REG - GSK PLC - 3rd Quarter Results
01/11/2023 07:15
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RNS Number : 9484R GSK PLC 01 November 2023
Strong year-to-date and Q3 performance drives upgrade to full-year guidance
Broad-based execution drives further sales and earnings growth:
• Total Q3 2023 sales +10% and +16% ex COVID
• Vaccines sales +33%, +34% ex COVID. Shingrix £0.8 billion +15%, Arexvy sales
£0.7 billion
• Specialty Medicines sales -1%, +17% ex COVID with HIV +15%
• General Medicines sales -2% with impact of generic competition to older
products, in part offset by Trelegy +23%
• Total operating profit and Total continuing EPS reflects strong growth in the
quarter and year to date with lower charges for contingent consideration
liabilities remeasurement
• Adjusted operating profit +15% and Adjusted EPS +17% reflects strong
execution, resilient growth and higher royalty income in part offset by
increased investment in R&D, new product launches and a seven percentage
point operating profit reduction from lower COVID-19 solutions sales
(Financial Performance - Q3 2023 results unless otherwise stated, growth % and
commentary at CER, ex COVID is excluding COVID-19 solutions as defined on page
51).
Q3 2023 Year to Date
£m % AER % CER £m % AER % CER
Turnover 8,147 4 10 22,276 1 2
Turnover ex COVID 8,146 10 16 22,102 12 13
Total operating profit 1,949 64 83 6,172 35 39
Total continuing EPS 36.1p 92 >100 113.0p 54 59
Adjusted operating profit 2,772 6 15 7,034 7 10
Adjusted operating margin % 34.0% 0.8ppts 1.7ppts 31.6% 1.7ppts 2.2ppts
Adjusted EPS 50.4p 7 17 126.2p 11 14
Cash generated from operations 2,508 32 4,415 (24)
R&D delivery underpins longer-term growth outlook:
• Arexvy approved in Japan as country's first RSV vaccine for older adults;
positive preliminary phase III data in adults aged 50-59 presented at ACIP and
support regulatory filings
• New Shingrix data demonstrates 100% efficacy in preventing shingles in adults
aged 50+ in China; co-promotion partnership in China with Zhifei announced,
set to begin in 2024
• Apretude long-acting treatment approved for HIV prevention in EU; clinical
development plans advancing for innovative long-acting treatment and
prevention regimens with data anticipated in 2024
• Ojjaara approved by US FDA as first and only line agnostic treatment for
myelofibrosis patients with anaemia
• Jemperli plus chemotherapy approved in US as new frontline treatment for
endometrial cancer
• Agreement to acquire worldwide rights to Janssen's JNJ-3989, which may have
potential to further increase functional cure rates of bepirovirsen in chronic
hepatitis B treatment
2023 guidance upgrade, Q3 2023 dividend of 14p declared, 56.5p expected for
full year
• Turnover to increase 12 to 13% (from 8 to 10%)
• Adjusted operating profit growth 13 to 15% (from 11 to 13%)
• Adjusted EPS growth 17 to 20% (from 14 to 17%)
Guidance all at CER and excluding COVID-19 solutions.
Emma Walmsley, Chief Executive Officer, GSK:
"GSK is delivering strong and sustained performance momentum, with another
quarter of double-digit sales and earnings growth. Competitive performance was
broadly based but benefitted particularly from the outstanding US launch of
Arexvy, the world's first RSV vaccine. Our excellent execution supports an
upgrade to our full-year 2023 guidance and we have clear momentum as we look
ahead to deliver our 2026 outlooks. GSK's longer-term outlook also continues
to strengthen, with progress in our vaccines pipeline, the development of our
ultra long-acting HIV portfolio and significant new prospects in respiratory."
The Total results are presented in summary above and on page 7 and Adjusted
results reconciliations are presented on pages 19, 20, 22 and 23. 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 17 and £% or AER% growth, CER% growth, turnover
excluding COVID-19 solutions and other non-IFRS measures are defined on page
51, COVID-19 solutions are defined on page 51. GSK provides guidance on an
Adjusted results basis only, for the reasons set out on page 17. All
expectations, guidance and targets regarding future performance and dividend
payments should be read together with 'Guidance, assumptions and cautionary
statements' on page 52.
2023 guidance
GSK has upgraded its full-year guidance at constant exchange rates (CER). All
expectations and full-year growth rates exclude any contributions from
COVID-19 solutions.
In the year to date, GSK has exceeded its full-year guidance expectations due
to the continued strong and broad-based performance of its business, including
successful launch of Arexvy in Q3 2023, which has also benefitted from initial
channel inventory build. Currently, GSK assumes sales of Arexvy will track in
line with high-dose flu analogues. For the full year, the company expects
Arexvy sales between £0.9 to £1 billion.
Turnover is expected to increase between 12 to 13 per cent (from 8 to 10 per
cent)
Adjusted operating profit is expected to increase between 13 to 15 per cent
(from 11 to 13 per cent)
Adjusted earnings per share is expected to increase between 17 to 20 per cent
(from 14 to 17 per cent)
This guidance is supported by the following turnover expectations for
full-year 2023 at CER:
Vaccines - expected increase of around 20 per cent in turnover (increased from mid-teens)
Specialty Medicines - expected increase of low double-digit per cent in turnover (from a high
single-digit increase)
General Medicines - expected increase of low to mid-single-digit per cent in turnover (from low
single-digit increase)
The increase in Adjusted Operating profit reflects both higher sales and
royalty income partially offset by the cost of sales which continues to be
expected to increase broadly in line with turnover. SG&A is anticipated to
increase at a rate broadly aligned to turnover, reflecting new launches and
targeted investment for growth. R&D is expected to continue to increase at
a rate slightly below turnover. Adjusted earnings per share is now expected to
increase between 17 to 20 per cent at CER, reflecting higher operating profit
and more favourable net finance costs. Expectations for non-controlling
interests are unchanged, and the company anticipates an effective tax rate
between 15%-15.5%.
Additional commentary
The Dividend policy and the expected pay-out ratio remain unchanged. GSK's
future dividend policy and guidance regarding the expected dividend pay-out in
2023 are provided on page 38.
COVID-19 solutions
In Q3 2023, turnover increased by 10% at CER and reflected the comparison to
Q3 2022. Excluding COVID-19 solutions, turnover increased by 16% at CER. The
adverse impact of lower sales of COVID-19 solutions was seven percentage
points of growth in the quarter on Adjusted operating profit. GSK does not
anticipate further significant COVID-19 pandemic-related sales or operating
profit in 2023. Consequently, the company now expects its full-year 2023
turnover growth to be impacted by approximately 8%, with Adjusted Operating
profit growth being reduced between 4% to 5% 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 page 52. If exchange rates were to hold at the
closing rates on 30 Sep 2023 ($1.23/£1, €1.16/£1 and Yen 183/£1) for the
rest of 2023, the estimated impact on 2023 Sterling turnover growth for GSK
would be -2% 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 -4%.
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 (US EDT at 8am) on 1
November 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 Q3 2023 Year to date
£m Growth Growth £m Growth Growth
AER% CER% AER% CER%
Shingles 825 9 15 2,538 16 15
Meningitis 441 - 3 987 11 11
RSV (Arexvy) 709 - - 709 - -
Influenza 374 (4) (4) 409 (7) (7)
Established Vaccines 868 (2) 3 2,495 7 6
Vaccines ex COVID 3,217 30 34 7,138 22 21
Pandemic vaccines 1 (83) (67) 143 >100 >100
Vaccines 3,218 30 33 7,281 24 24
HIV 1,623 9 15 4,671 15 14
Respiratory/Immunology and 769 12 18 2,162 15 15
Other
Oncology 200 22 26 487 9 9
Specialty Medicines ex COVID 2,592 11 17 7,320 14 14
Xevudy - (100) (100) 31 (99) (99)
Specialty Medicines 2,592 (6) (1) 7,351 (14) (15)
Respiratory 1,520 (10) (3) 5,079 4 5
Other General Medicines 817 (11) - 2,565 (3) 4
General Medicines 2,337 (10) (2) 7,644 2 5
Total 8,147 4 10 22,276 1 2
Total ex COVID 8,146 10 16 22,102 12 13
By Region:
US 4,560 14 19 11,440 5 4
Europe 1,559 5 5 4,907 5 2
International 2,028 (13) (2) 5,929 (6) -
Total 8,147 4 10 22,276 1 2
Turnover ex COVID is excluding COVID-19 solutions and is a non-IFRS measure
defined on page 51 with the reconciliation to the IFRS measure Turnover
included in the table above.
Q3 2023 Year to date
£m AER CER £m AER CER
Vaccines Total 3,218 30% 33% 7,281 24% 24%
Excluding COVID 3,217 30% 34% 7,138 22% 21%
Double-digit growth for Vaccines in Q3 23 and YTD was driven by the successful
launch of Arexvy in the US and continued strong uptake of Shingrix in
International and Europe. Pandemic vaccines sales mostly include GSK's share
of 2023 contracted European volumes related to a COVID-19 booster vaccine
co-developed with Sanofi.
Shingles 825 9% 15% 2,538 16% 15%
Shingrix, a vaccine against herpes zoster (shingles), grew 15% in Q3 23 on
increased demand and favourable pricing. Growth was driven by strong private
uptake and public funding expansion in International and Europe. These regions
represented half of the Q3 23 turnover compared to less than 40% in Q3 22,
with Shingrix now available in 38 countries outside of the US, most of which
have cumulative immunisation rates in the low single digits. Europe sales
included deliveries for the UK National Immunisation Programme which began
offering Shingrix vaccination in September. In the US, retail demand grew 4%
in the quarter and 7% YTD while overall US turnover declined 6% CER in Q3 23
and 7% CER YTD versus a challenging comparator period in which there was
higher non-retail purchasing. YTD results were also impacted by a H1 22
wholesaler and distributor inventory build. The US cumulative immunisation
penetration grew 5% from Q3 22 to the end of Q2 23 reaching 33% of the more
than 120 million US adults(1) who are currently recommended to receive
Shingrix.
(1) United States Census Bureau, International Database, Year 2023.
Q3 2023 Year to date
£m AER CER £m AER CER
Meningitis 441 - 3% 987 11% 11%
YTD double-digit Meningitis vaccine sales growth was largely delivered by
Bexsero, our vaccine against meningitis B, driven by inclusion in National
Immunisation Programmes in Europe. In the US, Menveo, a vaccine against
meningitis ACWY, grew and Bexsero maintained YTD market share. In the quarter,
Meningitis vaccines sales growth was largely due to the favourable impact of a
Menveo US CDC (Center for Disease Control) stockpile borrow in Q3 22, partly
offset by lower sales in International. Bexsero Q3 23 sales were flat while
Bexsero grew in Europe in the quarter, the US declined as a result of CDC
purchasing patterns and lower demand leaving performance flat.
RSV (Arexvy) 709 - - 709 - -
Arexvy, the world's first approved respiratory syncytial virus (RSV) vaccine
for older adults, delivered significant sales in its first quarter since
launch driven by strong demand and initial channel inventory build. Almost all
sales were in the US where Arexvy is available in all major retail pharmacies
with competitive contracting in place. More than 90% of Q3 23 doses shipped
from wholesalers was to retailers, and Arexvy achieved two-thirds of the share
of retail vaccinations in the quarter. YTD, 1.4 million of the more than 83
million US adults(1) at risk have been protected by Arexvy.
Influenza 374 (4%) (4%) 409 (7%) (7%)
Fluarix/FluLaval sales declined in Q3 23 driven by competitive pressure
primarily in the US.
Established Vaccines 868 (2%) 3% 2,495 7% 6%
Established Vaccines Q3 23 performance was driven by resupply of MMR/V
vaccines in Europe and positive phasing for Synflorix in International, partly
offset by increased competition in the US and constrained supply in Europe for
Infanrix/Pediarix. YTD sales also include favourable CDC stockpile movements
for Rotarix in the US and continued travel market recovery benefiting
Hepatitis vaccine sales in Europe and International.
Specialty Medicines Total 2,592 (6%) (1%) 7,351 (14%) (15%)
Excluding COVID 2,592 11% 17% 7,320 14% 14%
Specialty Medicines growth (excluding COVID-19 solutions) in Q3 23 reflected
increased performance in the quarter, with continued growth momentum on the
HIV portfolio and growth acceleration in both Oncology and
Respiratory/Immunology and Other. In Q3 23 there were minimal sales of Xevudy
contrasting with strong International sales in Q3 22, resulting in a drag of
18 percentage points (CER) in Q3 23, and a 29 percentage points (CER) drag
YTD.
HIV 1,623 9% 15% 4,671 15% 14%
The growth of HIV in Q3 23 and YTD was primarily driven by a 2 percentage
point increase in market share within a broadly flat global treatment market,
attributable to patient demand for the Oral 2DR (Dovato, Juluca) and
Long-Acting medicines (Cabenuva, Apretude). YTD patient demand contributed
approximately 10 percentage points of sales growth, with the remainder from
favourable pricing, customer ordering patterns and tender phasing. Growth in
Q3 23 was mainly driven by continued patient demand for Oral 2DR and
Long-Acting medicines and tender phasing. Dovato continues to be the highest
selling product in the HIV portfolio with sales of £477 million in the
quarter.
Oral 2DR and Long-Acting 867 38% 43% 2,369 47% 46%
Oral 2DR (Dovato, Juluca) and Long-Acting medicine (Cabenuva, Apretude) sales
growth continues and now represents 53% of the total HIV portfolio compared to
42% for Q3 22, driven by market share growth of 4 percentage points versus Q3
22. Long-Acting medicine sales in the quarter were £219 million, growing
£117 million versus Q3 22, with approximately three quarters of sales coming
from patient switches from competitor products. Cabenuva sales in Q3 23 were
£182 million, reflecting strong patient demand, high levels of market access
and reimbursement across US and EU, underpinned by strong data from the SOLAR
phase IIIb study presented at CROI 2023.
