q1 2022 of £0.9 billion received from the settlement with Gilead.
Net other operating income included an accounting credit of £271 million (Q1
2022: £335 million charge) arising from the remeasurement of contingent
consideration liabilities and the liabilities for the Pfizer, Inc. (Pfizer)
put option and Pfizer and Shionogi & Co. Ltd (Shionogi) preferential
dividends in ViiV Healthcare.
Q1 2023
£m AER CER
Operating profit Total 2,082 (9%) (15%)
% of sales 30.0% (1.9%) (2.4%)
Adjusted 2,092 8% -
% of sales 30.1% 3.1% 2.5%
Total operating profit margin was down 1.9 ppts at AER and 2.4 ppts at CER
primarily reflecting an unfavourable comparison due to the £0.9 billion
upfront income received from the settlement with Gilead in Q1 2022, partly
offset by remeasurement credits on contingent consideration liabilities.
Adjusted profit was impacted by lower sales of COVID-19 solutions sales which
led to a drag of 5% AER and CER but increased the Adjusted operating profit
margin by approximately 3.9 ppts at AER and CER. Excluding COVID-19 Solutions,
Adjusted operating profit benefited from strong sales across all three product
areas but margin was impacted by increased legal charges in the quarter
primarily relating to the Zejula royalty dispute and an unfavourable
comparison to a one-time benefit from inventory adjustments in Q1 2022.
Contingent consideration cash payments made to Shionogi and other companies
reduce the balance sheet liability. Total contingent consideration cash
payments in Q1 2023 amounted to £291 million (Q1 2022: £211 million). These
included cash payments made to Shionogi of £287 million (Q1 2022: £208
million).
Q1 2023
£m AER CER
Adjusted operating profit by business Commercial Operations 3,375 8% 1%
% of sales 48.6% 5.2% 4.3%
R&D (1,232) 13% 6%
Commercial Operations Adjusted operating profit reflected lower COVID-19
solutions sales, primarily Xevudy. Sales declined 8% with 19 ppts AER / 18
ppts CER drag from COVID-19 solutions sales. Operating profit margin
benefitted from product mix upside (with minimal Xevudy sales) and increased
royalty income, partly offset by increased investment in growth and launch
assets as well as an increase in legal provisions.
The R&D segment operating expenses primarily reflected increased
investment in the Vaccines clinical development portfolio, particularly in
pneumococcal programmes, the mRNA technology platforms and the phase II MMR
programme. This was partly offset by decreases related to the completion of
late-stage clinical development programmes for otilimab and Cell & Gene
therapy and reduced R&D investment in Blenrep versus Q1 2022.
Q1 2023
£m AER CER
Net finance costs Total 174 (12%) (16%)
Adjusted 170 (14%) (18%)
Total net finance costs decreased by £24 million compared to Q1 2022.
Adjusted net finance costs decreased by £28 million compared to Q1 2022. The
decrease is mainly driven by the net savings from maturing bonds including the
Sterling Notes repurchase in Q4 2022 and higher interest income on cash.
Q1 2023
£m AER CER
Taxation Total 276 (15%) (21%)
Tax rate % 14.5%
Adjusted 303 6% (2%)
Tax rate % 15.8%
The effective tax rate impact is broadly in line with expectations for the
quarter. Issues related to taxation are described in Note 14, 'Taxation' in
the Annual Report 2022. The Group continues to believe it has made adequate
provision for the liabilities likely to arise from periods that are open and
not yet agreed by relevant tax authorities. The ultimate liability for such
matters may vary from the amounts provided and is dependent upon the outcome
of agreements with relevant tax authorities.
Q1 2023
£m AER CER
Non-controlling interests Total 141 (49%) (53%)
Adjusted 121 (25%) (32%)
The decrease in Total profit from continuing operations allocated to
non-controlling interest was primarily due to lower allocation of ViiV
Healthcare profits of £140 million (Q1 2022: £227 million), partly offset by
decreased credits for remeasurement of contingent consideration liabilities,
as well as lower net profits in some of the Group's other entities with
non-controlling interests.
The decrease in Adjusted profit from continuing operations allocated to
non-controlling interest primarily reflected lower profits in some of the
Group's entities with non-controlling interests partly offset by an increased
allocation of ViiV Healthcare profits of £120 million (Q1 2022: £113
million).
Q1 2023
£m AER CER
Earnings per share Total 36.8p (1%) (8%)
Adjusted 37.0p 15% 7%
The decrease in Total EPS primarily reflected an unfavourable comparison due
to upfront income received from the settlement with Gilead in Q1 2022. This
was partly offset by remeasurement credits for contingent consideration
liabilities compared to charges in Q1 2022, lower non-controlling interests
and lower effective tax rate.
Adjusted EPS reflected strong growth in sales across all product areas
excluding COVID-19 solutions, higher royalty income, lower non-controlling
interests and a lower effective tax rate. This was partly offset by increased
legal charges primarily relating to royalties and investment behind launches
in Specialty Medicines including HIV and Vaccines plus higher supply chain
costs, freight and distribution costs. Decline in lower margin COVID-19
solutions sales was a drag on Adjusted EPS growth of 7 ppts at AER and CER.
Currency impact on Q1 2023 results
The results for Q1 2023 are based on average exchange rates, principally
£1/$1.22, £1/€1.14 and £1/Yen 162. Comparative exchange rates are given
on page 31. The period-end exchange rates were £1/$1.24, £1/€1.14 and
£1/Yen 165.
In Q1 2023, turnover was down 3% at AER and 8% at CER. Total EPS from
continuing operations was 36.8p compared with 37.3p in Q1 2022. Adjusted EPS
was 37.0p compared with 32.3p in Q1 2022, up 15% at AER and 7% at CER. The
favourable currency impact primarily reflected the weakening of Sterling
against the US Dollar and the Euro. Exchange gains or losses on the settlement
of intercompany transactions had a one percent adverse impact on the eight
percentage point favourable currency impact on Adjusted EPS.
Cash generation
Cash flow
Q1 2023 Q1 2022
£m £m
Cash generated from operations attributable to 287 2,352
continuing operations (£m)
Cash generated from operations attributable to - 403
discontinued operations (£m)
Total cash generated from operations (£m) 287 2,755
Net cash inflow/(outflow) from operating activities from 53 2,206
continuing operations (£m)
Net cash inflow/(outflow) from operating activities from - 336
discontinued operations (£m)
Total net cash generated from operating activities (£m) 53 2,542
Free cash inflow/(outflow) from continuing operations* (£m) (689) 1,477
Free cash flow from continuing operations growth (%) >(100)%
Free cash flow conversion from continuing operations* (%) 3% 96%
Total net debt** (£m) (17,950) (19,351)
* Free cash flow from continuing operations and free cash flow conversion are
defined on page 44.
** Net debt is analysed on page 34.
Q1 2023
Cash generated from operating activities from continuing operations was £287
million (Q1 2022: £2,352 million). The decrease primarily reflected an
unfavourable comparison due to the upfront income from the settlement with
Gilead received in Q1 2022, unfavourable timing of profit share payments for
Xevudy, increase in seasonal inventory and lower payable balances reflecting
increased investment in 2022.
Total cash payments to Shionogi in relation to the ViiV Healthcare contingent
consideration liability in the quarter were £287 million (Q1 2022: £208
million), all of which was recognised in cash flows from operating activities.
These payments are deductible for tax purposes.
Free cash outflow was £689 million for the quarter (Q1 2022: £1,477 million
inflow). The decrease primarily reflected an unfavourable comparison due to
the upfront income from the settlement with Gilead received in Q1 2022,
unfavourable timing of profit share payments for Xevudy, increase in seasonal
inventory, lower payable balances reflecting increased investment in 2022 and
higher tax payments.
Total Net debt
At 31 March 2023, net debt was £17,950 million, compared with £17,197
million at 31 December 2022, comprising gross debt of £20,905 million and
cash and liquid investments of £2,955 million.
Net debt increased by £0.8 billion primarily due to £0.7 billion free cash
outflow and dividends paid to shareholders of £0.6 billion. This was partly
offset by net favourable exchange impacts of £0.4 billion from the
translation of non-Sterling denominated debt and exchange on other financing
items and £0.1 billion of income received from equity investments.
At 31 March 2023, GSK had short-term borrowings (including overdrafts and
lease liabilities) repayable within 12 months of £4,261 million with loans of
£1,682 million repayable in the subsequent year.
Q1 2023 pipeline highlights (since 1 February 2023)
Medicine/vaccine Trial (indication, presentation) Event
Regulatory approvals or other regulatory action Jesduvroq ASCEND-D (anaemia of chronic kidney disease on dialysis) Regulatory approval (US)
Jemperli GARNET (2L endometrial cancer) Conversion to regular (full) approval (US)
Regulatory submissions or acceptances Nucala Severe asthma Regulatory acceptance (CN)
Jemperli RUBY (1L mismatch repair-deficient/microsatellite instability-high Regulatory acceptance (EU)
(dMMR/MSI-H) endometrial cancer)
Phase III data readouts or other significant events Benlysta Paediatric systemic lupus erythematosus (sub-cutaneous administration) Positive phase II data readout
Jemperli Rectal cancer US FDA Advisory Committee vote to support phase II trial design
Jemperli RUBY (1L endometrial cancer) Phase III data presentation
gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Phase III data presentation
RSV older adult vaccine candidate RSV, older adults aged US FDA Advisory Committee vote
60+ years
MenABCWY (gen 1) Meningitis ABCWY Positive phase III data readout
vaccine candidate
Anticipated news flow
Timing Medicine/vaccine Trial (indication, presentation) Event
H1 2023 daprodustat ASCEND (anaemia of chronic kidney disease) Regulatory decision
(EU)
Jemperli RUBY (1L endometrial cancer) Regulatory submission
(US)
momelotinib MOMENTUM (myelofibrosis with anaemia) Regulatory decision (US)
RSV older adult vaccine candidate RSV, older adults aged Regulatory decision (US)
60+ years
Shingrix Shingles, at-risk adults aged 18+ years Regulatory decision (JP)
H2 2023 bepirovirsen B-Together (hepatitis B virus) Phase IIb data readout
Nucala Nasal polyposis Regulatory submission
(CN, JP)
Blenrep DREAMM-7 (2L+ multiple myeloma) Phase III data readout
Blenrep DREAMM-8 (2L+ multiple myeloma) Phase III data readout
Blenrep DREAMM-7 (2L+ multiple myeloma) Regulatory submission
(US, EU)
Blenrep DREAMM-8 (2L+ multiple myeloma) Regulatory submission
(US, EU)
Jemperli RUBY (1L endometrial cancer) Regulatory decision
(US)
Zejula FIRST (1L maintenance ovarian cancer) Phase III data readout
cabotegravir Pre-exposure prophylaxis, long-acting injectable Regulatory decision (EU)
Vocabria HIV Regulatory decision (CN)
gepotidacin EAGLE-1 (urogenital gonorrhoea) Phase III data readout
gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Regulatory submission (EU)
MenABCWY (gen 2) Meningitis ABCWY Phase II data readout
vaccine candidate
RSV older adult vaccine candidate RSV, older adults aged Regulatory decision
60+ years (EU, JP)
RSV older adult vaccine candidate RSV, older adults aged Phase III data readout
50-59 years
RSV older adult vaccine candidate RSV, older adults aged Regulatory submission
50-59 years (US, EU, JP)
SKYCovione COVID-19 vaccine COVID-19 Regulatory decision (EU)
2024 linerixibat GLISTEN (cholestatic pruritus in primary biliary cholangitis) Phase III data readout
linerixibat GLISTEN (cholestatic pruritus in primary biliary cholangitis) Regulatory submission
(US, EU)
Nucala Severe asthma Regulatory decision (CN)
Nucala Nasal polyposis Regulatory decision (JP)
Nucala MATINEE (chronic obstructive pulmonary disease) Phase III data readout
Nucala MATINEE (chronic obstructive pulmonary disease) Regulatory submission
(US, EU, CN, JP)
Blenrep DREAMM-7 (2L+ multiple myeloma) Regulatory decision
(US, EU)
Blenrep DREAMM-8 (2L+ multiple myeloma) Regulatory decision
(US, EU)
cobolimab COSTAR (non-small cell lung cancer) Phase III data readout
Jemperli RUBY (1L dMMR/MSI-H endometrial cancer) Regulatory decision (EU)
Jemperli RUBY part 2 (1L endometrial cancer) Phase III data readout
Jemperli RUBY part 2 (1L endometrial cancer) Regulatory submission
(US, EU)
momelotinib MOMENTUM (myelofibrosis with anaemia) Regulatory decision (EU)
Zejula ZEAL (1L maintenance NSCLC) Phase III data readout
gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Regulatory decision
(US, EU)
gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Regulatory submission
(JP)
gepotidacin EAGLE-1 (urogenital gonorrhoea) Regulatory submission
(US)
MenABCWY (gen 1) Meningitis ABCWY Regulatory submission (US)
vaccine candidate
RSV older adult vaccine candidate RSV, older adults aged Regulatory decision
50-59 years (US, EU, JP)
Refer to pages 35 to 43 for further details on several key medicines and
vaccines in development by therapy area.
Trust: progress on our six priority areas for responsible business
Building Trust by operating responsibly is integral to GSK's strategy and
culture. This will support growth and returns to shareholders, reduce risk,
and help GSK's people thrive while delivering sustainable health impact at
scale. The Company has identified six Environmental, Social, and Governance
(ESG) focus areas that address what is most material to GSK's business and the
issues that matter the most to its stakeholders. Highlights below include
activity since Full-year and Q4 2022 results. For a full list of progress in
2022, please see the 2022 ESG Performance Report at: https://gsk.to/3V1hwFk.