Respiratory/Immunology and Other 769 12% 18% 2,162 15% 15%
This therapy area includes sales of Nucala and Benlysta, and also sales of
Duvroq (Daprodustat) in Japan. Growth in Q3 23 exceeds H1 23 reflecting
accelerating growth in both Benlysta and Nucala.
Nucala 413 13% 19% 1,184 15% 16%
Nucala, is an 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). Strong growth in all regions in the quarter
reflected patient demand in severe eosinophilic asthma and for the new
indications with ongoing launches, with growth in the quarter accelerated from
H1 23 due to stronger US performance resulting from increasing new patient
starts.
(1) United States Census Bureau, International Database, Year 2023.
Q3 2023 Year to date
£m AER CER £m AER CER
Benlysta 349 13% 20% 960 17% 17%
Benlysta, a monoclonal antibody treatment for Lupus, continues to show
consistent growth representing strong demand in US and Europe with bio
penetration and volume uptake in certain International markets, particularly
in Japan and China. Q3 23 growth acceleration to 20% uplifts the YTD growth to
17%.
Oncology 200 22% 26% 487 9% 9%
Oncology demonstrated strong growth in Q3 23 driven by Jemperli and Zejula
performance offset by the impact of Blenrep withdrawal from the US market in
November 2022. In the quarter, Jemperli was approved in the US for frontline
treatment in combination with chemotherapy for patients with dMMR/MSI-H
primary advanced or recurrent endometrial cancer. Consequently, Jemperli
achieved sales of £45 million in Q3 23 (£81 million YTD) driven by
increasing new patient starts in the US. Strong Q3 23 performance drives
Oncology growth YTD to 9%. GSK launched Ojjaara late in the quarter, with
approval received for use in myelofibrosis patients with anaemia regardless of
prior myelofibrosis therapy.
Zejula 140 17% 22% 371 10% 10%
Zejula, a PARP inhibitor treatment for ovarian cancer, saw positive growth
globally in Q3 23, with the US demonstrating strong growth resulting from the
launch of the recently approved tablet formulation including associated
channel inventory impacts. Zejula strategy involves a switch from capsule to
tablet formulation leading to improved patient experience and compliance. In
the US, growth in first line indication was partially offset by reduction in
use in second line following the update to US prescribing information agreed
with the FDA in Q4 2022. Q3 23 sales also continue to show positive momentum
in Europe and International, which when combined with US performance drives Q3
23 global growth to 22% and YTD global growth to 10%.
General Medicines 2,337 (10%) (2%) 7,644 2% 5%
Performance in the quarter was adversely impacted by the US market through RAR
adjustments, largely impacting the Established Respiratory portfolio.
Unfavourable RAR adjustments contributed 6 percentage points of decline in Q3
23 and 3 percentage points YTD. Growth YTD was driven by both Respiratory and
Other General Medicines, with ongoing strong demand for Trelegy in all
regions, and a continued post pandemic recovery of the antibiotic market in
Europe and International regions.
Respiratory 1,520 (10%) (3%) 5,079 4% 5%
Performance in Q3 23 and YTD reflects growth of Trelegy and the single inhaled
triple therapy class across all regions and of Anoro in Europe and
International. Performance in Q3 23 was adversely impacted by the US market
through RAR adjustments, largely impacting the Established Respiratory
portfolio. Unfavourable RAR adjustments contributed 7 percentage points of
decline in Q3 23 and 3 percentage points YTD.
Trelegy 537 15% 23% 1,613 27% 27%
Trelegy, is the most prescribed single inhaler triple therapy (SITT) treatment
worldwide for COPD and asthma. Strong growth in Q3 23 and YTD delivered across
all regions, reflecting increased patient demand, growth of the SITT market
and penetration of the class. Growth momentum continues supported by the
outputs of recently updated primary care guidelines from the Global Initiative
for Chronic Obstructive Lung Disease.
Seretide/Advair 202 (24%) (14%) 863 4% 6%
Seretide/Advair is an ICS/LABA treatment for asthma and COPD. Growth YTD
reflected targeted promotion and growth in certain International markets and
the benefit of favourable US RAR adjustments cumulatively in the period.
Growth is partially offset by the ongoing impact of generic competition in
Europe, US and certain International markets. Quarterly performance was
significantly impacted by unfavourable RAR adjustments, accounting for 9
percentage points of decline.
Other General Medicines 817 (11%) - 2,565 (3%) 4%
Flat growth in Q3 23 reflects ongoing post pandemic demand for anti-infectives
in Europe and International, and certain third party manufacturing
arrangements. Ongoing generic competition continues to impact this product
group in Q3 23 and YTD, and specifically in Q3 23 adverse impacts in the US
from RAR adjustments which contributed 4 percentage points of decline in the
quarter and 1 percentage point YTD.
By Region
Q3 2023 Year to date
£m AER CER £m AER CER
US Total 4,560 14% 19% 11,440 5% 4%
Excluding COVID 4,560 14% 19% 11,441 13% 12%
YTD 2023 there was an 8 (CER) percentage point drag due to a decrease in sales
of Xevudy, however the decline had no impact in Q3 23, as Xevudy sales in 2022
were predominantly in the first quarter.
Vaccines grew strongly in Q3 23 driven by the launch and initial stocking for
Arexvy, partly offset by lower non-retail demand for Shingrix, competitive
pressure on Infanrix/Pediarix and CDC purchasing patterns and lower private
demand for Bexsero. YTD performance also includes unfavourable wholesaler and
retailer inventory movements for Shingrix and favourable CDC stockpile
movements in Established Vaccines.
Specialty Medicines grew in Q3 23 and YTD driven by strong HIV performance,
Benlysta and Nucala continued growth, and despite strong Oncology growth in Q3
23, partially offset by Oncology YTD on the withdrawal of Blenrep in November
2022.
General Medicines declined in Q3 23 as Trelegy growth from increased patient
demand and growth of the SITT market was more than offset by declines in
Established Respiratory resulting from adjustments to channel inventories and
RAR.
Europe Total 1,559 5% 5% 4,907 5% 2%
Excluding COVID 1,559 5% 5% 4,783 12% 10%
In Q3 23 there is no impact from the impacts of COVID-19 solutions, however
YTD there is an 8 (CER) percentage point drag due to high sales of Xevudy in
the first half of 2022. Excluding the impacts of COVID-19 solutions, Europe
continued to grow in Q3 23 and deliver strong growth of 10% YTD.
Vaccines strong growth reflected Shingrix launches and uptake, Bexsero
national immunisation campaigns in France and Spain and ongoing travel vaccine
recovery.
Specialty Medicines double digit growth came from HIV, Oncology, Benlysta and
Nucala including the impact of new indication launches.
General Medicines low single digit percentage decline in the quarter was
driven by Established Respiratory performance, with growth maintained at a low
single digit percentage YTD.
International Total 2,028 (13%) (2%) 5,929 (6%) -
Excluding COVID 2,027 4% 17% 5,878 9% 16%
In Q3 23 there was a 19 (CER) percentage point drag due to high sales of
Xevudy in 2022, while YTD the impact was 16 (CER) percentage points. Excluding
this effect, all product groups grew in Q3 23 and YTD.
Vaccines double digit growth was driven by Shingrix strong uptake across
several markets.
Specialty Medicines grew in HIV, Oncology and Respiratory/Immunology and Other
with Nucala delivering strong growth.
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 Q3 2023 Year to Date
£m % AER % CER £m % AER % CER
Turnover 8,147 4 10 22,276 1 2
Cost of sales (2,272) (6) (4) (6,147) (16) (16)
Selling, general and administration (2,296) 12 18 (6,707) 13 13
Research and development (1,575) 17 21 (4,176) 13 12
Royalty income 312 22 23 718 30 30
Other operating income/(expense) (367) 208
Operating profit 1,949 64 83 6,172 35 39
Net Finance expense (158) (11) (8) (484) (13) (14)
Share of after tax profit/(loss) of associates - (4)
and joint ventures
Profit/(loss) on disposal of interest in - 1
associates
Profit before taxation 1,791 77 99 5,685 42 46
Taxation (257) (775)
Tax rate % 14.3% 13.6%
Profit after taxation 1,534 97 >100 4,910 49 53
Profit attributable to non-controlling 70 332
interests
Profit attributable to shareholders 1,464 4,578
1,534 97 >100 4,910 49 53
Earnings per share 36.1p 92 >100 113.0p 54 59
Financial Performance - Q3 2023 results unless otherwise stated, growth % and
commentary at CER.
Adjusted results
Reconciliations between Total results and Adjusted results for Q3 2023, Q3
2022, YTD 2023 and YTD 2022 are set out on pages 19, 20, 22 and 23.
Q3 2023 Year to Date
£m % AER % CER £m % AER % CER
Turnover 8,147 4 10 22,276 1 2
Cost of sales (2,073) (6) (4) (5,553) (17) (17)
Selling, general and administration (2,185) 11 17 (6,441) 13 13
Research and development (1,429) 10 14 (3,966) 12 11
Royalty income 312 22 23 718 30 30
Adjusted operating profit 2,772 6 15 7,034 7 10
Adjusted profit before taxation 2,616 8 17 6,552 9 12
Taxation (404) - 9 (1,022) 6 8
Adjusted profit after taxation 2,212 9 19 5,530 10 13
Adjusted profit attributable to non-controlling 169 420
interests
Adjusted profit attributable to shareholders 2,043 5,110
2,212 9 19 5,530 10 13
Earnings per share 50.4p 7 17 126.2p 11 14
Q3 2023 Year to Date
£m AER CER £m AER CER
Cost of sales Total 2,272 (6%) (4%) 6,147 (16%) (16%)
% of sales 27.9% (3.1%) (3.9%) 27.6% (5.7%) (5.8%)
Adjusted 2,073 (6%) (4%) 5,553 (17%) (17%)
% of sales 25.4% (2.8%) (3.6%) 24.9% (5.6%) (5.7%)
Total and Adjusted cost of sales as a percentage of sales in Q3 2023 and year
to date decreased primarily reflecting lower sales of lower margin Xevudy
compared to 2022. Excluding Xevudy, the quarter and year to date benefitted
from an increasing margin contribution from Vaccines sales, particularly the
launch of Arexvy in the quarter in the US and Shingrix outside the US. In
addition, Specialty Medicines, particularly HIV, contributed to the improved
margin, as well as continued operational efficiencies. This was partly offset
by adverse inventory provision adjustments in the quarter as well as higher
input costs. The year to date also reflected an unfavourable comparator to a
one-time benefit from inventory adjustments in Q1 2022.
Q3 2023 Year to Date
£m AER CER £m AER CER
Selling, general & administration Total 2,296 12% 18% 6,707 13% 13%
% of sales 28.2% 1.9% 1.9% 30.1% 3.1% 2.8%
Adjusted 2,185 11% 17% 6,441 13% 13%
% of sales 26.8% 1.7% 1.7% 28.9% 3.0% 2.7%
Growth in Total and Adjusted SG&A in Q3 2023 and in the year to date
primarily reflected increased investment for growth in Vaccines, including
disease awareness and initial launch preparations across 15 markets for
Arexvy, and investment behind global market expansion and disease awareness
for Shingrix. In Specialty Medicines, increased investment was targeted
behind long-acting injectables in HIV and the recent launch of Ojjaara for
myelofibrosis in Oncology. This was partly offset by the continuing benefit of
restructuring and tight control of ongoing costs. In the quarter there was a
3% adverse impact to growth reflecting foreign exchange gains in Q3 2022 for
COVID-19 solutions. The year to date also reflected the Zejula royalty dispute
in Q1 2023. Total SG&A also included an increase in significant legal
costs (see details on page 21).
Q3 2023 Year to Date
£m AER CER £m AER CER
Research & development Total 1,575 17% 21% 4,176 13% 12%
% of sales 19.3% 2.1% 1.7% 18.7% 1.9% 1.7%
Adjusted 1,429 10% 14% 3,966 12% 11%
% of sales 17.5% 1.0% 0.6% 17.8% 1.7% 1.4%
R&D growth in the quarter was driven by late-stage investment in Vaccines,
Respiratory/Immunology and Infectious Diseases. Investment increased in
Vaccines driven by pneumococcal and mRNA programmes, partly offset by lower
investment on Meningitis ABCWY and RSV following successful trial completion.
Respiratory/Immunology increased investment on paediatric Benlysta, Nucala
COPD, CCL17 for osteo arthritic pain and the collaboration with Alector Inc.
for Alzheimer's disease was offset by a decrease related to completion of the
late-stage clinical programme last year for otilimab. Infectious Diseases
investment increase was driven by bepirovirsen to support development in
chronic hepatitis B.
In Oncology, increased investment in Jemperli and momelotinib (Ojjaara) in the
quarter was offset by reductions in Zejula and Cell and Gene Therapy.
Early stage research increases included investment in IL18 for atopic
dermatitis and in the HIV portfolio, focused on next generation long-acting
treatments and preventative medicines. This was offset by lower spend on
projects transitioning into development including mRNA and therapeutic HSV
vaccines.
The year to date growth factors were similar to the quarter, but also included
reduced investment in Blenrep compared to the same period in 2022.
Total R&D included higher impairment charges compared with the same
quarter and year to date in 2022.
Q3 2023 Year to Date
£m AER CER £m AER CER
Royalty income Total 312 22% 23% 718 30% 30%
Adjusted 312 22% 23% 718 30% 30%
Growth in Total and Adjusted royalty income in Q3 2023 primarily related to
Gardasil royalties, which increased to £189 million in the quarter and £392
million in the year to date, as well as Kesimpta and Biktarvy royalties. The
majority of the income from Gardasil royalties will cease at the end of 2023.
Q3 2023 Year to Date
£m AER CER £m AER CER
Other operating income/(expense) Total (367) 66% 66% 208 >100% >100%
The Q3 2023 expense reflected a charge of £576 million (Q3 2022: £698
million) arising from the remeasurement of contingent consideration
liabilities and the liabilities for the Pfizer, Inc. (Pfizer) put option
partly offset by a fair value gain of £184 million (Q3 2022: £377 million
loss) on the retained stake in Haleon plc (Haleon) and net income of £25
million (Q3 2022: £9 million) primarily received from equity investments and
milestone income.
Year to date income reflects a fair value gain of £154 million (YTD 2022:
£377 million loss) on the retained stake in Haleon as well as £170 million
(YTD 2022: £158 million) of other net income primarily related to equity
investments and milestone income (including £30 million dividend received
form the retained investment in Haleon), partly offset by a charge of £116
million (YTD 2022: £1,729 million) arising from the remeasurement of
contingent consideration liabilities and the liabilities for the Pfizer put
option. In Q1 2022 upfront income of £0.9 billion was received from the
settlement with Gilead Sciences, Inc. (Gilead).
Q3 2023 Year to Date
£m AER CER £m AER CER
Operating profit Total 1,949 64% 83% 6,172 35% 39%
% of sales 23.9% 8.7% 10.1% 27.7% 6.9% 7.5%
Adjusted 2,772 6% 15% 7,034 7% 10%
% of sales 34.0% 0.8% 1.7% 31.6% 1.7% 2.2%
Total operating profit margin was higher in the quarter and year to date due
to profitable, resilient growth across the portfolio as well as favourable
movements in contingent consideration liabilities and fair value gains (2022
fair value losses) on the retained stake in Haleon. In the year to date there
is an unfavourable comparison due to the £0.9 billion upfront income received
from the settlement with Gilead in Q1 2022.
Adjusted operating profit in Q3 2023 benefitted from leverage from profitable,
resilient growth and strong execution across Specialty Medicines and Vaccines,
particularly with the launch of Arexvy, as well as higher royalty income,
offset by a decline in operating profit for General Medicines in the quarter
and increased investment behind product launches and in R&D. The adverse
impact of lower sales of COVID-19 solutions was seven percentage points of
operating profit growth in the quarter. There was minimal impact on Adjusted
operating profit margin.
Year to date Adjusted operating profit benefitted from strong sales,
favourable product mix and increased royalty income partly offset by increased
investment behind product launches and in R&D as well as increased legal
charges primarily relating to the Zejula royalty dispute. The adverse impact
of lower sales of COVID-19 solutions was 4 percentage points of operating
profit growth in the quarter. The Adjusted operating profit margin improved by
1.8 percentage points.
Q3 2023 Year to Date
£m AER CER £m AER CER
Adjusted operating profit by segment Commercial Operations 4,188 6% 13% 11,044 6% 7%
% of sales 51.4% 1.0% 1.4% 49.6% 2.3% 2.3%
R&D (1,371) 5% 9% (3,876) 9% 8%
Commercial Operations Adjusted operating profit in the quarter and year to
date benefitted from strong sales and favourable product mix (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 in the year to date.
The R&D segment operating expenses growth was driven by late-stage
investment in Vaccines, Respiratory/Immunology and Infectious Diseases,
including pneumococcal and mRNA programmes, and bepirovirsen to support
development in chronic hepatitis B. This was partly offset by decreases
related to the completion of late-stage clinical development programmes and
reduced investment in RSV and Blenrep versus the same period in 2022.
Q3 2023 Year to Date
£m AER CER £m AER CER
Net finance costs Total 158 (11%) (8%) 484 (13%) (14%)
Adjusted 156 (12%) (9%) 478 (14%) (15%)
The decrease in net finance costs in Q3 2023 and year to date is mainly driven
by the net savings from maturing bonds including the Sterling Notes repurchase
in Q4 2022 and higher interest income on cash, partly offset by higher
interest on commercial paper.
Q3 2023 Year to Date
£m AER CER £m AER CER
Taxation Total 257 10% 27% 775 10% 14%
Tax rate % 14.3% 13.6%
Adjusted 404 - 9% 1,022 6% 8%
Tax rate % 15.4% 15.6%
The effective tax rate on Adjusted Profits is broadly in line with
expectations for the year of 15% to 15.5%. Further details on taxation are
described in Note 14, "Taxation" in the Annual Report 2022.
Q3 2023 Year to Date
£m AER CER £m AER CER
Non-controlling interests ("NCIs") Total 70 >100% >100% 332 (1%) (3%)
Adjusted 169 25% 30% 420 (6%) (8%)
The increase in Total profit from continuing operations allocated to NCIs in
Q3 2023 was primarily driven by higher ViiV Healthcare profits with an
allocation of £57 million (Q3 2022: £24 million).
The year to date was impacted by lower net profits in some of the Group's
other entities with NCIs offset by higher ViiV Healthcare profits with an
allocation of £324 million (2022: £292 million).
In Q3 2023 the growth in Adjusted profit from continuing operations allocated
to NCIs reflected higher profits in ViiV Healthcare with an allocation of
£156 million (Q3 2022: £139 million) and higher net profits in some of the
Group's other entities with NCIs. The decrease in the year to date primarily
reflected lower net profits in some of the Group's other entities with NCIs,
partly offset by higher profit allocations from ViiV Healthcare of £412
million (2022: £403 million).
Q3 2023 Year to Date
£p AER CER £p AER CER
Earnings per share Total continuing 36.1p 92% >100% 113.0p 54% 59%
Adjusted 50.4p 7% 17% 126.2p 11% 14%
Adjusted EPS in the quarter and year to date reflected the growth in Adjusted
Operating profit as well as lower finance costs. Year to date growth also
reflected the growth in Adjusted Operating profit, lower finance costs and a
favourable benefit from lower non-controlling interests.
In Q3 2023 and the year to date, lower sales from lower margin COVID-19
solutions reduced Adjusted EPS by eight and five percentage points
respectively.
In Q3 2023 and the year to date, the increase in Total continuing EPS
primarily reflected lower charges related to the remeasurement of contingent
consideration liabilities and a fair value gain on the retained stake in
Haleon compared to a fair value loss in the same period last year. In the year
to date there is an unfavourable comparison due to upfront income received
from the settlement with Gilead in Q1 2022.
Currency impact on results
The results for the year to date 2023 are based on average exchange rates,
principally £1/$1.24, £1/€1.15 and £1/Yen 173. The results for Q3 2023
are based on average exchange rates, principally £1/$1.26, £1/€1.16 and
£1/Yen 182. The period-end exchange rates were £1/$1.23, £1/€1.16 and
£1/Yen 183. Comparative exchange rates are given on page 40.
Q3 2023 Year to Date
£m/£p AER CER £m/£p AER CER
Turnover 8,147 4% 10% 22,276 1% 2%
Earnings per share Total 36.1p 92% >100% 113.0p 54% 59%
Adjusted 50.4p 7% 17% 126.2p 11% 14%
In Q3 2023, the adverse currency impact primarily reflected the strengthening
of Sterling against the US Dollar as well as the weakening of emerging market
currencies against Sterling. Exchange gains or losses on the settlement of
intercompany transactions had a minimal impact on Adjusted EPS.
In the year to date the adverse currency impact primarily reflected weakening
of emerging market currencies against Sterling partly offset by weakening of
Sterling against the US Dollar and the Euro. Exchange gains or losses on the
settlement of intercompany transactions had a one percentage point adverse
impact on Adjusted EPS.
Cash generation
Cash flow
Q3 2023 Q3 2022 9 months 2023 9 months 2022
£m £m £m £m
Cash generated from operations attributable to continuing operations (£m) 2,508 1,907 4,415 5,843
Cash generated from operations attributable to discontinued operations (£m) - 10 - 928
Total cash generated from operations (£m) 2,508 1,917 4,415 6,771
Total net cash generated from operating activities (£m) 2,212 1,321 3,572 5,498
Free cash inflow/(outflow) from continuing operations* (£m) 1,655 712 1,314 2,453
Free cash flow from continuing operations growth (%) >100% (13%) (41%) >100%
Free cash flow conversion from continuing operations* (%) >100% 94% 29% 83%
Total net debt** (£m) 17,589 18,436 17,589 18,436
* Free cash flow from continuing operations and free cash flow conversion are
defined on page 51. Free cash flow from continuing operations is analysed on
page 42.
** Net debt is analysed on page 42.
Q3 2023
Cash generated from operating activities from continuing operations for the
quarter was £2,508 million (Q3 2022: £1,907 million). The increase
primarily reflected increased operating profit, timing of returns and rebates,
favourable comparison to timing of profit share payments for Xevudy and timing
of additional pension contributions both in 2022, offset in part by an
increase in trade receivables due to higher sales in the quarter, including
the launch of Arexvy.
Total contingent consideration payments in the quarter were £281 million (Q3
2022: £249 million), including cash payments made to Shionogi & Co. Ltd
(Shionogi) of £269 million (Q3 2022: £240 million). £278 million (Q3 2022:
£247 million) of these were recognised in cash flows from operating
activities.
Free cash inflow was £1,655 million for the quarter (Q3 2022: £712 million
inflow). In addition to the increase in cash generated from operating
activities from continuing operations, the increase in free cash inflow was
driven by a favourable comparison due to increased tax payments in Q3 2022 and
lower dividends paid to non-controlling interests in the quarter partly offset
by lower proceeds from sale of intangible assets.
9 months 2023
Cash generated from operating activities from continuing operations was
£4,415 millions (9 months 2022: £5,843 million). The decrease primarily
reflected an unfavourable comparison due to the upfront income from the
settlement with Gilead received in Q1 2022, increase in trade receivables due
to higher sales including the launch of Arexvy and lower Xevudy collections
and lower payable balances reflecting increased investment in 2022.
Total contingent consideration cash payments in the year to date 2023 were
£860 million (YTD 2022: £864 million), including cash payments made to
Shionogi of £834 million (YTD 2022: £843 million). £853 million (YTD 2022:
£789 million) of these were recognised in cash flows from operating
activities.
Free cash inflow was £1,314 million for the YTD 2023 (YTD 2022: £2,453
million inflow). The reduction was primarily due to lower cash generated from
operating activities including an unfavourable comparison due to the upfront
income from the settlement with Gilead in Q1 2022. This was partly offset by a
favourable comparison due to increased tax payments in Q3 2022.
Total Net debt
At 30 September 2023, net debt was £17,589 million, compared with £17,197
million at 31 December 2022, comprising gross debt of £20,836 million and
cash and liquid investments of £3,247 million. See net debt information on
page 42.
Net debt increased by £0.4 billion primarily due to dividends paid to
shareholders of £1.7 billion and the net acquisition cost of BELLUS Health
Inc. (Bellus) for £1.5 billion, partly offset by £1.3 billion free cash
inflow, £0.9 billion disposal of investments, £0.2 billion of income
received from equity investments and net favourable exchange impacts of £0.4
billion from the translation of non-Sterling denominated debt and exchange on
other financing items.
At 30 September 2023, GSK had short-term borrowings (including overdrafts and
lease liabilities) repayable within 12 months of £4,843 million with loans of
£2,323 million repayable in the subsequent year.
On 6 October 2023, GSK completed the sale of 270 million shares in Haleon
raising gross proceeds of approximately £885.6 million. See post balance
sheet event note on page 41.
Q3 2023 pipeline highlights (since 26 July 2023)
Medicine/vaccine Trial (indication, presentation) Event
Regulatory approvals or other regulatory action Arexvy RSV, older adults aged Regulatory approval (JP)
60+ years
Apretude HIV, pre-exposure prophylaxis, long-acting injectable and tablets Regulatory approval (EU)
Vocabria HIV, combination with rilpivirine long-acting injection Regulatory approval (CN)
Jemperli RUBY (1L mismatch repair deficient/microsatellite instability-high Regulatory approval (US)
(dMMR/MSI-H) endometrial cancer)
Jemperli RUBY (1L dMMR/MSI-H endometrial cancer) Positive CHMP opinion (EU)
Ojjaara (momelotinib) MOMENTUM (myelofibrosis with anaemia) Regulatory approval (US)
Regulatory submissions or acceptances Nucala chronic rhinosinusitis with nasal polyps Regulatory acceptance (JP)
momelotinib MOMENTUM (myelofibrosis with anaemia) Regulatory acceptance (JP)
Phase III data readouts or other significant events Arexvy RSV, older adults aged Positive phase III data readout
50-59 years
Shingrix Shingles, older adults aged Positive phase III data (CN)
50+ years
Jemperli RUBY part 1 (OS overall population, 1L endometrial cancer) Positive phase III data readout
Anticipated news flow
Timing Medicine/vaccine Trial (indication, presentation) Event
H2 2023 Arexvy RSV, older adults aged Regulatory submission
50-59 years (US, EU, JP)
Nucala Chronic rhinosinusitis with nasal polyps Regulatory submission (CN)
H1 2024 gepotidacin EAGLE-1 (urogenital gonorrhoea) Phase III data readout
MenABCWY (gen 2) Meningitis ABCWY Phase II data readout
vaccine candidate
MenABCWY (gen 1) Meningitis ABCWY Regulatory submission
vaccine candidate (US, EU)
depemokimab SWIFT-1/2 (severe asthma) Phase III data readout
Blenrep DREAMM-7 (2L+ multiple myeloma) Phase III data readout
Jemperli RUBY (1L dMMR/MSI-H endometrial cancer) Regulatory decision (EU)
Jemperli RUBY part 1 (OS overall population, 1L endometrial cancer) Regulatory submission (US)
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, JP)
Zejula FIRST (1L maintenance ovarian cancer) Phase III data readout
H2 2024 Arexvy RSV, older adults aged Regulatory decision
50-59 years (US, EU, JP)
gepotidacin EAGLE-2/3 (uncomplicated urinary tract infection) Regulatory submission (US)
depemokimab ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps) Phase III data readout
depemokimab ANCHOR-1/2 (chronic rhinosinusitis with nasal polyps) Regulatory submission (US)
depemokimab SWIFT-1/2 (severe asthma) Regulatory submission (US)
Nucala Severe asthma Regulatory decision (CN)
Nucala Chronic rhinosinusitis with nasal polyps Regulatory decision (JP)
Nucala MATINEE (chronic obstructive pulmonary disease) Phase III data readout
Nucala MATINEE (chronic obstructive pulmonary disease) Regulatory submission (US)
Blenrep DREAMM-8 (2L + multiple myeloma) Phase III data readout
cobolimab COSTAR (non-small cell lung cancer) Phase III data readout
Zejula ZEAL (1L maintenance non-small cell lung cancer) Phase III data readout
linerixibat GLISTEN (cholestatic pruritus in primary biliary cholangitis) Phase III data readout
Refer to pages 43 to 50 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 Q2 2023 results. For more details on annual updates, please see
GSK'S ESG Performance Report 2022 here: https://gsk.to/2022ESGPerf
(https://gsk.to/2022ESGPerf) .