Access
Commitment: to make GSK's vaccines and medicines available at value-based
prices that are sustainable for the business and implement access strategies
that increase the use of GSK's vaccines and medicines to treat and protect
underserved people.
Progress to date:
· GSK continues to collaborate to support access to its HIV portfolio. For
example, following the signing of a voluntary licensing agreement for
cabotegravir for HIV pre-exposure prophylaxis (PrEP) between ViiV Healthcare
and the Medicines Patent Pool (MPP) in July 2022, the MPP signed subsequent
sub-licence agreements in March 2023 with Aurobindo Pharma Limited, Cipla,
Inc. and Viatris, Inc. - through its subsidiary Mylan - to manufacture generic
versions of cabotegravir long-acting for PrEP. More information can be found
at: https://gsk.to/3LsG72L. (https://gsk.to/3LsG72L)
· Working with GSK's partners, more than 1.2 million children in Ghana, Kenya
and Malawi have received at least one dose of the Company's malaria vaccine,
Mosquirix (RTS,S/AS01 E). In March 2023, Kenya expanded vaccine use beyond the
communities involved in the Malaria Vaccine Immunisation Programme (MVIP),
almost doubling the number of areas where children can access it. All three
countries that were part of the MVIP have now expanded the rollout.
Global health and health security
Commitment: develop novel products and technologies to treat and prevent
priority diseases, including pandemic threats.
Progress to date:
· GSK remains committed to innovation across medicines and vaccines to help get
ahead of antimicrobial resistance, with a number of R&D projects targeting
pathogens deemed 'critical' or 'urgent' by the WHO and US Centers for Disease
Control and Prevention. GSK reinforced its commitment to developing new
antibiotics in high unmet medical need areas when it presented positive
results from the pivotal EAGLE-2 and EAGLE-3 phase III trials for gepotidacin,
an investigational, first-in-class oral antibiotic with a novel mechanism of
action for uncomplicated urinary tract infections (uUTI) in female adults and
adolescents. Escherichia coli (e. coli) bacteria are the main cause of uUTI
but it is showing increasing resistance to antibiotics currently used((1)).
The data were disclosed in an oral presentation at the European Congress of
Clinical Microbiology and Infectious Diseases (ECCMID) in Copenhagen, Denmark.
More information can be found at: https://gsk.to/40yA5lq.
· GSK continued to expand its industry-leading infectious diseases portfolio. In
March 2023, the Company entered an exclusive licence agreement for Brexafemme
(ibrexafungerp tablets), a US FDA-approved, first-in-class antifungal for
treating vulvovaginal candidiasis and for a reduction in the incidence of
recurrent VVC. Brexafemme complements GSK's late-stage antibiotics
gepotidacin, and tebipenem, a potential new treatment for complicated urinary
tract infections. With rates of multi-drug resistant fungal infections rising,
this agreement strengthens the Company's position as an innovation leader in
antimicrobial resistance. More information can be found at:
https://gsk.to/3oHAlkx.
Environment
Commitment: committed to a net zero, nature-positive, healthier planet with
ambitious goals set for 2030 and 2045.
Progress to date:
· The Company has clear and measurable targets to achieve its climate and nature
goals and shared its annual progress as part of GSK's ESG Performance Report.
The Company also published more detail on its carbon reduction pathway and use
of carbon credits, which can be found at: https://gsk.to/3LtovDT.
· The Taskforce on Nature-related Financial Disclosures (TNFD) recently released
its final beta framework for nature-related risk management and disclosure.
GSK sits on the Taskforce, and to pilot the recommendations ahead of the final
framework expected later this year, the Company made an initial disclosure,
focusing on strategy, metrics and targets in its 2022 Annual Report (page 62).
In addition, GSK was included in the TNFD (section 3.1) scenario guidance as
an example of a multinational company taking an advanced approach.
Diversity, equity and inclusion
Commitment: create a diverse, equitable and inclusive workplace; enhance
recruitment of diverse patient populations in GSK clinical trials; and support
diverse communities.
Progress to date:
· Appropriate clinical research representation is critical for advancing the
Company's understanding of new vaccines and medicines to ensure they
positively impact patients' lives. GSK announced results from a 17-year
retrospective study on US clinical trial diversity in February 2023. Results
of the study demonstrate real-world disease epidemiology data, compared to the
conventional standard of US Census data, is a better benchmark to ensure
clinical trial enrolment reflects the populations affected by diseases. GSK
has committed to applying insights from the study and collaborating with
regulators, patients, academics, and other biopharmaceutical companies to make
meaningful progress on clinical trial diversity. As a result, 100% of phase
III trials now include a demographic plan. More information can be found at:
https://gsk.to/40IAGkE.
· GSK is committed to equality of representation so that its workforce reflects
the communities in which it operates and hires, and that GSK leadership
reflects the Company's workforce. In February 2023, GSK communicated its 2022
progress which was also highlighted in the ESG Performance Report:
- Women held 42% of Vice President (VP) and above roles globally, compared with
40% in 2021, bringing the Company closer to its 2025 aspirational target of
45%; Women made up 47% of all employees in 2022 and 50% of all management
roles.
- In the US, GSK has 31.3% of ethnically diverse leaders at the VP level and
above and has met its 2025 aspirational target of at least 30%.
- In the UK, the Company has 14.3% of ethnically diverse leaders at VP and
above, progressing towards its 2025 aspirational target of reaching at least
18%.
Ethical standards
Commitment: promote ethical behaviour across GSK's business by supporting its
employees to do the right thing and working with suppliers that share the
Company's standards and operate responsibly.
· Performance metrics related to ethical standards are updated annually with
details from the most recent year on page 26 of GSK's ESG Performance Report
2022.
Product governance
Commitment: maintain robust quality and safety processes and responsibly use
data and new technologies.
· Performance metrics related to product governance are updated annually with
details from the most recent year on page 30 of GSK's ESG Performance Report
2022.
ESG rating performance
Detailed below is how GSK performs in key ESG ratings.
External benchmark 2020 2021 2022 Comments
S&P Global's Corporate Sustainability Assessment((2)) 87 88 86
2nd in Pharma industry 1st in Pharma industry 2nd in Pharma industry((2))
Access to Medicines Index 4.23 n/a 4.06 Led the bi-annual index since its inception in 2008
Ranked 1st Ranked 1st
Antimicrobial resistance benchmark 86% 84% n/a Led the bi-annual benchmark since inception
Ranked 1st Ranked 1st
CDP Climate Change A- A- A-
CDP Water Security A B B
CDP Forests((3)) (palm oil) n/a B A-
CDP Forests((3)) (timber) n/a B B
CDP supplier engagement rating Leader Leader Leader
Sustainalytics 21.3 18.9 18.8 Lower score represents lower risk
8th in Pharma 5th in Pharma sub-industry group 3rd in Pharma sub-industry group
sub-industry group
MSCI AA AA AA
Moody's ESG solutions 62 61 n/a
2nd in Pharma and Biotech sector 2nd in Pharma and Biotech sector
ISS Corporate Rating B B+ B+
FTSE4Good Member Member Member Member since 2004
ShareAction's Workforce Disclosure Initiative (WDI) 68% 75% 77%
Sector average: 65% Sector average: 70% Sector average: 66%
(1) WHO. Global priority list of antibiotic-resistant bacteria to guide research,
discovery, and development of new antibiotics. 2017; CDC. Antibiotic
resistance threats in the United States. 2019. Available from:
https://www.cdc.gov/drugresistance/pdf/threats-report/2019-ar-threats-report-508.pdf
(Accessed October 2022)
(2) As at 31 March 2023.
(3) CDP Forests assessments introduced in 2021.
Contents Page
Q1 2023 pipeline highlights 11
ESG 13
Total and Adjusted results 16
Income statement 21
Statement of comprehensive income 22
Balance sheet 23
Statement of changes in equity 24
Cash flow statement - three months ended 31 March 2023 25
Sales tables - three months ended 31 March 2023 26
Segment information 28
Legal matters 29
Returns to shareholders 30
Additional information 31
Net assets 32
Discontinued operations 33
Reconciliation of cash flow to movements in net debt 34
Net debt analysis 34
Free cash flow reconciliation 34
R&D commentary 35
Reporting definitions 44
Guidance, assumptions and cautionary statements 45
Independent Auditor's review report to GSK plc 47
Contacts
GSK plc (LSE/NYSE:GSK) is a global biopharma company with a purpose to unite
science, technology, and talent to get ahead of disease together. Find out
more at www.gsk.com.
GSK enquiries:
Media Tim Foley +44 (0) 20 8047 5502 (London)
Kathleen Quinn +1 202 603 5003 (Washington)
Investor Relations Nick Stone +44 (0) 7717 618834 (London)
James Dodwell +44 (0) 7881 269066 (London)
Mick Readey +44 (0) 7990 339653 (London)
Joshua Williams +44 (0) 7385 415719 (London)
Jeff McLaughlin +1 215 589 3774 (Philadelphia)
Frances De Franco +1 215 751 4855 (Philadelphia)
Registered in England & Wales:
No. 3888792
Registered Office:
980 Great West Road
Brentford, Middlesex
TW8 9GS
Total and Adjusted results
Total reported results represent the Group's overall performance.
GSK also uses a number of adjusted, non-IFRS, measures to report the
performance of its business. Adjusted results and other non-IFRS measures may
be considered in addition to, but not as a substitute for or superior to,
information presented in accordance with IFRS. Adjusted results are defined
below and other non-IFRS measures are defined on page 44.
GSK believes that Adjusted results, when considered together with Total
results, provide investors, analysts and other stakeholders with helpful
complementary information to understand better the financial performance and
position of the Group from period to period, and allow the Group's performance
to be more easily compared against the majority of its peer companies. These
measures are also used by management for planning and reporting purposes. They
may not be directly comparable with similarly described measures used by other
companies.
GSK encourages investors and analysts not to rely on any single financial
measure but to review GSK's quarterly results announcements, including the
financial statements and notes, in their entirety.
GSK is committed to continuously improving its financial reporting, in line
with evolving regulatory requirements and best practice. In line with this
practice, GSK expects to continue to review and refine its reporting
framework.
Adjusted results exclude the profits from discontinued operations from the
Consumer Healthcare business (see details on page 33) and the following items
in relation to our continuing operations from Total results, together with the
tax effects of all of these items:
· amortisation of intangible assets (excluding computer software and capitalised
development costs)
· impairment of intangible assets (excluding computer software) and goodwill
· major restructuring costs, which include impairments of tangible assets and
computer software, (under specific Board approved programmes that are
structural, of a significant scale and where the costs of individual or
related projects exceed £25 million), including integration costs following
material acquisitions
· transaction-related accounting or other adjustments related to significant
acquisitions
· proceeds and costs of disposal of associates, products and businesses;
significant settlement income; significant legal charges (net of insurance
recoveries) and expenses on the settlement of litigation and government
investigations; other operating income other than royalty income, and other
items
Costs for all other ordinary course smaller scale restructuring and legal
charges and expenses from continuing operations are retained within both Total
and Adjusted results.
As Adjusted results include the benefits of Major restructuring programmes but
exclude significant costs (such as significant legal, major restructuring and
transaction items) they should not be regarded as a complete picture of the
Group's financial performance, which is presented in Total results. The
exclusion of other Adjusting items may result in Adjusted earnings being
materially higher or lower than Total earnings. In particular, when
significant impairments, restructuring charges and legal costs are excluded,
Adjusted earnings will be higher than Total earnings.
GSK has undertaken a number of Major restructuring programmes in response to
significant changes in the Group's trading environment or overall strategy or
following material acquisitions. Within the Pharmaceuticals sector, the highly
regulated manufacturing operations and supply chains and long lifecycle of the
business mean that restructuring programmes, particularly those that involve
the rationalisation or closure of manufacturing or R&D sites are likely to
take several years to complete. Costs, both cash and non-cash, of these
programmes are provided for as individual elements are approved and meet the
accounting recognition criteria. As a result, charges may be incurred over a
number of years following the initiation of a Major restructuring programme.
Significant legal charges and expenses are those arising from the settlement
of litigation or government investigations that are not in the normal course
and materially larger than more regularly occurring individual matters. They
also include certain major legacy matters.
Reconciliations between Total and Adjusted results, providing further
information on the key Adjusting items, are set out on pages 18 and 19.
GSK provides earnings guidance to the investor community on the basis of
Adjusted results. This is in line with peer companies and expectations of the
investor community, supporting easier comparison of the Group's performance
with its peers. GSK is not able to give guidance for Total results as it
cannot reliably forecast certain material elements of the Total results,
particularly the future fair value movements on contingent consideration and
put options that can and have given rise to significant adjustments driven by
external factors such as currency and other movements in capital markets.
ViiV Healthcare
ViiV Healthcare is a subsidiary of the Group and 100% of its operating results
(turnover, operating profit, profit after tax) are included within the Group
income statement.
Earnings are allocated to the three shareholders of ViiV Healthcare on the
basis of their respective equity shareholdings (GSK 78.3%, Pfizer 11.7% and
Shionogi 10%) and their entitlement to preferential dividends, which are
determined by the performance of certain products that each shareholder
contributed. As the relative performance of these products changes over time,
the proportion of the overall earnings allocated to each shareholder also
changes. In particular, the increasing proportion of sales of dolutegravir and
cabotegravir-containing products has a favourable impact on the proportion of
the preferential dividends that is allocated to GSK. Adjusting items are
allocated to shareholders based on their equity interests. GSK was entitled to
approximately 83% of the Total earnings and 82% of the Adjusted earnings of
ViiV Healthcare for 2022.