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 since Q2 2023:
• Malaria kills almost 620,000 people every year, most of them children under 5
in Africa south of the Sahara. New "remarkable" results from a landmark study
by the London School of Hygiene & Tropical Medicine show that combining
the RTS,S malaria vaccine with antimalarial drugs in areas of Africa with
seasonal malaria continued to dramatically reduce malaria cases and deaths in
young children over a period of 5 years: a two thirds reduction in clinical
malaria episodes, including cases of severe malaria and deaths from malaria in
young children, compared to either intervention alone. The data confirm the
potential of seasonal vaccination to provide a high level of protection over
the first 5 years of a child's life, when this protection is much needed. More
information can be found here:
https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(23)00368-7/fulltext.
• Overstretched health systems and lockdown measures during the COVID-19
pandemic have triggered the biggest global decline in routine immunisation for
30 years, causing diseases like polio, measles and cholera to appear in places
where they have not been seen for decades. In September, GSK and Save the
Children announced a 5-year extension to their partnership, focused on
protecting the health of 'zero dose' children who have never received a
vaccine in Nigeria and Ethiopia. More information can be found here:
https://gsk.to/48ZfJqM.
• Performance metrics related to access are updated annually with details from
the most recent year on page 9 of GSK's ESG Performance Report 2022.
Global health and health security
Commitment: develop novel products and technologies to treat and prevent
priority diseases, including pandemic threats.
Progress since Q2 2023:
• GSK's history in malaria spans more than 200 years and continues to be a focus
today. In August, a new paper published in Science showed the potential for a
naturally occurring bacterium discovered by GSK scientists - Delftia
tsuruhatensis Tres Cantos 1 (TC1) - to be the basis for new anti-malarial
interventions. This discovery led to a collaboration with Johns Hopkins
Malaria Research Institute on studies which show bacteria drastically reduces
malaria parasite burden in the mosquito, potentially reducing transmission to
humans significantly.
• Performance metrics related to global health and health security are updated
annually with details from the most recent year on page 13 of GSK's ESG
Performance Report 2022.
Environment
Commitment: committed to a net zero, nature-positive, healthier planet with
ambitious goals set for 2030 and 2045.
Progress since Q2 2023:
• GSK is focused on reducing its impact on nature across the full value chain,
investing in the protection and restoration of nature, and helping to drive
collective action. In September, GSK published its plan for nature in line
with the goal of the Global Biodiversity Framework to halt and reverse
biodiversity loss by 2030. The plan includes action across freshwater, land,
oceans and atmosphere, the major components of the natural world and home to
the biodiversity of the planet's living species. More information can be found
here: https://gsk.to/46WCQk8
• In September, The Task Force on Nature-related Financial Disclosures (TNFD)
published their final framework - an outcome of the pilot framework GSK and
others were already testing. In alignment with this, GSK announced a
commitment to adopting TNFD-aligned disclosures in 2026, based on 2025 data.
• Performance metrics related to environment are updated annually with details
from the most recent year on page 16 of GSK's ESG Performance Report 2022.
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 since Q2 2023:
• At GSK, having a highly talented team with a wide range of skills and
backgrounds is crucial to the ability to discover and develop ground-breaking
medicines and vaccines and understand the unique needs of patients. In
October, GSK announced a new £6 million and 10-year commitment to equitable
STEM education initiative to boost STEM career progression for young people
from under-represented groups in the UK. More information can be found here:
https://gsk.to/3SoeRpE.
• At the 2023 Women Deliver conference, GSK and ViiV Healthcare joined forces
with The Global Fund to launch a new multi-year fund aimed at supporting
community-based and -led organisations who are working to deliver lasting
changes in health policies and programmes to promote gender equality in
Africa.
• Performance metrics related to diversity, equity and inclusion are updated
annually with details from the most recent year on page 23 of GSK's ESG
Performance Report 2022.
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 GSK'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.
Current Previous
External benchmark score/ranking score/ranking Comments
S&P Global's Corporate Sustainability Assessment 86 88 2nd in the pharmaceutical industry group; Assessment conducted annually,
current score based on 2022 submission. 2023 submission score expected to be
published in Q4 2023
Access to Medicines Index 4.06 4.23 Led the bi-annual index since its inception in 2008; Updated bi-annually,
current results from November 2022
Antimicrobial resistance benchmark 84% 86% Led the bi-annual benchmark since its inception in 2018; Current ranking
updated November 2021
CDP Climate Change A- A- Updated annually, current scores updated December 2022 (for supplier
engagement, March 2023)
CDP Water Security B B
CDP Forests (palm oil) A- B
CDP Forests (timber) B B
CDP supplier engagement rating Leader Leader
Sustainalytics 16.7 18.6 1st percentile in pharma subindustry group; Lower score represents lower risk.
Current ranking updated September 2023
MSCI AA AA Last rating action date: September 2023
Moody's ESG solutions 62 61 2nd in the pharmaceutical sector; Current score updated August 2023
ISS Corporate Rating B+ B+ Current score updated June 2023
FTSE4Good Member Member Member since 2004, latest review in June 2023
ShareAction's Workforce Disclosure Initiative 77% 75% Current score updated February 2023
Contents Page
Q3 2023 pipeline highlights 12
ESG 14
Total and Adjusted results 17
Income statement 25
Statement of comprehensive income 26
Balance sheet 27
Statement of changes in equity 28
Cash flow statement 29
Sales tables 31
Segment information 35
Legal matters 37
Returns to shareholders 38
Additional information 39
Post balance sheet event note 41
Related party transactions 41
Net debt information 42
R&D commentary 43
Reporting definitions 51
Guidance, assumptions and cautionary statements 52
Independent review report to GSK plc 53
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:
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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 51.
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 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 19, 20, 22 and
23.
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 nine
months ended 30 September 2023 were £834 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 Q3 2023 and
Q3 2022 are set out below.
Three months ended 30 September 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 8,147 8,147
Cost of sales (2,272) 162 29 8 (2,073)
Gross profit 5,875 162 29 8 6,074
Selling, general and administration (2,296) 83 1 27 (2,185)
Research and development (1,575) 20 129 (2) (1) (1,429)
Royalty income 312 312
Other operating income/(expense) (367) 576 (209) -
Operating profit 1,949 182 129 110 577 (175) 2,772
Net finance cost (158) 2 (156)
Profit before taxation 1,791 182 129 110 577 (173) 2,616
Taxation (257) (40) (30) (19) (61) 3 (404)
Tax rate % 14.3% 15.4%
Profit after taxation from continuing 1,534 142 99 91 516 (170) 2,212
operations
Profit attributable to non-controlling 70 99 169
interests from continuing operations
Profit attributable to shareholders 1,464 142 99 91 417 (170) 2,043
from continuing operations
1,534 142 99 91 516 (170) 2,212
Earnings per share from continuing 36.1p 3.5p 2.4p 2.2p 10.3p (4.1)p 50.4p
operations
Weighted average number of shares 4,055 4,055
(millions)
Three months ended 30 September 2022
Total Profit from Intangible Intangible Major Trans- Divest- Adjusted
results(2) discon- amort- impair- restruct- action- ments, results
£m tinued isation ment uring related significant £m
operations(2) £m £m £m £m legal and
£m other
items
£m
Turnover 7,829 7,829
Cost of sales (2,423) 172 24 13 (2,214)
Gross profit 5,406 172 24 13 5,615
Selling, general and (2,056) 42 46 (1,968)
administration
Research and development (1,346) 26 17 6 (1,297)
Royalty income 255 255
Other operating (1,068) 1 699 368 -
income/(expense)
Operating profit 1,191 198 17 73 712 414 2,605
Net finance cost (178) 1 (177)
Share of after tax losses of (1) (1)
associates and joint
ventures
Profit before taxation 1,012 198 17 73 712 415 2,427
Taxation (233) (39) (3) (15) (106) (6) (402)
Tax rate % 23.0% 16.6%
Profit after taxation from 779 159 14 58 606 409 2,025
continuing operations
Profit after taxation from 2,429 (2,429) -
discontinued operations
and other gains/(losses)
from the demerger(2)
Remeasurement of 7,651 (7,651) -
discontinued operations
distributed to
shareholders on
demerger(2)
Profit after taxation from 10,080 (10,080) -
discontinued operations(2)
Total profit after taxation 10,859 (10,080) 159 14 58 606 409 2,025
for the period(2)
Profit attributable to non- 20 115 135
controlling interest from
continuing operations
Profit attributable to 759 159 14 58 491 409 1,890
shareholders
from continuing operations
Profit attributable to non- 18 (18) -
controlling interest from
discontinued operations
Profit attributable to 10,062 (10,062) -
shareholders from
discontinued operations(2)
10,859 (10,080) 159 14 58 606 409 2,025
Total profit attributable to 38 (18) 115 135
non-controlling interests
Total profit attributable to 10,821 (10,062) 159 14 58 491 409 1,890
shareholders(2)
10,859 (10,080) 159 14 58 606 409 2,025
Earnings per share from 18.8p 3.9p 0.4p 1.4p 12.2p 10.2p 46.9p
continuing operations
Earnings per share from 249.7p (249.7)p -
discontinued operations(2)
Total earnings per share(2) 268.5p (249.7)p 3.9p 0.4p 1.4p 12.2p 10.2p 46.9p
Weighted average number 4,030 4,030
of shares (millions)
(2) The Q3 2022 results have been restated to reflect the increase in the gain on
the demerger of Consumer Healthcare from £9.6 billion to £10.1 billion See
further details on page 39.
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred in Q3
2023 were £110 million (Q3 2022: £73 million), analysed as follows:
Q3 2023 Q3 2022
Cash Non- Total Cash Non- Total
£m cash £m £m cash £m
£m £m
Separation Preparation restructuring 45 50 95 38 22 60
programme
Significant acquisitions 18 (1) 17 10 - 10
Legacy programmes (1) (1) (2) 2 1 3
62 48 110 50 23 73
The Separation Preparation programme incurred cash charges of £45 million
primarily from the restructuring of some administrative functions as well as
Global Supply Chain and R&D. The non-cash charges of £50 million
primarily reflected the write down of assets in administrative locations.
Costs of significant acquisitions relate to integration costs of Sierra
Oncology Inc. (Sierra) and Affinivax Inc. (Affinivax) which were acquired in
Q3 2022 and Bellus acquired in Q2 2023.
Transaction-related adjustments
Transaction-related adjustments from continuing operations resulted in a net
charge of £577 million (Q3 2022: £712 million) the majority of which related
to charges/credits for the remeasurement of contingent consideration
liabilities, the liabilities for the Pfizer put option, and Pfizer and
Shionogi preferential dividends in ViiV Healthcare.
Charge/(credit) Q3 2023 Q3 2022
£m £m
Contingent consideration on former Shionogi-ViiV Healthcare joint Venture 479 582
(including Shionogi preferential dividends)
ViiV Healthcare put options and Pfizer preferential dividends 40 51
Contingent consideration on former Novartis Vaccines business (12) 60
Contingent consideration on acquisition of Affinivax 69 -
Other adjustments 1 19
Total transaction-related charges 577 712
The £479 million charge relating to the contingent consideration for the
former Shionogi-ViiV Healthcare joint venture represented an increase in the
valuation of the contingent consideration due to Shionogi, driven by £383
million from updated exchange rates and sales forecasts, and the unwind of the
discount for £96 million. The £40 million charge relating to the ViiV
Healthcare put option and Pfizer preferential dividends represented an
increase in the valuation of the put option primarily as a result of updated
exchange rates and higher 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 18.
The £12 million credit relating to the contingent consideration on the former
Novartis Vaccines business primarily relates to changes to future sales
forecasts.
The £69 million charge relating to the contingent consideration on the
acquisition of Affinivax primarily relates to an increase in increased
estimated probability of success for the 30-plus valent pneumococcal vaccine
candidate as well as unwind of the discount.
Divestments, significant legal charges, and other items
Divestments, significant legal charges, and other items primarily included
dividend and distribution income received from investments including a £184
million fair value gain on the investment in Haleon. Legal charges provide for
all significant legal matters, including Zantac, and are not broken out
separately by litigation or investigation. Legal charges in the quarter
primarily reflected increased legal charges for Zantac of which the vast
majority relate to the prospective legal costs for the defence of the
litigation.
The reconciliations between Total results and Adjusted results for YTD 2023
and YTD 2022 are set out below.
Nine months ended 30 September 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 22,276 22,276
Cost of sales (6,147) 477 97 20 (5,553)
Gross profit 16,129 477 97 20 16,723
Selling, general and administration (6,707) 163 1 102 (6,441)
Research and development (4,176) 58 149 4 (1) (3,966)
Royalty income 718 718
Other operating income/(expense) 208 116 (324) -
Operating profit 6,172 535 149 264 117 (203) 7,034
Net finance cost (484) 1 5 (478)
Share of after tax profit/(loss) of (4) (4)
associates and joint venture
Profit/(loss) on disposal of interest in 1 (1) -
associates
Profit before taxation 5,685 535 149 265 117 (199) 6,552
Taxation (775) (116) (35) (52) (29) (15) (1,022)
Tax rate % 13.6% 15.6%
Profit after taxation from continuing 4,910 419 114 213 88 (214) 5,530
operations
Profit attributable to non-controlling 332 88 420
interests from continuing
operations
Profit attributable to shareholders 4,578 419 114 213 - (214) 5,110
from continuing operations
4,910 419 114 213 88 (214) 5,530
Earnings per share from continuing 113.0p 10.3p 2.8p 5.3p - (5.2)p 126.2p
operations
Weighted average number of shares 4,050 4,050
(millions)
Nine months ended 30 September 2022
Total Profit from Intangible Intangible Major Trans- Divest- Adjusted
results(2) discon- amort- impair- restruct- action- ments, results
£m tinued isation ment uring related significant £m
operations(2) £m £m £m £m legal and
£m other
items
£m
Turnover 21,948 21,948
Cost of sales (7,316) 501 60 35 9 (6,711)
Gross profit 14,632 501 60 35 9 15,237
Selling, general and (5,934) 177 64 (5,693)
administration
Research and development (3,691) 75 56 20 (3,540)
Royalty income 552 552
Other operating (994) 1 1,709 (716) -
income/(expense)
Operating profit 4,565 576 56 258 1,744 (643) 6,556
Net finance cost (559) 1 2 (556)
Share of after tax profit/(loss) (4) (4)
of associates and joint
ventures
Profit before taxation 4,002 576 56 259 1,744 (641) 5,996
Taxation (706) (119) (10) (51) (237) 157 (966)
Tax rate % 17.6% 16.1%
Profit after taxation from 3,296 457 46 208 1,507 (484) 5,030
continuing operations
Profit after taxation from 3,054 (3,054) -
discontinued operations
and other gains/(losses)
from the demerger(2)
Remeasurement of 7,651 (7,651) -
discontinued
operations distributed to
shareholders on
demerger(2)
Profit after taxation from 10,705 (10,705) -
discontinued operations(2)
Total profit after taxation 14,001 (10,705) 457 46 208 1,507 (484) 5,030
for the period(2)
Profit attributable to non- 335 111 446
controlling interest from
continuing operations
Profit attributable to 2,961 457 46 208 1,396 (484) 4,584
shareholders
from continuing operations
Profit attributable to non- 205 (205) -
controlling interest from
discontinued operations
Profit attributable to 10,500 (10,500) -
shareholders from
discontinued operations(2)
14,001 (10,705) 457 46 208 1,507 (484) 5,030
Total profit attributable to 540 (205) 111 446
non-controlling interests
Total profit attributable to 13,461 (10,500) 457 46 208 1,396 (484) 4,584
shareholders(2)
14,001 (10,705) 457 46 208 1,507 (484) 5,030
Earnings per share from 73.6p 11.4p 1.1p 5.2p 34.6p (12.0p) 113.9p
continuing operations
Earnings per share from 260.9p (260.9)p -
discontinued operations(2)
Total earnings per share(2) 334.5p (260.9)p 11.4p 1.1p 5.2p 34.6p (12.0)p 113.9p
Weighted average number of 4,024 4,024
shares (millions)
(2) The Q3 2022 results have been restated to reflect the increase in the gain on
the demerger of Consumer Healthcare from £9.6 billion to £10.1 billion See
further details on page 39.
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred in nine
months ended 30 September 2023 were £264 million (nine months ended 30
September 2022: £258 million), analysed as follows:
9 months 2023 9 months 2022
Cash Non- Total Cash Non- Total
£m cash £m £m cash £m
£m £m
Separation Preparation restructuring 107 101 208 77 164 241
programme
Significant acquisitions 54 1 55 10 - 10
Legacy programmes 1 - 1 3 4 7
162 102 264 90 168 258
The Separation Preparation programme incurred cash charges of £107 million
primarily from the restructuring of some administrative functions as well as
Global Supply Chain and R&D. The non-cash charges of £101 million
primarily reflected the write-down of assets in administrative as well as
manufacturing locations.
The benefit in the nine months ended 30 September 2023 from restructuring
programmes was £0.2 billion, primarily relating to the Separation Preparation
restructuring programme. The programme has delivered £1.0 billion of annual
savings to date and targets to deliver £1.1 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 and
Affinivax which were acquired in Q3 2022 and Bellus acquired in Q2 2023.
Transaction-related adjustments
Transaction-related adjustments from continuing operations resulted in a net
charge of £117 million (2022: £1,744 million) the majority of which related
to charges/(credits) for the remeasurement of contingent consideration
liabilities, the liabilities for the Pfizer put option, and Pfizer and
Shionogi preferential dividends in ViiV Healthcare.
Charge/(credit) 9 months 2023 9 months 2022
£m £m
Contingent consideration on former Shionogi-ViiV Healthcare joint Venture 406 1,423
(including Shionogi preferential dividends)
ViiV Healthcare put options and Pfizer preferential dividends (203) 201
Contingent consideration on former Novartis Vaccines business (134) 100
Contingent consideration on acquisition of Affinivax 47 -
Other adjustments 1 20
Total transaction-related charges 117 1,744
The £406 million charge relating to the contingent consideration for the
former Shionogi-ViiV Healthcare joint venture represented an increase in the
valuation of the contingent consideration due to Shionogi, driven by £105
million from updated exchange rates and sales forecasts, and the unwind of the
discount for £301 million. The £203 million credit relating to the ViiV
Healthcare put option and Pfizer preferential dividends represented a
reduction in the valuation of the put option as a result of updated exchange
rates, 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 18.
The £134 million credit relating to the contingent consideration on the
former Novartis Vaccines business primarily relates to changes to future sales
forecasts. The £47 million charge relating to the contingent consideration on
the acquisition of Affinivax primarily relates to an increase in increased
estimated probability of success for the 30-plus valent pneumococcal vaccine
candidate as well as unwind of the discount.
Divestments, significant legal charges, and other items
Divestments, significant legal charges, and other items primarily included
dividend and distribution income received from investments including a £154
million fair value gain on the investment in Haleon and £30 million dividend.
Significant legal charges in the year to date primarily reflected increased
legal charges for Zantac of which the vast majority relate to the prospective
legal costs for the defence of the litigation.
Financial information
Income statements
Q3 2023 Q3 2022(2) 9 months 2023 9 months 2022(2)
£m £m £m £m
TURNOVER 8,147 7,829 22,276 21,948
Cost of sales (2,272) (2,423) (6,147) (7,316)
Gross profit 5,875 5,406 16,129 14,632
Selling, general and administration (2,296) (2,056) (6,707) (5,934)
Research and development (1,575) (1,346) (4,176) (3,691)
Royalty income 312 255 718 552
Other operating income/(expense) (367) (1,068) 208 (994)
OPERATING PROFIT 1,949 1,191 6,172 4,565
Finance income 24 22 86 50
Finance expense (182) (200) (570) (609)
Share of after tax profit/(loss) of associates and joint - (1) (4) (4)
ventures
Profit/(loss) on disposal of interests in associates - - 1 -
PROFIT BEFORE TAXATION 1,791 1,012 5,685 4,002
Taxation (257) (233) (775) (706)
Tax rate % 14.3% 23.0% 13.6% 17.6%
PROFIT AFTER TAXATION FROM CONTINUING OPERATIONS 1,534 779 4,910 3,296
Profit after taxation from discontinued operations - 2,429 - 3,054
and other gains from the demerger(2)
Remeasurement of discontinued operations distributed - 7,651 - 7,651
to shareholders on demerger(2)
PROFIT AFTER TAXATION FROM DISCONTINUED OPERATIONS(2) - 10,080 - 10,705
PROFIT AFTER TAXATION FOR THE PERIOD(2) 1,534 10,859 4,910 14,001
Profit attributable to non-controlling interests from 70 20 332 335
continuing operations
Profit attributable to shareholders from continuing 1,464 759 4,578 2,961
operations
Profit attributable to non-controlling interests from - 18 - 205
discontinued operations
Profit attributable to shareholders from discontinued - 10,062 - 10,500
operations(2)
1,534 10,859 4,910 14,001
Profit attributable to non-controlling interests 70 38 332 540
Profit attributable to shareholders(2) 1,464 10,821 4,578 13,461
1,534 10,859 4,910 14,001
EARNINGS PER SHARE FROM CONTINUING OPERATIONS 36.1p 18.8p 113.0p 73.6p
EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS(2) - 249.7p - 260.9p
TOTAL EARNINGS PER SHARE(2) 36.1p 268.5p 113.0p 334.5p
Diluted earnings per share from continuing operations 35.6p 18.6p 111.4p 72.5p
Diluted earnings per share from discontinued - 246.1p - 257.2p
operations(2)
Total diluted earnings per share(2) 35.6p 264.7p 111.4p 329.7p
(2) The Q3 2022 results have been restated to reflect the increase in the gain on
the demerger of Consumer Healthcare from £9.6 billion to £10.1 billion See
further details on page 39.
Statement of comprehensive income
Q3 2023 Q3 2022(2) 9 months 2023 9 months 2022(2)
£m £m £m £m
Total profit for the period(2) 1,534 10,859 4,910 14,001
Items that may be reclassified subsequently to continuing operations income
statement:
Exchange movements on overseas net assets and (94) 93 (87) (105)
net investment hedges
Reclassification of exchange movements on liquidation (7) 1 (20) 10
or disposal of overseas subsidiaries and associates
Fair value movements on cash flow hedges - 11 1 13
Deferred tax on fair value movements on cash flow - 17 (1) 17
hedges
Reclassification of cash flow hedges to income 1 (1) 4 12
statement
(100) 121 (103) (53)
Items that will not be reclassified to continuing operations income statement:
Exchange movements on overseas net assets of 5 (5) (17) (5)
non-controlling interests
Fair value movements on equity investments (242) (24) (359) (648)
Tax on fair value movements on equity investments 18 4 35 61
Fair value movements on cash flow hedges - - (34) -
Remeasurement gains/(losses) on defined benefit plans (266) (1,195) (216) (682)
Tax on remeasurement losses/(gains) on defined 63 303 55 177
benefit plans
(422) (917) (536) (1,097)
Other comprehensive expense for the period from (522) (796) (639) (1,150)
continuing operations
Other comprehensive income for the period from - (595) - 333
discontinued operations
Total comprehensive income for the period(2) 1,012 9,468 4,271 13,184
Total comprehensive income for the period attributable
to:
Shareholders(2) 937 9,410 3,956 12,649
Non-controlling interests 75 58 315 535
1,012 9,468 4,271 13,184
(2) The Q3 2022 results have been restated to reflect the increase in the gain on
the demerger of Consumer Healthcare from £9.6 billion to £10.1 billion See
further details on page 39.