As consideration for the acquisition of Shionogi's interest in the former
Shionogi-ViiV Healthcare joint venture in 2012, Shionogi received the 10%
equity stake in ViiV Healthcare and ViiV Healthcare also agreed to pay
additional future cash consideration to Shionogi, contingent on the future
sales performance of the products being developed by that joint venture,
dolutegravir and cabotegravir. Under IFRS 3 'Business combinations', GSK was
required to provide for the estimated fair value of this contingent
consideration at the time of acquisition and is required to update the
liability to the latest estimate of fair value at each subsequent period end.
The liability for the contingent consideration recognised in the balance sheet
at the date of acquisition was £659 million. Subsequent remeasurements are
reflected within other operating income/(expense) and within Adjusting items
in the income statement in each period.
Cash payments to settle the contingent consideration are made to Shionogi by
ViiV Healthcare each quarter, based on the actual sales performance and other
income of the relevant products in the previous quarter. These payments reduce
the balance sheet liability and hence are not recorded in the income
statement. The cash payments made to Shionogi by ViiV Healthcare in Q1 2023
were £287 million.
As the liability is required to be recorded at the fair value of estimated
future payments, there is a significant timing difference between the charges
that are recorded in the Total income statement to reflect movements in the
fair value of the liability and the actual cash payments made to settle the
liability.
Further explanation of the acquisition-related arrangements with ViiV
Healthcare are set out on pages 71 and 72 of the Annual Report 2022.
Adjusting items
The reconciliations between Total results and Adjusted results for Q1 2023 and
Q1 2022 are set out below.
Three months ended 31 March 2023
Total Intangible Intangible Major Trans- Divest- Adjusted
results amort- impair- restruct- action- ments, results
£m isation ment uring related significant £m
£m £m £m £m legal and
other
items
£m
Turnover 6,951 6,951
Cost of sales (1,943) 151 35 5 (1,752)
Gross profit 5,008 151 35 5 5,199
Selling, general and administration (2,143) 69 9 (2,065)
Research and development (1,260) 18 16 4 (1,222)
Royalty income 180 180
Other operating income/(expense) 297 (271) (26) -
Operating profit 2,082 169 16 108 (271) (12) 2,092
Net finance cost (174) 4 (170)
Share of after tax profit/(loss) of associates (2) (2)
and joint venture
Profit/(loss) on disposal of interest in associates 1 (1) -
Profit before taxation 1,907 169 16 108 (271) (9) 1,920
Taxation (276) (36) (4) (22) 15 20 (303)
Tax rate % 14.5% 15.8%
Profit after taxation from continuing 1,631 133 12 86 (256) 11 1,617
operations
Profit attributable to non-controlling 141 - - - (20) - 121
interests from continuing operations
Profit attributable to shareholders from 1,490 133 12 86 (236) 11 1,496
continuing operations
1,631 133 12 86 (256) 11 1,617
Earnings per share from continuing operations 36.8p 3.3p 0.3p 2.1p (5.8)p 0.3p 37.0p
Weighted average number of shares (millions) 4,044 4,044
Three months ended 31 March 2022((a))
Total Profit from Intangible Intangible Major Trans- Divest- Adjusted
results discon- amort- impair- restruct- action- ments, results
£m tinued isation ment uring related significant £m
operations £m £m £m £m legal and
£m other
items
£m
Turnover 7,190 7,190
Cost of sales (2,717) 163 15 12 (2,527)
Gross profit 4,473 163 15 12 4,663
Selling, general and administration (1,812) 28 14 (1,770)
Research and development (1,103) 23 (16) 8 (1,088)
Royalty income 138 138
Other operating income/(expense) 597 335 (932) -
Operating profit 2,293 186 (16) 51 347 (918) 1,943
Net finance cost (198) (198)
Share of after tax profit/(loss) of associates and joint venture (1) (1)
Profit before taxation 2,094 186 (16) 51 347 (918) 1,744
Taxation (323) (39) 3 (12) (53) 137 (287)
Tax rate % 15.4% 16.5%
Profit after taxation from 1,771 147 (13) 39 294 (781) 1,457
continuing operations
Profit after taxation from 396 (396) -
discontinued operations and other
gains/(losses) from the demerger
Profit after taxation from 396 (396) -
discontinued operations
Total profit after taxation 2,167 (396) 147 (13) 39 294 (781) 1,457
for the period
Profit attributable to non-controlling 275 (114) 161
interest from continuing operations
Profit attributable to shareholders 1,496 147 (13) 39 408 (781) 1,296
from continuing operations
Profit attributable to non-controlling 90 (90) -
interest from discontinued
operations
Profit attributable to shareholders 306 (306) -
from discontinued operations
2,167 (396) 147 (13) 39 294 (781) 1,457
Total profit attributable to 365 (90) (114) 161
non-controlling interests
Total profit attributable to 1,802 (306) 147 (13) 39 408 (781) 1,296
shareholders
2,167 (396) 147 (13) 39 294 (781) 1,457
Earnings per share from continuing 37.3p 3.7p (0.3)p 1.0p 10.2p (19.6)p 32.3p
operations
Earnings per share from 7.6p (7.6)p -
discontinued operations
Total earnings per share 44.9p (7.6)p 3.7p (0.3)p 1.0p 10.2p (19.6)p 32.3p
Weighted average number 4,016 4,016
of shares (millions)
(a) The Q1 2022 comparative results have been restated on a consistent basis from
those previously published to reflect the demerger of the Consumer Healthcare
business
(see page 33) and the impact of Share Consolidation implemented on 18 July
2022 (see page 33).
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred in Q1
2023 were £108 million (Q1 2022: £51 million), analysed as follows:
Q1 2023 Q1 2022
Cash Non- Total Cash Non- Total
£m cash £m £m cash £m
£m £m
Separation Preparation restructuring 37 47 84 11 37 48
programme
Significant acquisitions 21 1 22 - - -
Legacy programmes - 2 2 2 1 3
58 50 108 13 38 51
The Separation Preparation programme incurred cash charges of £37 million
primarily from the restructuring of some administrative functions as well as
Global Supply Chain and R&D. The non-cash charges of £47 million
primarily reflected the write-down of assets in administrative as well as
manufacturing locations.
The benefit in Q1 2023 from restructuring programmes was £0.1 billion,
primarily relating to the Separation Preparation restructuring programme. The
programme has delivered £0.9 billion of annual savings to date and targets to
deliver £1.0 billion by 2023, with total costs estimated at £2.4 billion, of
which £1.6 billion is expected to be cash costs.
Costs of significant acquisitions relate to integration costs of Sierra
Oncology Inc. (Sierra) and Affinivax which were acquired in Q3 2022.
Transaction-related adjustments
Transaction-related adjustments from continuing operations resulted in a net
credit of £271 million (Q1 2022: £347 million charge) all of which related
to accounting (credits)/charge for the remeasurement of contingent
consideration liabilities and the liabilities for the Pfizer put option and
Pfizer and Shionogi preferential dividends in ViiV Healthcare.
Charge/(credit) Q1 2023 Q1 2022
£m £m
Contingent consideration on former Shionogi-ViiV Healthcare joint Venture (64) 256
(including Shionogi preferential dividends)
ViiV Healthcare put options and Pfizer preferential dividends (105) 32
Contingent consideration on former Novartis Vaccines business (69) 44
Contingent consideration on acquisition of Affinivax (33) -
Other adjustments - 15
Total transaction-related charges (271) 347
The £64 million credit relating to the contingent consideration for the
former Shionogi-ViiV Healthcare joint venture represented a reduction in the
valuation of the contingent consideration due to Shionogi, as a result of a
credit of £172 million primarily from exchange rates as well as sales
forecasts, partly offset by the unwind of the discount for £108 million. The
£105 million credit relating to the ViiV Healthcare put option and Pfizer
preferential dividends represented a reduction in the valuation of the put
option primarily as a result of updated exchange rates as well as updated
sales forecasts and lower cash balances.
The ViiV Healthcare contingent consideration liability is fair valued under
IFRS. An explanation of the accounting for the non-controlling interests in
ViiV Healthcare is set out on page 17.
The £69 million credit relating to the contingent consideration on the former
Novartis Vaccines business primarily relates to changes to future sales
forecasts.
Divestments, significant legal charges, and other items
Divestments, significant legal charges and other items primarily included
dividend and distribution income received from investments partly offset by
fair value loss of £65 million on the retained stake in Haleon.
Financial information
Income statements
Q1 2023 Q1 2022((a))
£m £m
TURNOVER 6,951 7,190
Cost of sales (1,943) (2,717)
Gross profit 5,008 4,473
Selling, general and administration (2,143) (1,812)
Research and development (1,260) (1,103)
Royalty income 180 138
Other operating income/(expense) 297 597
OPERATING PROFIT 2,082 2,293
Finance income 29 7
Finance expense (203) (205)
Share of after tax profit/(loss) of associates and joint ventures (2) (1)
Profit/(loss) on disposal of interests in associates 1 -
PROFIT BEFORE TAXATION 1,907 2,094
Taxation (276) (323)
Tax rate % 14.5% 15.4%
PROFIT AFTER TAXATION FROM CONTINUING OPERATIONS 1,631 1,771
Profit after taxation from discontinued operations and other gains - 396
from the demerger
PROFIT AFTER TAXATION FROM DISCONTINUED OPERATIONS - 396
PROFIT AFTER TAXATION FOR THE PERIOD 1,631 2,167
Profit attributable to non-controlling interests from continuing 141 275
operations
Profit attributable to shareholders from continuing operations 1,490 1,496
Profit attributable to non-controlling interests from discontinued - 90
operations
Profit attributable to shareholders from discontinued operations - 306
1,631 2,167
Profit attributable to non-controlling interests 141 365
Profit attributable to shareholders 1,490 1,802
1,631 2,167
EARNINGS PER SHARE FROM CONTINUING OPERATIONS 36.8p 37.3p
EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS - 7.6p
TOTAL EARNINGS PER SHARE 36.8p 44.9p
Diluted earnings per share from continuing operations 36.5p 36.9p
Diluted earnings per share from discontinued operations - 7.5p
Total diluted earnings per share 36.5p 44.4p
(a) The Q1 2022 comparative results have been restated on a consistent basis from
those previously published to reflect the demerger of the Consumer Healthcare
business
(see page 33) and the impact of Share Consolidation implemented on 18 July
2022 (see page 33).
Statement of comprehensive income
Q1 2023 Q1 2022((a))
£m £m
Total profit for the period 1,631 2,167
Items that may be reclassified subsequently to continuing operations income
statement:
Exchange movements on overseas net assets and net investment 87 (19)
hedges
Reclassification of exchange movements on liquidation or disposal (3) -
of overseas subsidiaries and associates
Fair value movements on cash flow hedges - 2
Reclassification of cash flow hedges to income statement 1 (1)
85 (18)
Items that will not be reclassified to continuing operations income statement:
Exchange movements on overseas net assets of non-controlling (14) 3
interests
Fair value movements on equity investments (168) (543)
Tax on fair value movements on equity investments 22 47
Remeasurement gains/(losses) on defined benefit plans 350 313
Tax on remeasurement losses/(gains) on defined benefit plans (87) (73)
103 (253)
Other comprehensive expense for the period from continuing 188 (271)
operations
Other comprehensive income for the period from discontinued - 435
operations
Total comprehensive income for the period 1,819 2,331
Total comprehensive income for the period attributable to:
Shareholders 1,692 1,962
Non-controlling interests 127 369
1,819 2,331
(a) The Q1 2022 comparative results have been restated on a consistent basis from
those previously published to reflect the demerger of the Consumer Healthcare
business
(see page 33).
Balance sheet
31 March 2023 31 December 2022
£m £m
ASSETS
Non-current assets
Property, plant and equipment 8,758 8,933
Right of use assets 656 687
Goodwill 6,857 7,046
Other intangible assets 14,160 14,318
Investments in associates and joint ventures 70 74
Other investments 1,270 1,467
Deferred tax assets 5,610 5,658
Other non-current assets 1,496 1,194
Total non-current assets 38,877 39,377
Current assets
Inventories 5,355 5,146
Current tax recoverable 296 405
Trade and other receivables 6,833 7,053
Derivative financial instruments 125 190
Current equity investments 4,020 4,087
Liquid investments 65 67
Cash and cash equivalents 2,890 3,723
Assets held for sale 135 98
Total current assets 19,719 20,769
TOTAL ASSETS 58,596 60,146
LIABILITIES
Current liabilities
Short-term borrowings (4,261) (3,952)
Contingent consideration liabilities (962) (1,289)
Trade and other payables (14,268) (16,263)
Derivative financial instruments (98) (183)
Current tax payable (424) (471)
Short-term provisions (683) (652)
Total current liabilities (20,696) (22,810)
Non-current liabilities
Long-term borrowings (16,644) (17,035)
Corporation tax payable (123) (127)
Deferred tax liabilities (290) (289)
Pensions and other post-employment benefits (2,480) (2,579)
Other provisions (537) (532)
Contingent consideration liabilities (5,622) (5,779)
Other non-current liabilities (892) (899)
Total non-current liabilities (26,588) (27,240)
TOTAL LIABILITIES (47,284) (50,050)
NET ASSETS 11,312 10,096
EQUITY
Share capital 1,348 1,347
Share premium account 3,449 3,440
Retained earnings 5,655 4,363
Other reserves 1,368 1,448
Shareholders' equity 11,820 10,598
Non-controlling interests (508) (502)
TOTAL EQUITY 11,312 10,096
Statement of changes in equity
Share Share Retained Other Share- Non- Total
capital premium earnings reserves holder's controlling equity
£m £m £m £m equity interests £m
£m £m
At 1 January 2023 1,347 3,440 4,363 1,448 10,598 (502) 10,096
Profit for the period 1,490 1,490 141 1,631
Other comprehensive 336 (134) 202 (14) 188
income/(expense) for the period
Total comprehensive income/(expense) 1,826 (134) 1,692 127 1,819
for the period
Distributions to non-controlling interests (140) (140)
Contributions from non-controlling 7 7
interests
Dividends to shareholders (555) (555) (555)
Realised after tax losses on disposal (13) 13 -
or liquidation of equity investments
Share of associates and joint ventures 2 (2) -
realised profit/(loss) on disposal of equity investments
Shares issued 1 7 8 8
Write-down on shares held by ESOP (48) 48 -
Trusts
Shares acquired by ESOP Trusts 2 1 (3) -
Share-based incentive plans 79 79 79
Hedging gain/loss after taxation (2) (2) (2)
transferred to non-financial assets
At 31 March 2023 1,348 3,449 5,655 1,368 11,820 (508) 11,312
At 1 January 2022 1,347 3,301 7,944 2,463 15,055 6,287 21,342
Profit for the period 1,802 1,802 365 2,167
Other comprehensive 507 (347) 160 4 164
income/(expense) for the period
Total comprehensive income/(expense) 2,309 (347) 1,962 369 2,331
for the period
Distributions to non-controlling interests (213) (213)
Contributions from non-controlling 8 8
interests
Dividends to shareholders (952) (952) (952)
Realised after tax losses on disposal (10) 10 -
of equity investments
Shares issued 17 17 17
Write-down on shares held by ESOP (457) 457 -
Trusts
Shares acquired by ESOP Trusts 118 704 (822) -
Share-based incentive plans 99 99 99
At 31 March 2022 1,347 3,436 9,637 1,761 16,181 6,451 22,632
Cash flow statement - three months ended 31 March 2023
Q1 2023 Q1 2022((a))
£m £m
Profit after tax from continuing operations 1,631 1,771
Tax on profits 276 323
Share of after tax loss/(profit) of associates and joint ventures 2 1
(Profit)/loss on disposal of interest in associates and joint ventures (1) -
Net finance expense 174 198
Depreciation, amortisation and other adjusting items 640 418
Decrease/(Increase) in working capital (840) (479)
Contingent consideration paid (290) (185)
Increase/(decrease) in other net liabilities (excluding contingent (1,305) 305
consideration paid)
Cash generated from operations attributable to continuing operations 287 2,352
Taxation paid (234) (146)
Net cash inflow/(outflow) from continuing operating activities 53 2,206
Cash generated from operations attributable to discontinued operations - 403
Taxation paid from discontinued operations - (67)
Net operating cash flows attributable to discontinued operations - 336
Total net cash inflows/(outflows) from operating activities 53 2,542
Cash flow from investing activities
Purchase of property, plant and equipment (233) (193)
Proceeds from sale of property, plant and equipment 7 6
Purchase of intangible assets (296) (377)
Proceeds from sale of intangible assets 4 5
Purchase of equity investments (56) (45)
Proceeds from sale of equity investments 10 -
Contingent consideration paid (1) (26)
Disposal of businesses (6) 1
Interest received 29 8
Proceeds from disposal of associates and joint ventures 1 -
Dividend and distributions from investments 132 -
Dividends from associates and joint ventures 1 -
Net cash inflow/(outflow) from continuing investing activities (408) (621)
Net investing cash flows attributable to discontinued operations - (2,972)
Total net cash inflow/(outflow) from investing activities (408) (3,593)
Cash flow from financing activities
Issue of share capital 8 17
Decrease in long-term loans (144) -
Net increase/(repayment) of short-term loans 552 (249)
Repayment of lease liabilities (47) (51)
Interest paid (120) (82)
Dividends paid to shareholders (555) (952)
Shares acquired by ESOP Trusts (2) (7)
Distribution to non-controlling interests (140) (78)
Contributions from non-controlling interests 7 8
Other financing items 123 91
Net cash inflow/(outflow) from continuing financing activities (318) (1,303)
Net financing cash flows attributable to discontinued operations - 9,276
Total net cash inflow/(outflow) from financing activities (318) 7,973
Increase/(decrease) in cash and bank overdrafts in the period (673) 6,922
Cash and bank overdrafts at beginning of the period 3,425 3,817
Exchange adjustments (31) 12
Increase/(decrease) in cash and bank overdrafts (673) 6,922
Cash and bank overdrafts at end of the period 2,721 10,751
Cash and bank overdrafts at end of the period comprise:
Cash and cash equivalents 2,890 10,967
Overdrafts (169) (216)
2,721 10,751
(a) The Q1 2022 comparative results have been restated on a consistent basis from
those previously published to reflect the demerger of the Consumer Healthcare
business
(see page 33).
Vaccines turnover - three months ended 31 March 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Shingles 833 19 11 508 4 (5) 214 34 27 111 >100 >100
Shingrix 833 19 11 508 4 (5) 214 34 27 111 >100 >100
Meningitis 280 32 25 119 20 10 115 39 33 46 53 50
Bexsero 218 34 26 74 12 3 110 39 34 34 89 78
Menveo 59 40 31 45 36 24 4 33 - 10 67 83
Other 3 (57) (57) - - - 1 - - 2 (67) (67)
Influenza 12 (33) (28) 1 - - - - - 11 (35) (29)
Fluarix, FluLaval 12 (33) (28) 1 - - - - - 11 (35) (29)
Established Vaccines 815 10 4 353 17 7 193 16 12 269 (1) (4)
Infanrix, Pediarix 177 1 (5) 108 (4) (12) 33 14 14 36 6 -
Boostrix 139 10 3 92 31 20 31 (6) (9) 16 (30) (30)
Hepatitis 170 39 31 98 26 15 46 59 52 26 73 73
Rotarix 138 18 14 47 34 23 33 3 - 58 16 16
Synflorix 62 (23) (26) - - - 8 33 33 54 (28) (31)
Priorix, Priorix Tetra, 53 13 9 2 - - 33 18 7 18 (5) -
Varilrix
Cervarix 27 (7) (7) - - - 9 >100 >100 18 (28) (24)
Other 49 11 - 6 (14) (43) - (100) (80) 43 34 22
Vaccines excluding 1,940 16 9 981 10 1 522 28 22 437 19 17
COVID-19 solutions
Pandemic vaccines 101 100 100 - - - 101 100 100 - - -
Pandemic adjuvant 101 100 100 - - - 101 100 100 - - -
Vaccines 2,041 22 15 981 10 1 623 52 45 437 19 17
Specialty Medicines turnover - three months ended 31 March 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
HIV 1,468 24 15 917 32 20 346 16 11 205 11 5
Dolutegravir products 1,277 16 8 760 19 8 319 11 7 198 14 7
Tivicay 357 12 3 185 16 6 66 2 (2) 106 12 -
Triumeq 374 (5) (11) 249 2 (7) 75 (20) (23) 50 (6) (8)
Juluca 150 13 5 111 12 3 35 17 10 4 - -
Dovato 396 54 44 215 57 43 143 46 40 38 73 73
Rukobia 25 56 44 23 53 40 2 100 100 - - -
Cabenuva 127 >100 >100 103 >100 >100 20 >100 >100 4 >100 >100
Apretude 24 >100 >100 24 >100 >100 - - - - - -
Other 15 (35) (35) 7 - (14) 5 - (20) 3 (73) (55)
Immunology/ 601 16 9 393 13 4 108 29 23 100 12 15
Respiratory and Other
Benlysta 253 18 9 204 20 10 23 21 16 26 - -
Nucala 347 18 11 189 7 (2) 89 37 31 69 30 32
Other 1 (90) (80) - - - (4) - - 5 (50) (40)
Oncology 136 7 2 55 (20) (28) 72 33 28 9 >100 >100
Zejula 114 16 10 50 (2) (10) 55 28 21 9 >100 >100
Blenrep 11 (56) (56) - (100) (100) 11 22 22 - - -
Jemperli 11 >100 >100 5 >100 >100 5 >100 >100 1 >100 >100
Other - - - - - - 1 - - (1) - -
Specialty Medicines 2,205 21 13 1,365 23 12 526 20 15 314 13 10
excluding COVID-19
solutions
Pandemic 31 (98) (98) - (100) (100) - (100) (100) 31 (86) (87)
Xevudy 31 (98) (98) - (100) (100) - (100) (100) 31 (86) (87)
Specialty Medicines 2,236 (29) (33) 1,365 (28) (34) 526 (30) (33) 345 (32) (34)
General Medicines turnover - three months ended 31 March 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Respiratory 1,767 15 10 832 15 5 372 12 8 563 17 18
Arnuity Ellipta 8 (38) (38) 6 (45) (45) - - - 2 - -
Anoro Ellipta 120 22 16 51 24 15 46 21 18 23 21 16
Avamys/Veramyst 124 32 31 - - - 18 12 6 106 36 36
Flixotide/Flovent 157 24 16 106 25 14 21 17 11 30 25 25
Incruse Ellipta 35 (30) (34) 13 (50) (54) 16 - (6) 6 (25) (25)
Relvar/Breo Ellipta 274 - (5) 100 (17) (23) 98 18 13 76 6 6
Seretide/Advair 339 12 8 120 43 30 71 (3) (7) 148 2 2
Trelegy Ellipta 465 37 28 327 37 26 67 26 23 71 45 47
Ventolin 205 2 (3) 108 (8) (15) 28 (7) (10) 69 28 28
Other Respiratory 40 14 17 1 - - 7 17 17 32 10 17
Other General Medicines 907 7 7 92 3 (6) 183 8 4 632 7 10
Dermatology 97 5 8 - - - 28 4 - 69 6 11
Augmentin 177 37 38 - - - 56 56 50 121 30 33
Avodart 92 14 9 - - - 29 7 4 63 17 11
Lamictal 129 8 2 66 12 2 28 8 8 35 - (3)
Other 412 (4) - 26 (13) (20) 42 (22) (28) 344 - 6
General Medicines 2,674 12 9 924 14 4 555 10 6 1,195 11 14
Commercial Operations turnover - three months ended 31 March 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Three months ended 6,951 (3) (8) 3,270 (9) (17) 1,704 3 (2) 1,977 2 2
31 March 2023
Commercial Operations turnover excluding COVID-19 solutions
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Three months ended 6,819 16 10 3,270 16 6 1,603 19 14 1,946 13 14
31 March 2023
Segment information
Operating segments are reported based on the financial information provided to
the Chief Executive Officer and the responsibilities of the GSK Leadership
Team (GLT). GSK reports results under two segments: Commercial Operations and
Total R&D. Members of the GLT are responsible for each segment. The
Consumer Healthcare segment is presented as discontinued operations in Q1 2022
for comparative purposes and therefore no segment information is presented.
R&D investment is essential for the sustainability of the business.
However, for segment reporting the Commercial operating profits exclude
allocations of globally funded R&D.
The Total R&D segment is the responsibility of the Chief Scientific
Officer and is reported as a separate segment. The operating costs of this
segment includes R&D activities across Specialty Medicines, including HIV
and Vaccines. It includes R&D and some SG&A costs relating to
regulatory and other functions.
The Group's management reporting process allocates intra-Group profit on a
product sale to the market in which that sale is recorded, and the profit
analyses below have been presented on that basis.
Turnover by segment
Q1 2023 Q1 2022((a)) Growth Growth
£m £m £% CER%
Commercial Operations (total turnover) 6,951 7,190 (3) (8)
Operating profit by segment
Q1 2023 Q1 2022 Growth Growth
£m £m £% CER%
Commercial Operations 3,375 3,117 8 1
Research and Development (1,232) (1,095) 13 6
Segment profit 2,143 2,022 6 (2)
Corporate and other unallocated costs (51) (79)
Adjusted operating profit 2,092 1,943 8 -
Adjusting items (10) 350
Total operating profit 2,082 2,293 (9) (15)
Finance income 29 7
Finance costs (203) (205)
Share of after tax profit/(loss) of associates (2) (1)
and joint ventures
Profit on disposal of associates and joint ventures 1 -
Profit before taxation from continuing operations 1,907 2,094 (9) (15)
(a) The Q1 2022 comparative results have been restated on a consistent basis from
those previously published to reflect the demerger of the Consumer Healthcare
business
(see page 33).
Legal matters
The Group is involved in significant legal and administrative proceedings,
principally product liability, intellectual property, tax, anti-trust,
consumer fraud and governmental investigations, which are more fully described
in the 'Legal Proceedings' note in the Annual Report 2022. At 31 March 2023,
the Group's aggregate provision for legal and other disputes (not including
tax matters described on page 9) was £0.3 billion (31 December 2022: £0.2
billion).
The Group may become involved in significant legal proceedings in respect of
which it is not possible to meaningfully assess whether the outcome will
result in a probable outflow, or to quantify or reliably estimate the
liability, if any, that could result from ultimate resolution of the
proceedings. In these cases, the Group would provide appropriate disclosures
about such cases, but no provision would be made.