Balance sheet
30 September 2023 31 December 2022
£m £m
ASSETS
Non-current assets
Property, plant and equipment 8,814 8,933
Right of use assets 640 687
Goodwill 6,973 7,046
Other intangible assets 15,295 14,318
Investments in associates and joint ventures 75 74
Other investments 1,067 1,467
Deferred tax assets 5,610 5,658
Other non-current assets 1,148 1,194
Total non-current assets 39,622 39,377
Current assets
Inventories 5,480 5,146
Current tax recoverable 330 405
Trade and other receivables 8,544 7,053
Derivative financial instruments 143 190
Current equity investments 3,436 4,087
Liquid investments 70 67
Cash and cash equivalents 3,177 3,723
Assets held for sale 60 98
Total current assets 21,240 20,769
TOTAL ASSETS 60,862 60,146
LIABILITIES
Current liabilities
Short-term borrowings (4,843) (3,952)
Contingent consideration liabilities (1,024) (1,289)
Trade and other payables (15,582) (16,263)
Derivative financial instruments (121) (183)
Current tax payable (286) (471)
Short-term provisions (534) (652)
Total current liabilities (22,390) (22,810)
Non-current liabilities
Long-term borrowings (15,993) (17,035)
Corporation tax payable (78) (127)
Deferred tax liabilities (402) (289)
Pensions and other post-employment benefits (2,278) (2,579)
Derivative financial instruments (6) -
Other provisions (546) (532)
Contingent consideration liabilities (5,486) (5,779)
Other non-current liabilities (1,064) (899)
Total non-current liabilities (25,853) (27,240)
TOTAL LIABILITIES (48,243) (50,050)
NET ASSETS 12,619 10,096
EQUITY
Share capital 1,348 1,347
Share premium account 3,450 3,440
Retained earnings 7,017 4,363
Other reserves 1,318 1,448
Shareholders' equity 13,133 10,598
Non-controlling interests (514) (502)
TOTAL EQUITY 12,619 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 4,578 4,578 332 4,910
Other comprehensive (279) (343) (622) (17) (639)
income/(expense) for the period
Total comprehensive income/(expense) 4,299 (343) 3,956 315 4,271
for the period
Distributions to non-controlling interests (334) (334)
Contributions from non-controlling 7 7
interests
Dividends to shareholders (1,679) (1,679) (1,679)
Realised after tax losses on disposal (33) 33 -
or liquidation of equity investments
Share of associates and joint ventures 2 (2) -
realised profit/(loss) on disposal of equity
investments
Shares issued 1 8 9 9
Write-down on shares held by ESOP (153) 153 -
Trusts
Shares acquired by ESOP Trusts 2 1 (3) -
Share-based incentive plans 217 217 217
Hedging gain/loss after taxation 32 32 32
transferred to non-financial assets
At 30 September 2023 1,348 3,450 7,017 1,318 13,133 (514) 12,619
Share Share Retained Other Share- Non- Total
capital premium earnings(2) reserves holder's controlling equity(2)
£m £m £m £m equity(2) interests £m
£m £m
At 1 January 2022 1,347 3,301 7,944 2,463 15,055 6,287 21,342
Profit for the period(2) 13,461 - 13,461 540 14,001
Other comprehensive (259) (553) (812) (5) (817)
income/(expense) for the period
Total comprehensive income/(expense) 13,202 (553) 12,649 535 13,184
for the period(2)
Distributions to non-controlling interests (1,278) (1,278)
Non-cash distribution to non-controlling (2,960) (2,960)
interests
Contributions from non-controlling 8 8
interests
Deconsolidation of former subsidiaries (3,028) (3,028)
Dividends to shareholders (2,813) (2,813) (2,813)
Non-cash dividend to shareholders (15,526) (15,526) (15,526)
Realised after tax losses on disposal or 14 (14) -
liquidation of equity investments
Share of associates and joint ventures (1) 1 -
realised profits on disposal of equity
investments
Share issued 25 25 25
Write-down of shares held by ESOP Trusts (530) 530 -
Shares held by ESOP trust (164) 164 -
Shares acquired by ESOP Trusts 114 704 (818) -
Share-based incentive plans 268 268 268
At 30 September 2022(2) 1,347 3,440 3,098 1,773 9,658 (436) 9,222
(2) The Q3 2022 results have been restated to reflect the increase in the gain on
the demerger of Consumer Healthcare from £9.6 billion to £10.1 billion See
further details on page 39.
Cash flow statement nine months ended 30 September 2023
9 months 2023 9 months 2022
£m £m
Profit after tax from continuing operations 4,910 3,296
Tax on profits 775 706
Share of after tax loss/(profit) of associates and joint ventures 4 4
(Profit)/loss on disposal of interest in associates and joint ventures (1) -
Net finance expense 484 559
Depreciation, amortisation and other adjusting items 1,671 2,291
Increase in working capital (2,669) (667)
Contingent consideration paid (853) (789)
Decrease in other net liabilities (excluding contingent consideration paid) 94 443
Cash generated from operations attributable to continuing operations 4,415 5,843
Taxation paid (843) (1,110)
Net cash inflow/(outflow) from continuing operating activities 3,572 4,733
Cash generated from operations attributable to discontinued operations - 928
Taxation paid from discontinued operations - (163)
Net operating cash flows attributable to discontinued operations - 765
Total net cash inflows/(outflows) from operating activities 3,572 5,498
Cash flow from investing activities
Purchase of property, plant and equipment (828) (705)
Proceeds from sale of property, plant and equipment 21 13
Purchase of intangible assets (733) (802)
Proceeds from sale of intangible assets 12 126
Purchase of equity investments (92) (121)
(Increase)/decrease in liquid investments 47 -
Purchase of businesses net of cash acquired (1,459) (3,030)
Proceeds from sale of equity investments 834 115
Share transactions with minority shareholders - 1
Contingent consideration paid (7) (75)
Disposal of businesses 56 (19)
Investment in associates and joint ventures - (1)
Interest received 83 49
Proceeds from disposal of associates and joint ventures 1 -
Dividend and distributions from investments 201 -
Dividends from associates and joint ventures 1 -
Net cash inflow/(outflow) from continuing investing activities (1,863) (4,449)
Net investing cash flows attributable to discontinued operations - (3,783)
Total net cash inflow/(outflow) from investing activities (1,863) (8,232)
Cash flow from financing activities
Issue of share capital 9 25
Repayment of long-term loans (144) (9)
Issue of long-term notes 238 -
Repayment of short-term loans(3) (1,088) (5,020)
Net increase/(repayment) of other short-term loans(3) 1,394 813
Repayment of lease liabilities (148) (149)
Interest paid (480) (504)
Dividends paid to shareholders (1,679) (2,813)
Distribution to non-controlling interests (334) (390)
Contributions from non-controlling interests 7 8
Other financing items 176 126
Net cash inflow/(outflow) from continuing financing activities (2,049) (7,913)
Net financing cash flows attributable to discontinued operations - 10,074
Total net cash inflow/(outflow) from financing activities (2,049) 2,161
Cash flow statement nine months ended 30 September 2023 (continued)
9 months 2023 9 months 2022
£m £m
Increase/(decrease) in cash and bank overdrafts in the period (340) (573)
Cash and bank overdrafts at beginning of the period 3,425 3,819
Exchange adjustments (65) 106
Increase/(decrease) in cash and bank overdrafts (340) (573)
Cash and bank overdrafts at end of the period 3,020 3,352
Cash and bank overdrafts at end of the period comprise:
Cash and cash equivalents 3,177 3,606
Overdrafts (157) (254)
3,020 3,352
(3) Amended to reflect the gross cash flows with no impact on overall financing
cash flows.
Vaccines turnover - three months ended 30 September 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Shingles 825 9 15 414 (13) (6) 227 31 32 184 64 78
Shingrix 825 9 15 414 (13) (6) 227 31 32 184 64 78
Meningitis 441 - 3 272 (3) (1) 109 20 18 60 (13) (1)
Bexsero 266 (3) - 132 (20) (18) 104 22 21 30 25 46
Menveo 168 7 10 140 22 23 3 (25) (25) 25 (34) (29)
Other 7 (22) (22) - - - 2 - (50) 5 (29) (14)
RSV 709 - - 700 - - 2 - - 7 - -
Arexvy 709 - - 700 - - 2 - - 7 - -
Influenza 374 (4) (4) 317 (4) (5) 21 (25) (25) 36 20 27
Fluarix, FluLaval 374 (4) (4) 317 (4) (5) 21 (25) (25) 36 20 27
Established Vaccines 868 (2) 3 343 (10) (4) 170 (11) (9) 355 13 18
Infanrix, Pediarix 145 (23) (19) 82 (29) (26) 26 (37) (37) 37 19 32
Boostrix 169 (6) (2) 123 1 6 29 (19) (19) 17 (19) (14)
Hepatitis 157 (4) 1 95 (8) (3) 40 5 5 22 (4) 9
Rotarix 144 1 7 34 36 52 28 (3) (3) 82 (8) (2)
Synflorix 89 25 27 - - - 8 - - 81 29 30
Priorix, Priorix Tetra, 82 61 67 4 >100 >100 35 59 55 43 54 64
Varilrix
Cervarix 31 (22) (20) - - - 2 (71) (57) 29 (12) (12)
Other 51 6 10 5 (62) (46) 2 (78) (56) 44 69 62
Vaccines ex COVID 3,217 30 34 2,046 40 43 529 10 10 642 22 30
Pandemic vaccines 1 (83) (67) - - - - - - 1 (83) (67)
Pandemic adjuvant 1 (83) (67) - - - - - - 1 (83) (67)
Vaccines 3,218 30 33 2,046 40 43 529 10 10 643 21 29
Vaccines turnover - nine months ended 30 September 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Shingles 2,538 16 15 1,395 (6) (7) 684 41 38 459 >100 >100
Shingrix 2,538 16 15 1,395 (6) (7) 684 41 38 459 >100 >100
Meningitis 987 11 11 511 2 1 329 26 23 147 16 24
Bexsero 678 12 12 275 (7) (8) 316 29 26 87 43 54
Menveo 293 9 9 236 16 15 9 (25) (25) 48 (9) (4)
Other 16 (6) (6) - - - 4 - (25) 12 (8) -
RSV 709 - - 700 - - 2 - - 7 - -
Arexvy 709 - - 700 - - 2 - - 7 - -
Influenza 409 (7) (7) 318 (4) (5) 21 (25) (25) 70 (10) (6)
Fluarix, FluLaval 409 (7) (7) 318 (4) (5) 21 (25) (25) 70 (10) (6)
Established Vaccines 2,495 7 6 1,005 7 6 552 4 2 938 8 9
Infanrix, Pediarix 407 (16) (16) 224 (20) (21) 79 (22) (23) 104 1 5
Boostrix 472 2 1 316 10 9 92 (14) (16) 64 (7) (6)
Hepatitis 485 9 8 276 (1) (2) 132 25 22 77 28 32
Rotarix 466 23 23 159 >100 >100 89 (1) (3) 218 1 4
Synflorix 227 (4) (5) - - - 27 12 12 200 (6) (7)
Priorix, Priorix Tetra, 189 37 37 11 >100 >100 98 34 32 80 25 28
Varilrix
Cervarix 110 21 23 - - - 30 100 100 80 5 8
Other 139 31 29 19 - 16 5 (69) (69) 115 62 55
Vaccines ex COVID 7,138 22 21 3,929 21 19 1,588 22 19 1,621 25 28
Pandemic vaccines 143 >100 >100 - - - 123 - - 20 >100 >100
Pandemic adjuvant 143 >100 >100 - - - 123 - - 20 >100 >100
Vaccines 7,281 24 24 3,929 21 19 1,711 31 28 1,641 26 29
Specialty Medicines turnover - three months ended 30 September 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
HIV 1,623 9 15 1,088 9 15 345 4 4 190 24 41
Dolutegravir products 1,361 2 8 867 (1) 5 312 - - 182 30 47
Tivicay 340 (1) 7 192 (15) (10) 64 (4) (4) 84 75 >100
Triumeq 373 (20) (16) 263 (19) (14) 65 (25) (25) 45 (18) (9)
Juluca 171 8 12 134 8 15 34 6 3 3 - -
Dovato 477 32 37 278 39 46 149 18 18 50 47 59
Rukobia 30 43 52 28 33 43 2 100 100 - - -
Cabenuva 182 80 87 151 74 82 26 >100 >100 5 67 33
Apretude 37 >100 >100 37 >100 >100 - - - - - -
Other 13 (50) (42) 5 (38) (38) 5 (29) (43) 3 (73) (45)
Respiratory/ 769 12 18 528 9 15 119 24 24 122 13 28
Immunology
and Other
Nucala 413 13 19 241 7 13 97 28 29 75 17 30
Benlysta 349 13 20 287 12 18 25 19 19 37 23 43
Other 7 (50) (50) - >(100) >(100) (3) >(100) >(100) 10 (29) (14)
Oncology 200 22 26 111 34 39 72 3 3 17 55 82
Zejula 140 17 22 71 22 28 54 6 4 15 36 73
Blenrep 10 (72) (69) - (100) (100) 10 (37) (31) - - -
Jemperli 45 >100 >100 36 >100 >100 8 >100 >100 1 - -
Ojjaara 4 - - 4 - - - - - - - -
Other 1 >100 >100 - - - - - - 1 >100 >100
Specialty Medicines 2,592 11 17 1,727 10 16 536 8 8 329 21 38
ex COVID
Pandemic - (100) (100) - (100) (100) - (100) (100) - (100) (100)
Xevudy - (100) (100) - (100) (100) - (100) (100) - (100) (100)
Specialty Medicines 2,592 (6) (1) 1,727 8 14 536 7 7 329 (50) (43)
Specialty Medicines turnover - nine months ended 30 September 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
HIV 4,671 15 14 3,061 18 17 1,049 9 6 561 10 15
Dolutegravir products 3,963 7 6 2,472 7 6 957 4 2 534 12 18
Tivicay 1,037 3 3 588 - (1) 199 (2) (4) 250 16 23
Triumeq 1,139 (14) (14) 782 (11) (12) 214 (23) (25) 143 (13) (9)
Juluca 484 9 8 371 9 8 103 8 5 10 - 10
Dovato 1,303 39 38 731 44 42 441 29 26 131 52 60
Rukobia 82 46 45 76 41 41 5 >100 >100 1 >100 >100
Cabenuva 485 >100 >100 402 >100 >100 71 >100 >100 12 >100 >100
Apretude 97 >100 >100 97 >100 >100 - - - - - -
Other 44 (41) (41) 14 (42) (42) 16 (20) (25) 14 (55) (52)
Respiratory/ 2,162 15 15 1,475 12 11 343 26 24 344 15 24
Immunology
and Other
Nucala 1,184 15 16 686 7 6 281 31 28 217 25 34
Benlysta 960 17 17 788 16 15 73 22 20 99 21 30
Other 18 (55) (53) 1 - >(100) (11) >(100) >(100) 28 (33) (26)
Oncology 487 9 9 233 (1) (2) 219 18 16 35 46 67
Zejula 371 10 10 172 - (1) 166 17 14 33 38 67
Blenrep 30 (67) (67) (2) >(100) >(100) 32 (11) (11) - - -
Jemperli 81 >100 >100 59 >100 >100 21 >100 >100 1 - -
Ojjaara 4 - - 4 - - - - - - - -
Other 1 >100 >100 - - - - - - 1 >100 >(100)
Specialty Medicines 7,320 14 14 4,769 15 14 1,611 13 11 940 13 20
ex COVID
Pandemic 31 (99) (99) (1) >(100) >(100) 1 (100) (100) 31 (97) (97)
Xevudy 31 (99) (99) (1) >(100) >(100) 1 (100) (100) 31 (97) (97)
Specialty Medicines 7,351 (14) (15) 4,768 (4) (5) 1,612 (13) (15) 971 (45) (41)
General Medicines turnover - three months ended 30 September 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Respiratory 1,520 (10) (3) 747 (13) (7) 317 (4) (3) 456 (7) 5
Arnuity Ellipta 5 (74) (68) 4 (76) (82) - - - 1 (50) 50
Anoro Ellipta 142 10 15 71 9 15 48 17 15 23 - 13
Avamys/Veramyst 52 (27) (21) - - - 10 (33) (33) 42 (25) (18)
Flixotide/Flovent 98 (30) (24) 66 (31) (25) 12 (25) (19) 20 (33) (23)
Incruse Ellipta 43 (23) (20) 22 (33) (30) 14 (7) - 7 (12) (12)
Relvar/Breo Ellipta 239 (23) (18) 86 (45) (40) 81 (2) (2) 72 (1) 10
Seretide/Advair 202 (24) (14) 18 (69) (53) 55 (17) (18) 129 (9) 4
Trelegy Ellipta 537 15 23 388 14 21 69 15 17 80 23 40
Ventolin 175 (8) - 92 (6) - 24 (8) (12) 59 (11) 5
Other Respiratory 27 (21) (6) - - - 4 (43) (29) 23 (12) (4)
Other General Medicines 817 (11) - 40 (57) (50) 177 2 2 600 (8) 7
Dermatology 93 (1) 12 - - - 27 12 8 66 (6) 13
Augmentin 158 5 18 - - - 41 21 21 117 1 17
Avodart 90 5 10 - - - 28 4 7 62 5 12
Lamictal 83 (37) (31) 23 (67) (61) 28 4 - 32 (9) 6
Other 393 (14) (1) 17 (23) (14) 53 (13) (13) 323 (14) 2
General Medicines 2,337 (10) (2) 787 (18) (11) 494 (2) (2) 1,056 (8) 6
General Medicines turnover - nine months ended 30 September 2023
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Respiratory 5,079 4 5 2,529 4 3 1,040 3 1 1,510 6 13
Arnuity Ellipta 26 (42) (42) 21 (46) (49) - - - 5 (17) -
Anoro Ellipta 402 17 17 191 16 15 142 20 18 69 11 19
Avamys/Veramyst 250 5 7 - - - 45 (12) (14) 205 9 12
Flixotide/Flovent 351 (15) (14) 225 (19) (20) 50 (4) (4) 76 (6) -
Incruse Ellipta 122 (22) (22) 59 (33) (34) 44 (8) (8) 19 (10) (5)
Relvar/Breo Ellipta 801 (11) (10) 307 (28) (29) 271 7 5 223 3 10
Seretide/Advair 863 4 6 263 30 28 191 (10) (12) 409 (1) 5
Trelegy Ellipta 1,613 27 27 1,176 26 25 203 19 18 234 38 49
Ventolin 551 (2) (1) 287 (4) (5) 72 (13) (16) 192 5 13
Other Respiratory 100 (7) - - - - 22 - - 78 (8) (2)
Other General Medicines 2,565 (3) 4 214 (20) (21) 544 5 3 1,807 (2) 8
Dermatology 278 - 8 - - - 81 3 - 197 (1) 11
Augmentin 469 15 22 - - - 137 28 25 332 10 21
Avodart 272 10 11 - - - 87 7 5 185 11 14
Lamictal 327 (14) (12) 145 (25) (26) 83 4 1 99 (6) 2
Other 1,219 (8) 1 69 (7) (9) 156 (8) (10) 994 (7) 3
General Medicines 7,644 2 5 2,743 2 - 1,584 4 2 3,317 1 10
Commercial Operations turnover
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Three months ended 8,147 4 10 4,560 14 19 1,559 5 5 2,028 (13) (2)
30 September 2023
Nine months ended 22,276 1 2 11,440 5 4 4,907 5 2 5,929 (6) -
30 September 2023
Commercial Operations turnover ex COVID
Total US Europe International
Growth Growth Growth Growth
£m £% CER% £m £% CER% £m £% CER% £m £% CER%
Three months ended 8,146 10 16 4,560 14 19 1,559 5 5 2,027 4 17
30 September 2023
Nine months ended 22,102 12 13 11,441 13 12 4,783 12 10 5,878 9 16
30 September 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.
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
Q3 2023 Q3 2022 Growth Growth
£m £m £% CER%
Commercial Operations (total turnover) 8,147 7,829 4 10
Operating profit by segment
Q3 2023 Q3 2022 Growth Growth
£m £m £% CER%
Commercial Operations 4,188 3,950 6 13
Research and Development (1,371) (1,301) 5 9
Segment profit 2,817 2,649 6 15
Corporate and other unallocated costs (45) (44)
Adjusted operating profit 2,772 2,605 6 15
Adjusting items (823) (1,414)
Total operating profit 1,949 1,191 64 83
Finance income 24 22
Finance costs (182) (200)
Share of after tax profit/(loss) of associates - (1)
and joint ventures
Profit before taxation from continuing operations 1,791 1,012 77 99
Adjusting items reconciling segment profit and operating profit comprise items
not specifically allocated to segment profit. These include impairment and
amortisation of intangible assets, major restructuring costs, which include
impairments of tangible assets and computer software, transaction-related
adjustments related to significant acquisitions, proceeds and costs of
disposals of associates, products and businesses, significant legal charges
and expenses on the settlement of litigation and government investigations,
other operating income other than royalty income and other items.
Turnover by segment
9 months 2023 9 months 2022 Growth Growth
£m £m £% CER%
Commercial Operations (total turnover) 22,276 21,948 1 2
Operating profit by segment
9 months 2023 9 months 2022 Growth Growth
£m £m £% CER%
Commercial Operations 11,044 10,371 6 7
Research and Development (3,876) (3,548) 9 8
Segment profit 7,168 6,823 5 6
Corporate and other unallocated costs (134) (267)
Adjusted operating profit 7,034 6,556 7 10
Adjusting items (862) (1,991)
Total operating profit 6,172 4,565 35 39
Finance income 86 50
Finance costs (570) (609)
Share of after tax profit/(loss) of associates (4) (4)
and joint ventures
Profit/(loss) on disposal of associates and joint 1 -
ventures
Profit before taxation from continuing operations 5,685 4,002 42 46
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 30 September
2023, the Group's aggregate provision for legal and other disputes (not
including tax matters described on page 10) 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 Q2 2023 results:
Product Liability
Zantac
As announced on 11 October 2023, GSK has reached a confidential settlement in
the Cantlay/Harper case filed in California state court. The case, which was
set to begin trial on 13 November 2023, will be dismissed. The company has
also settled the three remaining breast cancer bellwether cases in California.
GSK will be dismissed from these cases. The settlements reflect the company's
desire to avoid the distraction related to protracted litigation. GSK does not
admit any liability in the settlements and will continue to vigorously defend
itself based on the facts and the science in all other Zantac cases.
The Delaware Superior Court has scheduled a hearing regarding admissibility of
expert testimony as to general causation for 22-25 January 2024. Cases in
other state courts are scheduled for trials from 2024.
Since 2019, there have been 15 peer-reviewed epidemiological studies conducted
looking at human data regarding the use of ranitidine. The resulting
scientific consensus is that there is no consistent or reliable evidence that
ranitidine increases the risk for any type of cancer. The 15th epidemiologic
study (You (2023)) was recently released. The study, which involved very large
numbers of patients across multiple databases from US, UK, Germany, Spain,
France, South Korea, and Taiwan, showed no statistically significant
association between ranitidine use and cancer overall or between ranitidine
use and any individual cancer.
Returns to shareholders
Quarterly dividends
The Board has declared a third interim dividend for 2023 of 14p per share (Q3
2022: 13.75p(4) per share).
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. In
setting its dividend policy, GSK considers the capital allocation priorities
of the Group, its investment strategy for growth alongside the sustainability
of the dividend.
Payment of dividends
The equivalent interim dividend receivable by ADR holders will be calculated
based on the exchange rate on 9 January 2024. 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 16 November 2023, with a record date of 17 November 2023 and a
payment date of 11 January 2024.
Paid/ Pence per Pence per £m
Payable share/ share/
pre share post share
consolidation consolidation
2023
First interim 13 July 2023 - 14 567
Second interim 12 October 2023 - 14 568
Third interim 11 January 2024 - 14 568
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
(4) Adjusted for the Share Consolidation on 18 July 2022. For details of the Share
Consolidation see page 51.
Weighted average number of shares
Q3 2023 Q3 2022
millions millions
Weighted average number of shares - basic 4,055 4,030
Dilutive effect of share options and share awards 57 58
Weighted average number of shares - diluted 4,112 4,088
Weighted average number of shares
9 months 2023 9 months 2022
millions millions
Weighted average number of shares - basic 4,050 4,024
Dilutive effect of share options and share awards 58 58
Weighted average number of shares - diluted 4,108 4,082
At 30 September 2023, 4,056 million shares (Q3 2022: 4,034 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 an
immaterial number of shares under employee share schemes in the quarter for
proceeds of £nil (Q3 2022: £5 million).
At 30 September 2023, the ESOP Trusts held 38.9 million GSK shares against the
future exercise of share options and share awards. The carrying value of £190
million has been deducted from other reserves. The market value of these
shares was £585 million.
At 30 September 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.
IAS 12 'Income Taxes'
On 20 June 2023, the UK Government substantively enacted legislation
introducing a global minimum corporate income tax rate, to have effect from
2024 in line with the Organisation for Economic Co-operation and Development's
(OECD) Pillar Two model framework. GSK has applied the mandatory IAS 12
'Income Taxes' exception under paragraph 98 M (b) and is not recognising any
deferred tax impact.
Accounting policies and basis of preparation
This unaudited Results Announcement contains condensed financial information
for the three and nine months ended 30 September 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.
Divestments: restatement of the gain on the demerger of Consumer Healthcare
Following finalisation of the demerger accounting, an adjustment of £0.5
billion to increase the gain on the demerger of Consumer Healthcare as
disclosed in Q3 2022 from £9.6 billion to £10.1 billion for the full-year
was recorded in Q4 2022. This gain relates to an adjustment for deferred
profit in inventory. These transactions were presented in profit from
discontinued operations (adjusting items) in the full-year 2022 results. The
comparator Q3 2022 results have been restated to reflect the increase in the
gain on demerger of Consumer Healthcare as described above. These transactions
are presented in profit from discontinued operations (adjusting items) in Q3
2022. The restatement of Q3 2022 impacts the gain on the demerger, earnings
per share from discontinued operations, total earnings per share, diluted
earnings per share from discontinued operations and total diluted earnings per
share.
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:
Q3 2023 Q3 2022 9 months 2023 9 months 2022 2022
Average rates:
US$/£ 1.26 1.18 1.24 1.26 1.24
Euro/£ 1.16 1.16 1.15 1.18 1.17
Yen/£ 182 161 173 160 161
Period-end rates:
US$/£ 1.23 1.11 1.23 1.11 1.20
Euro/£ 1.16 1.13 1.16 1.13 1.13
Yen/£ 183 160 183 160 159
Net assets
The book value of net assets increased by £2,523 million from £10,096
million at 31 December 2022 to £12,619 million at 30 September 2023. This
primarily reflected contribution from Total comprehensive income for the
period partly offset by dividends paid to shareholders.
At 30 September 2023, the net deficit on the Group's pension plans was £1,171
million compared with £1,355 million at 31 December 2022. This decrease in
the net deficit is primarily related to an increase to the UK discount rate
from 4.8% to 5.5%, and cash contributions of £353 million made to the UK
Pension schemes, offset by lower UK asset values, and an actuarial experience
adjustment for higher inflation than expected in UK pension increases of
approximately £400 million.
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 £890 million (31 December 2022: £1,093 million).
Contingent consideration amounted to £6,510 million at 30 September 2023 (31
December 2022: £7,068 million), of which £5,462 million (31 December 2022:
£5,890 million) represented the estimated present value of amounts payable to
Shionogi relating to ViiV Healthcare, £505 million (31 December 2022: £673
million) represented the estimated present value of contingent consideration
payable to Novartis related to the Vaccines acquisition and £539 million (31
December 2022: £501 million) represented the estimated present value of
contingent consideration payable to Affinivax. Of the contingent consideration
payable to Shionogi at 30 September 2023, £981 million (31 December 2022:
£940 million) is expected to be paid within one year.
Movements in contingent consideration are as follows:
9 months 2023 ViiV Group
Healthcare £m
£m
Contingent consideration at beginning of the period 5,890 7,068
Remeasurement through income statement and other movements 406 302
Cash payments: operating cash flows (834) (853)
Cash payments: investing activities - (7)
Contingent consideration at end of the period 5,462 6,510
9 months 2022 ViiV Group
Healthcare £m
£m
Contingent consideration at beginning of the period 5,559 6,076
Remeasurement through income statement and other movements 1,423 2,115
Cash payments: operating cash flows (774) (789)
Cash payments: investing activities (69) (75)
Contingent consideration at end of the period 6,139 7,327
Contingent liabilities
There were contingent liabilities at 30 September 2023 in respect of
arrangements 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
37 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. On 28 June 2023, GSK completed the
acquisition which was effected through a Plan of Arrangement (the
"Arrangement") pursuant to the Canada Business Corporations Act. The
Arrangement was approved by Bellus' shareholders on 16 June 2023. Upon
completion, GSK acquired all outstanding common shares of Bellus for US$14.75
per common share in cash, representing a total equity value of US$2 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). The values in the table below are provisional
and are subject to change.