The ultimate liability for legal claims may vary from the amounts provided and
is dependent upon the outcome of litigation proceedings, investigations and
possible settlement negotiations. The Group's position could change over time,
and, therefore, there can be no assurance that any losses that result from the
outcome of any legal proceedings will not exceed by a material amount the
amount of the provisions reported in the Group's financial accounts.
Significant legal developments since the date of the Annual Report 2022:
Intellectual Property
Coreg
On 29 March 2023, the US Solicitor General filed a brief with the US Supreme
Court expressing the view that Teva's petition for certiorari should be
granted. GSK filed a reply to the US Solicitor General's brief on 11 April
2023, again arguing that Teva's petition for certiorari be denied.
Tivicay
In September 2021, ViiV Healthcare received a paragraph IV letter from Lupin
Ltd. (Lupin) relating to the Tivicay 5mg dosage for oral suspension,
challenging only the crystal form patent. On 2 November 2021, ViiV Healthcare
filed suit against Lupin in the US District Court for the District of
Delaware. In March 2023, the parties reached a settlement, thereby concluding
the matter.
Juluca
On 12 June 2020, ViiV Healthcare received a paragraph IV letter from Cipla
Ltd. (Cipla) relating to Juluca. On 22 July 2020, ViiV Healthcare filed suit
against Cipla in the US District Court for the District of Delaware. In March
2023, the parties reached a settlement, thereby concluding the matter.
Product Liability
Zantac
On 23 March 2023, the court presiding over the California Zantac litigation
cases issued a Sargon ruling in the first case scheduled for trial (Goetz).
The court found that the plaintiff's experts' causation opinions are
admissible and can be presented to a jury. This ruling does not mean that the
Court agrees with plaintiff's experts' scientific conclusions as plaintiff
must still prove his case at trial. The ruling applies only to the Goetz case
and does not affect any other state cases or the December 2022 MDL Daubert
ruling. The Goetz trial is scheduled to begin on 24 July 2023.
Two cases have been set for trial in 2024 in the Cook County, Illinois
proceedings.
GSK will continue to defend itself vigorously against all claims.
Sales and marketing and regulation
US electronic health records subpoena
On 19 March 2023, the Group received a subpoena from the United States
Attorney's Office for the Western District of Virginia, which is working with
the United States Department of Justice Civil Division, seeking documents
relating to the Group's electronic health record programmes. The Group is
cooperating with this enquiry.
Commercial and corporate
Zejula Royalty Dispute
Trial was held the week of 6 March 2023 and judgment was entered against the
Group on 5 April 2023. The Court upheld AstraZeneca's interpretation that all
current uses of Zejula generate royalty-bearing sales under the wording of the
two license agreements. Accordingly, GSK will owe back royalties to
AstraZeneca in an amount to be determined in a separate phase of the
proceedings. The Group will also be responsible for paying on this same basis
going forward. The Group is considering an appeal.
Returns to shareholders
Quarterly dividends
The Board has declared a first interim dividend for Q1 2023 of 14p per share
(Q1 2022: 17.50p((1)) per share retrospectively adjusted for the Share
Consolidation).
Dividends remain an essential component of total shareholder return and GSK
recognises the importance of dividends to shareholders. On 23 June 2021, at
the GSK Investor Update, GSK set out that from 2022 a progressive dividend
policy will be implemented guided by a 40 to 60 percent pay-out ratio through
the investment cycle. The dividend policy, the total expected cash
distribution, and the respective dividend pay-out ratios for GSK remain
unchanged. GSK expects to declare a dividend of 56.5p per share for 2023.
Payment of dividends
The equivalent interim dividend receivable by ADR holders will be calculated
based on the exchange rate on 11 July 2023. An annual fee of $0.03 per ADS (or
$0.0075 per ADS per quarter) is charged by the Depositary. The ex-dividend
date will be 18 May 2023, with a record date of 19 May 2023 and a payment date
of 13 July 2023.
Paid/ Pence per Pence per £m
Payable share/ share/
pre share post share
consolidation consolidation
2023
First interim 13 July 2023 - 14 567
2022
First interim 1 July 2022 14 17.50 704
Second interim 6 October 2022 13 16.25 654
Third interim 12 January 2023 11 13.75 555
Fourth interim 13 April 2023 11 13.75 557
49 61.25 2,470
(1) Adjusted for the Share Consolidation on 18 July 2022. For details of the Share
Consolidation see page 33.
Weighted average number of shares
Q1 2023 Q1 2022
millions millions((a))
Weighted average number of shares - basic 4,044 4,016
Dilutive effect of share options and share awards 41 50
Weighted average number of shares - diluted 4,085 4,066
(a) See page 33 for details of the Share Consolidation.
At 31 March 2023, 4,052 million shares (Q1 2022: 4,024 million) were in free
issue (excluding Treasury shares and shares held by the ESOP Trusts). No
Treasury shares have been repurchased since 2014. The Company issued 0.7
million shares under employee share schemes in the period for proceeds of £8
million (Q1 2022: £17 million).
At 31 March 2023, the ESOP Trusts held 42.7 million GSK shares against the
future exercise of share options and share awards. The carrying value of £293
million has been deducted from other reserves. The market value of these
shares was £615 million.
At 31 March 2023, the Company held 217 million Treasury shares at a cost of
£3,796 million which has been deducted from retained earnings.
Additional information
Disposal group and discontinued operations accounting policy
Disposal groups are classified as held for distribution if their carrying
amount will be recovered principally through a distribution to shareholders
rather than through continuing use, they are available for distribution in
their present condition and the distribution is considered highly probable.
They are measured at the lower of their carrying amount and fair value less
costs to distribute.
Non-current assets included as part of a disposal group are not depreciated or
amortised while they are classified as held for distribution. The assets and
liabilities of a disposal group classified as held for distribution are
presented separately from the other assets and liabilities in the balance
sheet.
A discontinued operation is a component of the entity that has been disposed
of or distributed or is classified as held for distribution and that
represents a separate major line of business. The results of discontinued
operations are presented separately in the statement of profit or loss and
comparatives are restated on a consistent basis.
The Q1 2022 comparative figures have been restated on a consistent basis in
the first quarter 2023 from those previously published to reflect the demerger
of the Consumer Healthcare business in July 2022.
Accounting policies and basis of preparation
This unaudited Results Announcement contains condensed financial information
for the three months ended 31 March 2023 and should be read in conjunction
with the Annual Report 2022, which was prepared in accordance with United
Kingdom adopted International Financial Reporting Standards. This Results
Announcement has been prepared applying consistent accounting policies to
those applied by the Group in the Annual Report 2022.
The Group has not identified any changes to its key sources of accounting
judgements or estimations of uncertainty compared with those disclosed in the
Annual Report 2022.
This Results Announcement does not constitute statutory accounts of the Group
within the meaning of sections 434(3) and 435(3) of the Companies Act 2006.
The full Group accounts for 2022 were published in the Annual Report 2022,
which has been delivered to the Registrar of Companies and on which the report
of the independent auditor was unqualified and did not contain a statement
under section 498 of the Companies Act 2006.
Exchange rates
GSK operates in many countries and earns revenues and incurs costs in many
currencies. The results of the Group, as reported in Sterling, are affected by
movements in exchange rates between Sterling and other currencies. Average
exchange rates, as modified by specific transaction rates for large
transactions, prevailing during the period, are used to translate the results
and cash flows of overseas subsidiaries, associates and joint ventures into
Sterling. Period-end rates are used to translate the net assets of those
entities. The currencies which most influenced these translations and the
relevant exchange rates were:
Q1 2023 Q1 2022 2022
Average rates:
US$/£ 1.22 1.34 1.24
Euro/£ 1.14 1.19 1.17
Yen/£ 162 156 161
Period-end rates:
US$/£ 1.24 1.31 1.20
Euro/£ 1.14 1.18 1.13
Yen/£ 165 160 159
Net assets
The book value of net assets increased by £1,216 million from £10,096
million at 31 December 2022 to £11,312 million at 31 March 2023. This
primarily reflected contribution from Total comprehensive income for the
period partly offset by dividend paid to shareholders.
At 31 March 2023, the net deficit on the Group's pension plans was £966
million compared with £1,355 million at 31 December 2022. This decrease in
the net deficit is primarily driven by higher asset values in the UK.
The estimated present value of the potential redemption amount of the Pfizer
put option related to ViiV Healthcare, recorded in Other payables in Current
liabilities, was £988 million (31 December 2022: £1,093 million).
Contingent consideration amounted to £6,584 million at 31 March 2023 (31
December 2022: £7,068 million), of which £5,539 million (31 December 2022:
£5,890 million) represented the estimated present value of amounts payable to
Shionogi relating to ViiV Healthcare, £587 million (31 December 2022: £673
million) represented the estimated present value of contingent consideration
payable to Novartis related to the Vaccines acquisition and £455 million (31
December 2022: £501 million) represented the estimated present value of
contingent consideration payable to Affinivax.
Of the contingent consideration payable (on a post-tax basis) to Shionogi at
31 March 2023, £925 million (31 December 2022: £940 million) is expected to
be paid within one year.
Movements in contingent consideration are as follows:
Q1 2023 ViiV Group
Healthcare £m
£m
Contingent consideration at beginning of the period 5,890 7,068
Remeasurement through income statement and other movements (64) (193)
Cash payments: operating cash flows (287) (290)
Cash payments: investing activities - (1)
Contingent consideration at end of the period 5,539 6,584
Q1 2022 ViiV Group
Healthcare £m
£m
Contingent consideration at beginning of the period 5,559 6,076
Remeasurement through income statement and other movements 256 304
Cash payments: operating cash flows (183) (185)
Cash payments: investing activities (25) (26)
Contingent consideration at end of the period 5,607 6,169
Contingent liabilities
There were contingent liabilities at 31 March 2023 in respect of guarantees
and indemnities entered into as part of the ordinary course of the Group's
business. No material losses are expected to arise from such contingent
liabilities. Provision is made for the outcome of legal and tax disputes where
it is both probable that the Group will suffer an outflow of funds and it is
possible to make a reliable estimate of that outflow. Descriptions of the
significant legal disputes to which the Group is a party are set out on page
29 and on pages 265 to 267 of the 2022 Annual Report.
Business acquisitions
On 18 April 2023, GSK announced it had reached agreement to acquire late-stage
biopharmaceutical company Bellus Health for US$14.75 per share of common stock
in cash representing an approximate total equity value of US $2.0 billion
(£1.6 billion). The acquisition provides GSK access to camlipixant, a
potential best-in-class and highly selective P2X3 antagonist currently in
phase III development for the first-line treatment of adult patients with
refractory chronic cough (RCC). Under the terms of the agreement, the
acquisition will be effected through a Plan of Arrangement pursuant to the
Canada Business Corporations Act in which the shares of Bellus outstanding
will be acquired by GSK in consideration of US$14.75 per share in cash.
Subject to customary conditions, including court approval, the approval of the
acquisition by at least 66.67% of the votes cast at a meeting of Bellus'
shareholders and a majority of the votes cast by non-interested shareholders
at such meeting, and approval by the appropriate regulatory agencies, the
transaction is expected to close in the third quarter of 2023 or earlier.
Discontinued operations
Consumer Healthcare was presented as a discontinued operation from Q2 2022.
The demerger of Consumer Healthcare was completed on 18 July 2022. Financial
information relating to the operations of Consumer Healthcare for the period
ended 31 March 2022 is set out below. In Q1 2023, the Q1 2022 comparative
figures are restated on a consistent basis from the previously published
figures. The Group Income Statement and Group Cash Flow Statement distinguish
discontinued operations from continuing operations.
Total Results Q1 2022
£m
Turnover 2,590
Other income/(expense) (2,086)
Profit before tax 504
Taxation (108)
Tax rate% 21.4%
Profit/(loss) after taxation from discontinued operations: Consumer Healthcare 396
Other gains/(losses) from the demerger -
Remeasurement of discontinued operations distributed to shareholders on -
demerger
Profit after taxation from discontinued operations 396
Non-controlling interest in discontinued operations 90
Earnings attributable to shareholders from discontinued operations 306
Earnings per share from discontinued operations 7.6p
Share Consolidation
Following completion of the Consumer Healthcare business demerger on 18 July
2022, GSK plc Ordinary shares were consolidated to maintain share price
comparability before and after demerger. The consolidation was approved by GSK
shareholders at a General Meeting held on 6 July 2022. Shareholders received 4
new Ordinary shares with a nominal value of 31¼ pence each for every 5
existing Ordinary shares which had a nominal value of 25 pence each. Earnings
per share, diluted earnings per share, adjusted earnings per share and
dividends per share were retrospectively adjusted to reflect the Share
Consolidation in all the periods presented.
Related party transactions
Details of GSK's related party transactions are disclosed on page 236 of our
2022 Annual Report.
Reconciliation of cash flow to movements in net debt
Q1 2023 Q1 2022
£m £m
Total Net debt at beginning of the period (17,197) (19,838)
Increase/(decrease) in cash and bank overdrafts (673) 282
Net decrease/(increase) in short-term loans (552) 249
Net decrease/(increase) in long-term loans 144 -
Repayment of lease liabilities 47 51
Exchange adjustments 322 (356)
Other non-cash movements (41) (52)
Decrease/(increase) in net debt from continuing operations (753) 174
Decrease/(increase) in net debt from discontinued operations - 313
Total Net debt at end of the period (17,950) (19,351)
Net debt analysis
31 March 31 December
2023 2022
£m £m
Liquid investments 65 67
Cash and cash equivalents 2,890 3,723
Short-term borrowings (4,261) (3,952)
Long-term borrowings (16,644) (17,035)
Total Net debt at the end of the period (17,950) (17,197)
Free cash flow reconciliation from continuing operations
Q1 2023 Q1 2022
£m £m
Net cash inflow/(outflow) from continuing operating activities 53 2,206
Purchase of property, plant and equipment (233) (193)
Proceeds from sale of property, plant and equipment 7 6
Purchase of intangible assets (296) (377)
Proceeds from disposals of intangible assets 4 5
Net finance costs (91) (74)
Dividends from joint ventures and associates 1 -
Contingent consideration paid (reported in investing activities) (1) (26)
Distributions to non-controlling interests (140) (78)
Contributions from non-controlling interests 7 8
Free cash inflow from continuing operations (689) 1,477
R&D commentary
Pipeline overview
Medicines and vaccines in phase III development (including major lifecycle 17 Infectious Diseases (7)
innovation or under regulatory review)
· RSV older adult vaccine candidate
· SKYCovione (SK) COVID-19
· gepotidacin (bacterial topoisomerase inhibitor) uncomplicated urinary tract
infection and urogenital gonorrhoea
· bepirovirsen (HBV ASO) hepatitis B virus
· Bexsero infants vaccine (US)
· MenABCWY (gen 1) vaccine candidate
· tebipenem pivoxil (antibacterial carbapenem) complicated urinary tract
infection
Immunology/Respiratory (3)
· Nucala chronic obstructive pulmonary disease
· depemokimab (long acting anti-IL5) severe eosinophilic asthma, eosinophilic
granulomatosis with polyangiitis, chronic rhinosinusitis with nasal polyps,
hyper-eosinophilic syndrome
· latozinemab (AL001, anti-sortilin) frontotemporal dementia
Oncology (5)
· momelotinib (JAK1, JAK2 and ACVR1 inhibitor) myelofibrosis with anaemia
· Blenrep (anti-BCMA ADC) multiple myeloma
· Jemperli (anti-PD-1) 1L endometrial cancer
· Zejula (PARP inhibitor) 1L ovarian, and lung cancer
· cobolimab (anti-TIM-3) non-small cell lung cancer
Opportunity driven (2)
· Jesduvroq (HIF-PHI) anaemia of chronic kidney disease
· linerixibat (IBATi) cholestatic pruritus in primary biliary cholangitis
Total vaccines and medicines in all phases of clinical development 68
Total projects in clinical development (inclusive of all phases and 86
indications)
Our key growth assets by therapy area
The following outlines several key vaccines and medicines by therapy area that
will help drive growth for GSK to meet its outlooks and ambition for 2021-2026
and beyond.
Infectious Diseases
bepirovirsen (HBV ASO)
Bepirovirsen is a potential new treatment option for people with chronic
hepatitis B being evaluated a monotherapy or combination therapy with both
existing and novel treatments. Two randomised, double-blind,
placebo-controlled phase III trials (B-Well 1 and B-Well 2) evaluating the
safety and efficacy of bepirovirsen started in Q1 2023 and are actively
recruiting patients.
Key trials for bepirovirsen:
Trial name (population) Phase Design Timeline Status
B-Well 1 bepirovirsen in nucleos(t)ide treated patients (chronic hepatitis B) III A multi-centre, randomised, double-blind, placebo-controlled trial to confirm Trial Start: Recruiting
the efficacy and safety of treatment with bepirovirsen in participants with
chronic hepatitis B virus Q1 2023
NCT05630807
B-Well 2 bepirovirsen in nucleos(t)ide treated patients (chronic hepatitis B) III A multi-centre, randomised, double-blind, placebo-controlled trial to confirm Trial Start: Recruiting
the efficacy and safety of treatment with bepirovirsen in participants with
chronic hepatitis B virus Q1 2023
NCT05630820
B-Clear bepirovirsen monotherapy (chronic hepatitis B) IIb A multi-centre, randomised, partial-blind parallel cohort trial to assess the Trial start: Complete;
efficacy and safety of treatment with bepirovirsen in participants with
chronic hepatitis B virus Q3 2020 full data presented
NCT04449029
B-Together bepirovirsen sequential combination therapy with Peg-interferon IIb A multi-centre, randomised, open label trial to assess the efficacy and safety Trial start: Active, not recruiting
(chronic hepatitis B) of sequential treatment with bepirovirsen followed by Pegylated Interferon
Alpha 2a in participants with chronic hepatitis B virus Q1 2021
NCT04676724
bepirovirsen sequential combination therapy with targeted immunotherapy II A trial on the safety, efficacy and immune response following sequential Trial start: Recruiting
treatment with an anti-sense oligonucleotide against chronic hepatitis B (CHB)
(chronic hepatitis B) and chronic hepatitis B targeted immunotherapy (CHB-TI) in CHB patients Q2 2022
receiving nucleos(t)ide analogue (NA) therapy
NCT05276297
gepotidacin (bacterial topoisomerase inhibitor)
In April 2023, GSK presented positive results from the pivotal EAGLE-2 and
EAGLE-3 phase III trials on 15 April 2023 for gepotidacin as a potential
treatment for uncomplicated urinary tract infections (uUTI) in an oral
presentation at the European Congress of Clinical Microbiology and Infectious
Diseases in Copenhagen, Denmark. In the EAGLE-2 and EAGLE-3 phase III trials,
gepotidacin demonstrated non-inferiority to nitrofurantoin, an existing
first-line treatment for uUTI, in patients with a confirmed uUTI and a
uropathogen susceptible to nitrofurantoin. Additionally, in the EAGLE-3 phase
III trial, gepotidacin demonstrated statistically significant superiority
versus nitrofurantoin. These results are based on a primary efficacy endpoint
of therapeutic success, an endpoint comprised of combined clinical resolution
and microbiological eradication of bacteria at the Test-of-Cure (ToC) visit
10-13 days after initiation of treatment. In the EAGLE-2 phase III trial,
gepotidacin demonstrated therapeutic success in 50.6% of patients compared to
47% for nitrofurantoin. In the EAGLE-3 phase III trial, gepotidacin
demonstrated therapeutic success in 58.5% of patients compared to 43.6% for
nitrofurantoin. The safety and tolerability profile of gepotidacin in the
EAGLE-2 and EAGLE-3 phase III trials was consistent with previous trials.
The presentation follows the decision to stop the EAGLE-2 and EAGLE-3 pivotal
trials early for efficacy following a recommendation made by the Independent
Data Monitoring Committee in November 2022. The full results will be submitted
for publication in a peer-reviewed scientific journal later this year.
Key phase III trials for gepotidacin:
Trial name (population) Phase Design Timeline Status
EAGLE-1 (uncomplicated urogenital gonorrhoea) III A randomised, multi-centre, open-label trial in adolescent and adult Trial start: Recruiting
participants comparing the efficacy and safety of gepotidacin to ceftriaxone
plus azithromycin in the treatment of uncomplicated urogenital gonorrhoea Q4 2019
caused by Neisseria gonorrhoeae
NCT04010539
EAGLE-2 (females with uUTI / acute cystitis) III A randomised, multi-centre, parallel-group, double-blind, double-dummy trial Trial start: Complete; primary endpoint met
in adolescent and adult female participants comparing the efficacy and safety
of gepotidacin to nitrofurantoin in the treatment of uncomplicated urinary Q4 2019
tract infection (acute cystitis)
NCT04020341
EAGLE-3 (females with uUTI / acute cystitis) III A randomised, multi-centre, parallel-group, double-blind, double-dummy trial Trial start: Complete; primary endpoint met
in adolescent and adult female participants comparing the efficacy and safety
of gepotidacin to nitrofurantoin in the treatment of uncomplicated urinary Q2 2020
tract infection (acute cystitis)
NCT04187144
MenABCWY vaccine candidate
GSK's MenABCWY combination vaccine candidate met all primary endpoints of the
pivotal phase III clinical trial and was well tolerated with a safety profile
consistent with Bexsero and Menveo. The primary endpoint data demonstrated
statistical non-inferiority compared to Bexsero and Menveo in individuals
10-25 years old, eliciting a clinically meaningful immune response. If
approved, this five-in-one vaccine candidate could provide the broadest
meningococcal serogroup coverage and could lead to a simplified immunisation
schedule. Detailed results from this phase III trial will be presented in a
peer-reviewed publication and at upcoming scientific meetings. Based on these
results, GSK intends to submit a Biologics License Application to the US Food
and Drug Administration (FDA) to approve of its MenABCWY combination vaccine
candidate.
Key trials for MenABCWY vaccine candidate:
Trial name (population) Phase Design Timeline Status
MenABCWY - 019 IIIb A randomised, controlled, observer-blind trial to evaluate safety and Trial start: Active, not recruiting
immunogenicity of GSK's meningococcal ABCWY vaccine when administered in
healthy adolescents and adults, previously primed with meningococcal ACWY Q1 2021
vaccine
NCT04707391
MenABCWY - V72 72 III A randomised, controlled, observer-blind trial to demonstrate effectiveness, Trial start: Complete; primary endpoints met
immunogenicity, and safety of GSK's meningococcal Group B and combined ABCWY
vaccines when administered to healthy adolescents and young adults Q3 2020
NCT04502693
RSV vaccine candidates
In March 2023, the US FDA Vaccines and Related Biological Products Advisory
Committee (VRBPAC) voted that the available data supported the safety and
effectiveness of GSK's respiratory syncytial virus (RSV) older adult vaccine
candidate for the prevention of lower respiratory tract disease caused by RSV
in adults aged 60 years and older. The Committee voted unanimously 12-0 on
effectiveness and 10-2 on safety. The US FDA has assigned a Prescription Drug
User Fee Act action date of 3 May 2023. Regulatory reviews are ongoing
elsewhere, including in the EU and Japan.
The VRBPAC vote followed the publication of positive phase III trial results
for the vaccine candidate in The New England Journal of Medicine.
Key phase III trials for RSV older adult vaccine candidates:
Trial name (population) Phase Design Timeline Status
RSV OA=ADJ-004 III A randomised, open-label, multi-country trial to evaluate the immunogenicity, Trial start: Active, not recruiting; primary endpoint met
safety, reactogenicity and persistence of a single dose of the RSVPreF3 OA
(Adults ≥ 60 years old) investigational vaccine and different revaccination schedules in adults aged Q1 2021
60 years and above
NCT04732871
RSV OA=ADJ-006 III A randomised, placebo-controlled, observer-blind, multi-country trial to Trial start: Active, not recruiting; primary endpoint met
demonstrate the efficacy of a single dose of GSK's RSVPreF3 OA investigational
(ARESVI-006; Adults ≥ 60 years old) vaccine in adults aged 60 years and above Q2 2021
NCT04886596
RSV OA=ADJ-007 III An open-label, randomised, controlled, multi-country trial to evaluate the Trial start: Complete; primary endpoint met
immune response, safety and reactogenicity of RSVPreF3 OA investigational
(Adults ≥ 60 years old) vaccine when co-administered with FLU-QIV vaccine in adults aged 60 years and Q2 2021
above
NCT04841577
RSV OA=ADJ-008 III A phase III, open-label, randomised, controlled, multi country trial to Trial start: Active, not recruiting
evaluate the immune response, safety and reactogenicity of RSVPreF3 OA
investigational vaccine when co-administered with FLU HD vaccine in adults Q4 2022
aged 65 years and above
(Adults ≥ 65 years old)
NCT05559476
RSV OA=ADJ-009 III A randomised, double-blind, multi-country trial to evaluate consistency, Trial start: Complete; primary endpoint met
safety, and reactogenicity of 3 lots of RSVPreF3 OA investigational vaccine
(Adults ≥ 60 years old) administrated as a single dose in adults aged 60 years and above Q4 2021
NCT05059301
RSV OA=ADJ-017 III A phase III, open-label, randomised, controlled, multi-country trial to Trial start: Active, not recruiting
evaluate the immune response, safety and reactogenicity of an RSVPreF3 OA
(Adults ≥ 65 years old) investigational vaccine when co-administered with FLU aQIV (inactivated Q4 2022
influenza vaccine - adjuvanted) in adults aged 65 years and above
NCT05568797
RSV OA=ADJ-018 III A phase III, observer-blind, randomised, placebo-controlled trial to evaluate Trial start: Active, not recruiting
the non-inferiority of the immune response and safety of the RSVPreF3 OA
(Adults 50-59 years) investigational vaccine in adults 50 59 years of age, including adults at Q4 2022
increased risk of respiratory syncytial virus lower respiratory tract disease,
compared to older adults ≥60 years of age.
NCT05590403
HIV
cabotegravir
In February 2023, ViiV Healthcare announced positive 12-month findings from
the SOLAR phase IIIb trial, presented at the 30th Conference on Retroviruses
and Opportunistic Infections, in Seattle, Washington. SOLAR is the first
head-to-head, phase IIIb trial of the first and only complete long-acting
injectable regimen Cabenuva (cabotegravir, rilpivirine) compared against
complete daily oral regimen bictegravir/emtricitabine/tenofovir alafenamide.
The trial showed that Cabenuva dosed every two months achieved the primary
endpoint of non-inferior virologic efficacy versus daily oral
bictegravir/emtricitabine/tenofovir alafenamide. At the same time, 90% of
participants who switched to Cabenuva from bictegravir/emtricitabine/tenofovir
alafenamide, and who completed a survey (n=425), preferred the long-acting
regimen. Switching to Cabenuva from bictegravir/emtricitabine/tenofovir
alafenamide during the SOLAR trial was efficacious, well-tolerated, and
improved treatment satisfaction from baseline based on adjusted HIV Treatment
Satisfaction Questionnaire status version scores.
Additionally, together with the Medicines Patent Pool (MPP), ViiV announced
that MPP has signed sublicence agreements with Aurobindo Pharma, Cipla Inc.
and Viatris Inc - through its subsidiary Mylan - to manufacture generic
versions of cabotegravir long-acting (LA) for HIV pre-exposure prophylaxis
(PrEP). This is enabled by signing a voluntary licensing agreement for patents
relating to cabotegravir LA for PrEP with MPP in July 2022. Through the
MPP-ViiV Healthcare agreement, the selected generic manufacturers will be able
to develop, manufacture, and supply generic versions of cabotegravir LA for
PrEP, in 90 countries, subject to required regulatory approvals being
obtained.
Key phase III trials for cabotegravir:
Trial name (population) Phase Design Timeline Status
HPTN 083 IIb/III A double-blind safety and efficacy trial of injectable cabotegravir compared Trial start: Active; not recruiting; primary endpoint met (superiority)
to daily oral tenofovir disoproxil fumarate/emtricitabine (TDF/FTC), for
(HIV uninfected cisgender men and transgender women who have sex with men) Pre-Exposure Prophylaxis in HIV-uninfected cisgender men and transgender women Q4 2016
who have sex with men
NCT02720094
HPTN 084 III A double-blind safety and efficacy trial of long-acting injectable Trial start: Active; not recruiting; primary endpoint met (superiority)
cabotegravir compared to daily oral TDF/FTC for Pre-Exposure Prophylaxis in
(HIV uninfected women who are at high risk of acquiring HIV) HIV-Uninfected women Q4 2017
NCT03164564
ATLAS III A randomised, multi-centre, parallel-group, non-inferiority, open-label trial Trial start: Active; not recruiting; primary endpoint met (non-inferiority)
evaluating the efficacy, safety, and tolerability of switching to long-acting
cabotegravir plus long-acting rilpivirine from current INI- NNRTI-, or Q4 2016
PI-based antiretroviral regimen in HIV-1-infected adults who are virologically
NCT02951052 suppressed
ATLAS-2M IIIb A randomised, multi-centre, parallel-group, non-inferiority, open-label trial Trial start: Active; not recruiting; primary endpoint met (non-inferiority)
evaluating the efficacy, safety, and tolerability of long-acting cabotegravir
plus long-acting rilpivirine administered every 8 weeks or every 4 weeks in Q4 2017
HIV-1-infected adults who are virologically suppressed
NCT03299049
FLAIR III A randomised, multi-centre, parallel-group, open-label trial evaluating the Trial start: Active; not recruiting; primary endpoint met (non-inferiority)
efficacy, safety, and tolerability of long-acting intramuscular cabotegravir
and rilpivirine for maintenance of virologic suppression following switch from Q4 2016
an integrase inhibitor single tablet regimen in HIV-1 infected antiretroviral
NCT02938520 therapy naïve adult participants
Immunology/Respiratory
depemokimab (ultra-long-acting anti-IL5)
The phase III programme for our ultra-long-acting IL5 inhibitor, depemokimab
continues to make progress across a range of eosinophil-driven diseases. Phase
III trials of depemokimab were initiated in the second half of 2022 in
indications for chronic rhinosinusitis with nasal polyps (CRSwNP),
eosinophilic granulomatosis with polyangiitis (EGPA) and hypereosinophilic
syndrome (HES). Trials of depemokimab in severe eosinophilic asthma which
started in 2021 continued throughout 2022 with the open label extension of
these trials starting recruitment in Q1 of 2022. Depemokimab is a unique and
distinct monoclonal antibody developed specifically for its affinity for IL-5
and long duration of inhibition.
Key phase III trials for depemokimab:
Trial name (population) Phase Design Timeline Status
SWIFT-1 (severe eosinophilic asthma; SEA) III A 52-week, randomised, double-blind, placebo-controlled, parallel-group, Trial start: Active, not recruiting
multi-centre trial of the efficacy and safety of depemokimab adjunctive
therapy in adult and adolescent participants with severe uncontrolled asthma Q1 2021
with an eosinophilic phenotype
NCT04719832
SWIFT-2 (SEA) III A 52-week, randomised, double-blind, placebo-controlled, parallel-group, Trial start: Recruiting
multi-centre trial of the efficacy and safety of depemokimab adjunctive
therapy in adult and adolescent participants with severe uncontrolled asthma Q1 2021
with an eosinophilic phenotype
NCT04718103
AGILE (SEA) III (extension) A 52-week, open label extension phase of SWIFT-1 and SWIFT-2 to assess the Trial start: Recruiting
long-term safety and efficacy of depemokimab adjunctive therapy in adult and
adolescent participants with severe uncontrolled asthma with an eosinophilic Q1 2022
phenotype
NCT05243680
NIMBLE (SEA) III A 52-week, randomised, double-blind, double-dummy, parallel group, Trial start: Recruiting
multi-centre, non-inferiority trial assessing exacerbation rate, additional
measures of asthma control and safety in adult and adolescent severe asthmatic Q1 2021
participants with an eosinophilic phenotype treated with depemokimab compared
NCT04718389 with mepolizumab or benralizumab
ANCHOR-1 (CRSwNP) III Efficacy and safety of depemokimab in participants with CRSwNP Trial start: Recruiting
Q2 2022
NCT05274750
ANCHOR-2 (CRSwNP) III Efficacy and safety of depemokimab in participants with CRSwNP Trial start: Recruiting
Q2 2022
NCT05281523
OCEAN (EGPA) III Efficacy and safety of depemokimab compared with mepolizumab in adults with Trial start: Recruiting
relapsing or refractory EGPA
Q3 2022
NCT05263934
DESTINY (HES) III A 52-week, randomised, placebo-controlled, double-blind, parallel group, Trial start: Recruiting
multicentre trial of depemokimab in adults with uncontrolled HES receiving
standard of care (SoC) therapy Q4 2022
NCT05334368
Oncology
Blenrep (belantamab mafodotin)
Trials within the DREAMM (DRiving Excellence in Approaches to Multiple
Myeloma) clinical trial programme are ongoing, evaluating belantamab mafodotin
in earlier lines of therapy and in combination. We anticipate data from
DREAMM-7 and DREAMM-8 in the second-line setting in the second half of 2023.
Key phase III trials for Blenrep:
Trial name (population) Phase Design Timeline Status
DREAMM-7 (2L+ MM pts) III A multi-centre, open-label, randomised trial to evaluate the efficacy and Trial start: Active, not recruiting
safety of the combination of belantamab mafodotin, bortezomib, and
dexamethasone (B-Vd) compared with the combination of daratumumab, bortezomib Q2 2020
and dexamethasone (D-Vd) in participants with relapsed/refractory multiple
NCT04246047 myeloma
DREAMM-8 (2L+ MM pts) III A multi-centre, open-label, randomised trial to evaluate the efficacy and Trial start: Enrolment complete
safety of belantamab mafodotin in combination with pomalidomide and
dexamethasone (B-Pd) versus pomalidomide plus bortezomib and dexamethasone Q4 2020
(P-Vd) in participants with relapsed/refractory multiple myeloma
NCT04484623
Jemperli (dostarlimab)
In February 2023, the US FDA Oncologic Drugs Advisory Committee voted in
support of trials designed to evaluate Jemperli as a potential treatment for
mismatch repair-deficient/microsatellite instability-high (dMMR/MSI-H) locally
advanced rectal cancer. Following the committee's positive vote, in March
2023, GSK initiated a global, open-label, phase II clinical trial to
investigate the efficacy and safety of dostarlimab as monotherapy - as a
replacement for chemotherapy, radiation and/or surgery - for treatment-naïve
patients with dMMR/MSI-H locally advanced rectal cancer. The first patient was
dosed in April 2023. GSK intends to use data from this trial, alongside data
from Memorial Sloan Kettering Cancer Center's ongoing trial of 30 patients, to
support a supplemental Biologics License Application (sBLA) for accelerated
regulatory approval in this indication. Earlier in Q1 2023, the US FDA granted
dostarlimab Fast Track designation for the treatment of dMMR/MSI-H locally
advanced rectal cancer.
In February 2023, the US FDA granted full approval for Jemperli for the
treatment of adult patients with dMMR recurrent or advanced endometrial
cancer, as determined by a US FDA-approved test, that has progressed on or
following a prior platinum-containing regimen in any setting and are not
candidates for curative surgery or radiation. This approval was based on
additional data collected from the A1 expansion cohort of the ongoing GARNET
phase I trial, a multicentre, open-label, single-arm trial of Jemperli
monotherapy in patients with advanced or recurrent solid tumours. Long-term
outcomes from GARNET demonstrated an overall response rate of 45.4%.
In March 2023, GSK announced interim results from Part 1 of the
RUBY/ENGOT-EN6/GOG3031/NSGO phase III trial investigating dostarlimab plus
standard-of-care chemotherapy (carboplatin-paclitaxel) followed by dostarlimab
compared to chemotherapy plus placebo followed by placebo in adult patients
with primary advanced or recurrent endometrial cancer. The results
demonstrated the potential of dostarlimab plus chemotherapy to redefine the
treatment of primary advanced or recurrent endometrial cancer versus
chemotherapy alone. A 72% and 36% reduction in the risk of disease progression
or death were observed in the dMMR/MSI-H and overall patient populations,
respectively. A clinically meaningful overall survival trend was also observed
at the interim analysis.
In April 2023, GSK announced that the European Medicines Agency (EMA)
validated the marketing authorisation application (MAA) for Jemperli plus
chemotherapy for the treatment of dMMR/MSI-H primary advanced or recurrent
endometrial cancer.
Key trials for Jemperli:
Trial name (population) Phase Design Timeline Status
RUBY III A randomised, double-blind, multi-centre trial of dostarlimab plus Trial start: Active, not recruiting; primary endpoint met in RUBY Part 1
carboplatin-paclitaxel with and without niraparib maintenance versus placebo
ENGOT-EN6 plus carboplatin-paclitaxel in patients with recurrent or primary advanced Q3 2019
endometrial cancer
GOG-3031 (1L Stage III or IV endometrial cancer)
NCT03981796
PERLA (1L metastatic non-small cell lung cancer) II A randomised, double-blind trial to evaluate the efficacy of dostarlimab plus Trial start: Active, not recruiting; primary endpoint met
chemotherapy versus pembrolizumab plus chemotherapy in metastatic non-squamous
non-small cell lung cancer Q4 2020
NCT04581824
GARNET (advanced solid tumours) I/II A multi-center, open-label, first-in-human trial evaluating dostarlimab in Trial start: Recruiting
participants with advanced solid tumors who have limited available treatment
options Q1 2016
NCT02715284
AZUR-1 (locally advanced rectal cancer) II A single-arm, open-label trial with dostarlimab monotherapy in participants Trial start: Recruiting
with untreated stage II/III dMMR/MSI-H locally advanced rectal cancer
Q1 2023
NCT05723562
momelotinib (JAK1/2 and ACVR1/ALK2 inhibitor)
A European Union MAA for momelotinib, a potential new oral treatment for
myelofibrosis, is currently under review with the EMA. A Committee for
Medicinal Products for Human Use (CHMP) regulatory action is anticipated by
year-end 2023. A New Drug Application (NDA) for momelotinib is also currently
under regulatory review by the US FDA with a Prescription Drug User Fee Act
action date of 16 June 2023.
Key phase III trial for momelotinib:
Trial name (population) Phase Design Timeline Status
MOMENTUM (myelofibrosis) III A randomised, double-blind, active control phase III trial intended to confirm Trial start: Active, not recruiting; primary endpoint met
the differentiated clinical benefits of the investigational drug momelotinib
(MMB) versus danazol (DAN) in symptomatic and anaemic subjects who have Q1 2020
previously received an approved Janus kinase inhibitor (JAKi) therapy for
NCT04173494 myelofibrosis (MF)
Zejula (niraparib)
Zejula is approved in more than 40 countries as a maintenance treatment for
certain types of ovarian, fallopian tube and primary peritoneal cancer. The
ongoing development programme includes several combination trials, including
the FIRST phase III trial assessing niraparib in combination with dostarlimab
as a potential treatment for first-line ovarian cancer maintenance and the
phase III ZEAL trial assessing niraparib in combination with standard of care
for the maintenance treatment of first-line advanced non-small cell lung
cancer.
In April 2023, GSK took the decision to permanently discontinue enrolment in
the ZEST phase III 800-patient trial, initiated in 2021. This decision was due
to eligibility challenges impacting the ability to fully enrol patients with
early-stage breast cancer. During the conduct of the trial, GSK learned that
the prevalence of a radiologically detectable metastatic disease among
patients who are ctDNA positive is much higher than expected. This enabled
patients to be referred for treatment of metastatic cancer ahead of clinical
symptoms. Consequently, because these patients were ineligible for the ZEST
phase III trial, it has made enrolment in the trial much more challenging than
previously thought.
Key phase III trials for Zejula:
Trial name (population) Phase Design Timeline Status
ZEAL-1L (maintenance for 1L advanced NSCLC) III A randomised, double-blind, placebo-controlled, multi-centre trial comparing Trial start: Active, not recruiting
niraparib plus pembrolizumab versus placebo plus pembrolizumab as maintenance
therapy in participants whose disease has remained stable or responded to Q4 2020
first-line platinum-based chemotherapy with pembrolizumab for Stage IIIB/IIIC
NCT04475939 or IV non-small cell lung cancer
FIRST (1L ovarian cancer maintenance) III A randomised, double-blind, comparison of platinum-based therapy with Trial start: Active, not recruiting
dostarlimab (TSR-042) and niraparib versus standard of care platinum-based
therapy as first-line treatment of stage III or IV non-mucinous epithelial Q4 2018
ovarian cancer
NCT03602859
Opportunity driven
Jesduvroq (daprodustat)
In February 2023, the US FDA approved Jesduvroq (daprodustat) for the
treatment of anaemia due to chronic kidney disease (CKD) in adults who have
been receiving dialysis for at least four months. Jesduvroq is the first
innovative medicine for anaemia treatment in over 30 years and the only
hypoxia-inducible factor prolyl hydroxylase inhibitor approved in the US,
providing a new oral, convenient option for patients in the US with anaemia of
CKD on dialysis and for healthcare providers. Jesduvroq is currently under
regulatory review with the EMA, with a regulatory decision anticipated in the
first half of 2023.
When left untreated or undertreated, anaemia of CKD is associated with poor
clinical outcomes and leads to a substantial burden on patients and healthcare
systems. There remains an unmet need for convenient treatment options with
efficacy and safety comparable to current treatments.
Key phase III trials for daprodustat:
Trial name (population) Phase Design Timeline Status
ASCEND-D (Dialysis subjects with anaemia of CKD) III A randomised, open-label (sponsor-blind), active-controlled, parallel-group, Reported Complete; primary endpoint met
multi-centre, event driven trial in dialysis subjects with anaemia associated
with chronic kidney disease to evaluate the safety and efficacy of daprodustat
compared to recombinant human erythropoietin, following a switch from
NCT02879305 erythropoietin-stimulating agents
ASCEND-ID (Incident Dialysis subjects with anaemia of CKD) III A 52-week open-label (sponsor-blind), randomised, active-controlled, Reported Complete; primary endpoint met
parallel-group, multi-centre trial to evaluate the efficacy and safety of
daprodustat compared to recombinant human erythropoietin in subjects with
anaemia of chronic kidney disease who are initiating dialysis
NCT03029208
ASCEND-TD (Dialysis subjects with anaemia of CKD) III A randomised, double-blind, active-controlled, parallel-group, multi-centre Reported Complete; primary endpoint met
trial in haemodialysis participants with anaemia of chronic kidney disease to
evaluate the efficacy, safety, and pharmacokinetics of three-times weekly
dosing of daprodustat compared to recombinant human erythropoietin, following
NCT03400033 a switch from recombinant human erythropoietin or its analogues
ASCEND-ND (Non-dialysis subjects with anaemia of CKD) III A randomised, open-label (sponsor-blind), active-controlled, parallel-group, Reported Complete; primary endpoint met
multi-centre, event driven trial in non-dialysis subjects with anaemia of
chronic kidney disease to evaluate the safety and efficacy of daprodustat
compared to darbepoetin alfa
NCT02876835
ASCEND-NHQ (Non-dialysis subjects with anaemia of CKD) III A 28-week, randomised, double-blind, placebo-controlled, parallel-group, Reported Complete; primary endpoint met
multi-centre, trial in recombinant human erythropoietin (rhEPO) naïve
non-dialysis participants with anaemia of chronic kidney disease to evaluate
the efficacy, safety, and effects on quality of life of daprodustat compared
NCT03409107 to placebo
Reporting definitions
Total, Continuing and Adjusted results
Total reported results represent the Group's overall performance including
discontinued operations. Continuing results represents performance excluding
discontinued operations.
GSK also uses a number of adjusted, non-IFRS, measures to report the
performance of its business. Adjusted results and other non-IFRS measures may
be considered in addition to, but not as a substitute for or superior to,
information presented in accordance with IFRS. Adjusted results are defined on
page 16 and other non-IFRS measures are defined below and are based on
continuing operations.
Free cash flow from continuing operations
Free cash flow is defined as the net cash inflow/outflow from continuing
operating activities less capital expenditure on property, plant and equipment
and intangible assets, contingent consideration payments, net finance costs,
and dividends paid to non-controlling interests, contributions from
non-controlling interests plus proceeds from the sale of property, plant and
equipment and intangible assets, and dividends received from joint ventures
and associates (all attributable to continuing operations). It is used by
management for planning and reporting purposes and in discussions with and
presentations to investment analysts and rating agencies. Free cash flow
growth is calculated on a reported basis. A reconciliation of net cash inflow
from continuing operations to free cash flow from continuing operations is set
out on page 34.
Free cash flow conversion
Free cash flow conversion is free cash flow from continuing operations as a
percentage of profit attributable to shareholders from continuing operations.
Working capital
Working capital represents inventory and trade receivables less trade
payables.
CER and AER growth
In order to illustrate underlying performance, it is the Group's practice to
discuss its results in terms of constant exchange rate (CER) growth. This
represents growth calculated as if the exchange rates used to determine the
results of overseas companies in Sterling had remained unchanged from those
used in the comparative period. CER% represents growth at constant exchange
rates. £% or AER% represents growth at actual exchange rates.
Total Net debt
Net debt is defined as total borrowings less cash, cash equivalents, liquid
investments, and short-term loans to third parties that are subject to an
insignificant risk of change in value.
Share Consolidation
Shareholders received 4 new Ordinary shares with a nominal value of 31¼ pence
each for every 5 existing Ordinary shares which had a nominal value of 25
pence each. Earnings per share, diluted earnings per share, adjusted earnings
per share and dividends per share were retrospectively adjusted to reflect the
Share Consolidation in all the periods presented.
Earnings per share
Earnings per share has been retrospectively adjusted for the Share
Consolidation on 18 July 2022, applying a ratio of 4 new Ordinary shares for
every 5 existing Ordinary shares.
Total Earnings per share
Unless otherwise stated, Total earnings per share refers to Total basic
earnings per share.
Total Operating Margin
Total Operating margin is operating profit divided by turnover.
COVID-19 solutions
COVID-19 solutions include the sales of pandemic adjuvant and other COVID-19
solutions including vaccine manufacturing and Xevudy and the associated costs
but does not include reinvestment in R&D. This categorisation is used by
management and we believe is helpful to investors through providing clarity on
the results of the Group by showing the contribution to growth from COVID-19
solutions.
Turnover excluding COVID-19 solutions
Turnover excluding COVID-19 solutions excludes the impact of sales of pandemic
adjuvant within Vaccines and Xevudy within Specialty Medicines related to the
COVID-19 pandemic. Management believes that the exclusion of the impact of
these COVID-19 solutions sales aids comparability in the reporting periods and
understanding of GSK's growth including by region versus prior periods and
also 2023 Guidance which excludes any contributions from COVID-19 solutions.
General Medicines
General Medicines are usually prescribed in the primary care or community
settings by general healthcare practitioners. For GSK, this includes medicines
in inhaled respiratory, dermatology, antibiotics and other diseases.
Specialty Medicines
Specialty Medicines are typically prescription medicines used to treat complex
or rare chronic conditions. For GSK, this comprises medicines in infectious
diseases, HIV, oncology, immunology/respiratory and Other.
Percentage points
Percentage points of growth which is abbreviated to ppts.
Brand names and partner acknowledgements
Brand names appearing in italics throughout this document are trademarks of
GSK or associated companies or used under licence by the Group.
Guidance, assumptions and cautionary statements
2023 guidance
GSK expects 2023 turnover to increase between 6 to 8 per cent, Adjusted
operating profit to increase between 10 to 12 per cent and Adjusted earnings
per share to increase between 12 to 15 per cent. This guidance is provided at
CER and excludes any contributions from COVID-19 solutions.
Assumptions related to 2023 guidance
In outlining the guidance for 2023, the Group has made certain assumptions
about the healthcare sector, the different markets in which the Group operates
and the delivery of revenues and financial benefits from its current
portfolio, pipeline and restructuring programmes. Taking Q1 2023 performance
and the latest expectations for Q2 2023 into account, GSK now expects first
half and second half turnover growth to be broadly similar and for General
Medicines to be broadly flat to slightly down this year. GSK expects Adjusted
operating profit growth to be lower in the first half of 2023 and higher in
the second half, relative to full-year expectations. Despite the recovery of
healthcare systems, uncertain economic conditions prevail across many markets
in which GSK operates and we continue to expect to see variability in
performance between quarters.
We expect sales of Vaccines to increase mid-teens per cent, Specialty
Medicines to increase mid to high single-digit per cent, and sales of General
Medicines to be broadly flat to slightly down.
These planning assumptions as well as operating profit guidance and dividend
expectations assume no material interruptions to supply of the Group's
products, no material mergers, acquisitions or disposals, no material
litigation or investigation costs for the Company (save for those that are
already recognised or for which provisions have been made) and no change in
the Group's shareholdings in ViiV Healthcare. The assumptions also assume no
material changes in the healthcare environment or unexpected significant
changes in pricing as a result of government or competitor action. The 2023
guidance factors in all divestments and product exits announced to date.
The Group's guidance assumes successful delivery of the Group's integration
and restructuring plans. Material costs for investment in new product launches
and R&D have been factored into the expectations given. Given the
potential development options in the Group's pipeline, the outlook may be
affected by additional data-driven R&D investment decisions. The guidance
is given on a constant currency basis.
Assumptions and cautionary statement regarding forward-looking statements
The Group's management believes that the assumptions outlined above are
reasonable, and that the guidance, outlooks, ambitions and expectations
described in this report are achievable based on those assumptions. However,
given the forward-looking nature of these guidance, outlooks, ambitions and
expectations, they are subject to greater uncertainty, including potential
material impacts if the above assumptions are not realised, and other material
impacts related to foreign exchange fluctuations, macro-economic activity, the
impact of outbreaks, epidemics or pandemics, such as the COVID-19 pandemic and
ongoing challenges and uncertainties posed by the COVID-19 pandemic for
businesses and governments around the world, changes in legislation,
regulation, government actions or intellectual property protection, product
development and approvals, actions by our competitors, and other risks
inherent to the industries in which we operate.
This document contains statements that are, or may be deemed to be,
"forward-looking statements". Forward-looking statements give the Group's
current expectations or forecasts of future events. An investor can identify
these statements by the fact that they do not relate strictly to historical or
current facts. They use words such as 'anticipate', 'estimate', 'expect',
'intend', 'will', 'project', 'plan', 'believe', 'target' and other words and
terms of similar meaning in connection with any discussion of future operating
or financial performance. In particular, these include statements relating to
future actions, prospective products or product approvals, future performance
or results of current and anticipated products, sales efforts, expenses, the
outcome of contingencies such as legal proceedings, dividend payments and
financial results. Other than in accordance with its legal or regulatory
obligations (including under the Market Abuse Regulation, the UK Listing Rules
and the Disclosure and Transparency Rules of the Financial Conduct Authority),
the Group undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise. The reader
should, however, consult any additional disclosures that the Group may make in
any documents which it publishes and/or files with the SEC. All readers,
wherever located, should take note of these disclosures. Accordingly, no
assurance can be given that any particular expectation will be met and
investors are cautioned not to place undue reliance on the forward-looking
statements.
All guidance, outlooks, ambitions and expectations should be read together
with the guidance, assumptions and cautionary statements in this Q1 2023
earnings release and the 2022 Annual Report.
Forward-looking statements are subject to assumptions, inherent risks and
uncertainties, many of which relate to factors that are beyond the Group's
control or precise estimate. The Group cautions investors that a number of
important factors, including those in this document, could cause actual
results to differ materially from those expressed or implied in any
forward-looking statement. Such factors include, but are not limited to, those
discussed under Item 3.D 'Risk Factors' in the Group's Annual Report on Form
20-F for 2022 and any impacts of the COVID-19 pandemic. Any forward looking
statements made by or on behalf of the Group speak only as of the date they
are made and are based upon the knowledge and information available to the
Directors on the date of this report.
Independent review report to GSK plc
Conclusion
We have been engaged by GSK plc ("the Company") to review the condensed
financial information in the Results Announcement of the Company for the three
months ended 31 March 2023.
The condensed financial information comprises:
· the income statement and statement of comprehensive income for three month
period ended 31 March 2023 on page 21 to 22;
· the balance sheet as at 31 March 2023 on page 23;
· the statement of changes in equity for the three month period then ended on
page 24;
· the cash flow statement for the three month period then ended on page 25; and
· the accounting policies and basis of preparation and the explanatory notes to
the condensed financial information on pages 26 to 34 that have been prepared
applying consistent accounting policies to those applied by the Group in the
Annual Report 2022, which was prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the United Kingdom.
We have read the other information contained in the Results Announcement,
including the non-IFRS measures contained on pages 26 to 34 and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial information.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed financial information in the Results Announcement
for the three months ended 31 March 2023 is not prepared, in all material
respects in accordance with the accounting policies set out in the accounting
policies and basis of preparation section on page 31.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Financial
Reporting Council for use in the United Kingdom (ISRE(UK)2410). A review of
interim financial information consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
As disclosed on page 31, the annual financial statements of the Company are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this Results
Announcement have been prepared in accordance with the accounting policies set
out in the accounting policies and basis of preparation section on page 31.
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the Results Announcement of the
Company in accordance with the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
In preparing the Results Announcement, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the Results Announcement, our responsibility is to express to the
Company a conclusion on the condensed financial information in the Results
Announcement based on our review. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis of Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Financial Reporting Council (ISRE (UK) 2410). Our work has been
undertaken so that we might state to the Company those matters we are required
to state to it in an independent review report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this report, or for
the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
26 April 2023
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