The provisional fair values of the net assets acquired, including goodwill,
are as follows:
£m
Net assets acquired:
Intangible assets 1,438
Cash and cash equivalents 148
Other net assets/(liabilities) 50
Deferred tax liabilities (136)
1,500
Goodwill 107
Total consideration 1,607
All of the £1.6 billion consideration had been settled by 30th September
2023.
Post balance sheet event note
GSK completed the sale of 270 million shares in Haleon equivalent to 2.9% of
Haleon's issued share capital on 6 October 2023 at a price of 328 pence per
share raising gross proceeds of approximately £885.6 million.
Related party transactions
Details of GSK's related party transactions are disclosed on page 236 of our
2022 Annual Report.
Net debt information
Reconciliation of cash flow to movements in net debt
9 months 2023 9 months 2022
£m £m
Total Net debt at beginning of the period (17,197) (19,838)
Increase/(decrease) in cash and bank overdrafts (340) (7,629)
(Increase)/decrease in liquid investments (47) -
Net decrease/(increase) in short-term loans (306) 4,207
Net decrease/(increase) in long-term loans (94) 9
Repayment of lease liabilities 148 149
Net debt of subsidiary undertakings acquired 50 (20)
Exchange adjustments 304 (2,376)
Other non-cash movements (107) (119)
Decrease/(increase) in net debt from continuing operations (392) (5,779)
Decrease/(increase) in net debt from discontinued operations - 7,181
Total Net debt at end of the period (17,589) (18,436)
Net debt analysis
30 September 31 December
2023 2022
£m £m
Liquid investments 70 67
Cash and cash equivalents 3,177 3,723
Short-term borrowings (4,843) (3,952)
Long-term borrowings (15,993) (17,035)
Total Net debt at the end of the period (17,589) (17,197)
Free cash flow reconciliation from continuing operations
Q3 2023 9 months 2023 9 months 2022
£m £m £m
Net cash inflow/(outflow) from continuing operating activities 2,212 3,572 4,733
Purchase of property, plant and equipment (299) (828) (705)
Proceeds from sale of property, plant and equipment 11 21 13
Purchase of intangible assets (198) (733) (802)
Proceeds from disposals of intangible assets - 12 126
Net finance costs (11) (397) (455)
Dividends from associates and joint ventures - 1 -
Contingent consideration paid (reported in investing activities) (3) (7) (75)
Distributions to non-controlling interests (57) (334) (390)
Contributions from non-controlling interests - 7 8
Free cash inflow/(outflow) from continuing operations 1,655 1,314 2,453
R&D commentary
Pipeline overview
Medicines and vaccines in phase III development (including major lifecycle 17 Infectious Diseases (7)
innovation or under regulatory review)
• Arexvy (RSV vaccine) RSV older adults
• 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
• ibrexafungerp (antifungal glucan synthase inhibitor) invasive candidiasis
Respiratory/Immunology (4)
• Nucala (anti-IL5) 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
• camlipixant (P2X3 receptor antagonist) refractory chronic cough
Oncology (5)
• Ojjaara (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 non-small cell lung cancer
• cobolimab (anti-TIM-3) 2L non-small cell lung cancer
Opportunity driven (1)
• linerixibat (IBATi) cholestatic pruritus in primary biliary cholangitis
Total vaccines and medicines in all phases of clinical development 67
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
Arexvy (respiratory syncytial virus vaccine, adjuvanted)
In September 2023, Japan's Ministry of Health, Labour and Welfare (MHLW)
approved Arexvy (respiratory syncytial virus vaccine, recombinant adjuvanted)
for the prevention of respiratory syncytial virus (RSV) disease for adults 60
years of age and above. This is the first time an RSV vaccine for older adults
has been approved in Japan. This follows approvals in the US, Europe, the UK
and Canada.
In October 2023, new data from a phase III trial exploring the immune response
in adults 50 to 59 years of age after a single dose of the vaccine were
reported. Preliminary results showed that the trial met its primary endpoints
with the vaccine eliciting non-inferior immune responses in adults aged 50 to
59 at increased risk for RSV disease due to select underlying medical
conditions compared to adults aged 60 and above. The primary endpoint was also
met for the broader group of adults aged 50 to 59 enrolled in the trial.
Safety and reactogenicity data were consistent with results from the initial
phase III programme. These data will be submitted to regulators, with
decisions on potential label expansion expected in 2024.
Key phase III trials for Arexvy:
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 Primary data reported:
Q2 2022
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 Primary data reported:
Q2 2022;
two season data reported:
Q2 2023
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 Primary data reported:
Q4 2022
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)
Primary data reported:
NCT05559476 Q2 2023
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 Trial end:
Q2 2022
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 Primary data reported:
Q2 2023
RSV OA=ADJ-018 III A phase III, observer-blind, randomised, placebo-controlled trial to evaluate Trial start: Active, not recruiting; primary endpoint met
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 Primary data reported:
Q4 2023
RSV OA=ADJ-019 III An open-label, randomised, controlled, multi-country trial to evaluate the Trial start: Active, recruiting
immune response, safety and reactogenicity of RSVPreF3 OA investigational
(Adults ≥ 60 years old) vaccine when co-administered with PCV20 in adults aged 60 years and older Q2 2023
NCT05879107
RSV OA=ADJ-023 IIb A randomised, controlled, open-label trial to evaluate the immune response and Trial start: Active, recruiting
safety of the RSVPreF3 OA investigational vaccine in adults (≥50 years of
(Immunocompromised Adults 50-59 years) age) when administered to lung and renal transplant recipients comparing one Q3 2023
versus two doses and compared to healthy controls (≥50 years of age)
receiving one dose
NCT05921903
RSV-OA=ADJ-020 (Adults, aged >=50 years of age) III A study on the safety and immune response of investigational RSV OA vaccine in Trial start: Active, recruiting
combination with herpes zoster vaccine in healthy adults
NCT05966090 Q3 2023
Data anticipated:
H2 2024
bepirovirsen (HBV ASO)
Bepirovirsen, a triple-action antisense oligonucleotide, is a potential new
treatment option for people with chronic hepatitis B (CHB). It is being
evaluated in nucleos(t)ide analogue (NA) treated patients and as a sequential
therapy with existing and novel treatments with an aim to provide patients
with the first clinically meaningful functional cure for CHB. Two randomised,
double-blind, placebo controlled phase III trials (B-Well 1 and B-Well 2)
evaluating the safety and efficacy of bepirovirsen in NA treated patients
started in Q1 2023 and are progressing as planned in 31 countries.
Bepirovirsen is the only single agent in phase III development that has shown
clinically meaningful functional cure response for patients with CHB,
following positive results previously announced from the B-Clear and B-Sure
clinical trials.
At the upcoming American Association for the Study of Liver Diseases' (AASLD)
The Liver Meeting® 2023, taking place in Boston, MA from 10-14 November, GSK
will present full results from the B-Together phase IIb trial investigating
bepirovirsen followed by pegylated interferon alfa (Peg-IFN) as treatment for
people with CHB on NA therapy. The primary endpoint was the proportion of
patients with hepatitis B surface antigen (HBsAg) and hepatitis B virus (HBV)
DNA below the lower limit of quantification (LLOQ) for 24 weeks after planned
end of sequential treatment, in the absence of newly initiated antiviral
therapy (rescue therapy). While the addition of Peg-IFN to bepirovirsen did
result in a small increase to response, it did not materially improve patient
outcomes. All patients that met the primary endpoint had a baseline surface
antigen ≤3000 IU/mL, reinforcing results from B-Clear which showed that
treatment with bepirovirsen resulted in sustained clearance of HBsAg and HBV
DNA both in patients on concurrent nucleoside/nucleotide analogues (NA) and
patients not-on-NA therapy. In addition to confirming previous treatment
response seen with bepirovirsen, findings from B-Together provide important
insights for future novel sequential regimens with bepirovirsen as a potential
backbone therapy.
To further expand the development of bepirovirsen in novel sequential
regimens, we announced an agreement for an exclusive worldwide license to
develop and commercialise JNJ-3989, an investigational hepatitis B
virus-targeted small interfering ribonucleic acid (siRNA) therapeutic
initially developed by Arrowhead Pharmaceuticals. This agreement provides an
opportunity to investigate a novel sequential regimen to pursue functional
cure in an even broader patient population with bepirovirsen.
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
NCT05630807 chronic hepatitis B virus Q1 2023
Data anticipated: 2025+
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
Data anticipated: 2025+
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: Complete
(chronic hepatitis B) of sequential treatment with bepirovirsen followed by Pegylated Interferon
Alpha 2a in participants with chronic hepatitis B virus Q1 2021
NCT04676724
Data anticipated:
H2 2023
bepirovirsen sequential combination therapy with targeted immunotherapy II A trial on the safety, efficacy and immune response following sequential Trial start: Active, not 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 Data anticipated: 2025+
gepotidacin (bacterial topoisomerase inhibitor)
Gepotidacin is an investigational bactericidal, first-in-class antibiotic with
a novel mechanism of action for the treatment of uncomplicated urinary tract
infections (uUTI).
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: Recruitment complete
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
Data anticipated:
H1 2024
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
Data reported:
Q2 2023
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
Data reported:
Q2 2023
MenABCWY vaccine candidate
In September 2023, the phase IIIb MenABCWY 019 trial (NCT04707391) completed.
The randomised, controlled, observer-blind trial evaluated the safety and
immunogenicity of GSK's meningococcal ABCWY (MenABCWY) vaccine candidate when
administered in healthy adolescents and adults, previously primed with
meningococcal ACWY vaccine. MenABCWY vaccine was well tolerated with a
favourable safety profile. The data provide information for the label,
supporting use of MenABCWY in future potential US ACIP recommendations for
adolescent meningococcal vaccination. The data will be published in a peer
reviewed journal next year.
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: Complete
immunogenicity of GSK's meningococcal ABCWY vaccine when administered in
healthy adolescents and adults, previously primed with meningococcal ACWY Q1 2021
vaccine
NCT04707391
Data anticipated: H2 2023
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
Data reported:
Q1 2023
Additionally, in September a supplemental Biologics License Application (sBLA)
in Bexsero (meningitis B) was accepted for submission to the FDA.
HIV
cabotegravir
In September 2023, ViiV Healthcare announced that the European Commission
authorised Apretude (cabotegravir long-acting (LA) injectable and tablets) for
HIV prevention. Cabotegravir is indicated in combination with safer sex
practices for pre-exposure prophylaxis (PrEP) to reduce the risk of sexually
acquired HIV-1 infection in high-risk adults and adolescents (at least 12
years of age), weighing at least 35 kg. This authorisation marks a pivotal
milestone for people across the EU who could benefit from an innovative,
long-acting HIV prevention option that may better suit their personal
preferences. Long-acting PrEP, alongside other HIV prevention strategies,
plays an important role in helping to address some of the challenges that
people may have with oral PrEP options
In October 2023, ViiV Healthcare presented 46 abstracts across two medical
meetings - ID Week in the United States and the European AIDS Conference
(EACS) - advancing knowledge in the areas of treatment, prevention, and how to
improve the quality of care of specific patient populations. The data at both
meetings explored real-world evidence that evaluated the effectiveness,
safety, and tolerability of 2-drug and long-acting regimens, provided insights
from the study of heavily treatment-experienced individuals and shared
adherence and drug preference results from HCP- and patient-based studies.
ViiV also presented, at EACS, virologic response data from their
investigational asset N6LS, a broadly neutralising antibody.
In October 2023, the National Medical Products Administration (NMPA) of China
approved ViiV Healthcare's Vocabria (cabotegravir injection) used in
combination with the Janssen Pharmaceutical Companies of Johnson &
Johnson's Rekambys (rilpivirine long-acting injection) for the treatment of
HIV-1 infection. Prior to the recent marketing authorisation for rilpivirine
long-acting injection, cabotegravir injection and tablets were approved in
China in July 2023.
Respiratory/Immunology
camlipixant (P2X3 receptor antagonist)
The acquisition of Bellus in June 2023 included camlipixant (BLU-5937), an
investigational, highly selective oral P2X3 antagonist currently in
development for first-line treatment of adult patients suffering from
refractory chronic cough (RCC). The CALM phase III development programme to
evaluate the efficacy and safety of camlipixant for use in adults with RCC is
ongoing.
Trial name (population) Phase Design Timeline Status
CALM-1 (refractory chronic cough) III A 52-week, randomised, double-blind, placebo-controlled, parallel-arm efficacy Trial start: Recruiting
and safety trial with open-label extension of camlipixant in adult
participants with refractory chronic cough, including unexplained chronic Q4 2022
cough
NCT05599191
Data anticipated:
2025+
CALM-2 (refractory chronic cough) III A 24-week, randomised, double-blind, placebo-controlled, parallel-arm efficacy Trial start: Recruiting
and safety trial with open-label extension of camlipixant in adult
participants with refractory chronic cough, including unexplained chronic Q1 2023
cough
NCT05600777
Data anticipated:
2025+
depemokimab (long acting anti-IL5)
Depemokimab is a unique and distinct monoclonal antibody developed
specifically for its affinity for IL-5 and long duration of inhibition. The
phase III programme for depemokimab continues to make progress across a range
of eosinophil-driven diseases with phase III data expected to begin reading
out in H1 2024.
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
Data anticipated:
H1 2024
SWIFT-2 (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
NCT04718103
Data anticipated:
H1 2024
AGILE (SEA) III 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
(extension) adolescent participants with severe uncontrolled asthma with an eosinophilic Q1 2022
phenotype
NCT05243680
Data anticipated:
2025+
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
Data anticipated:
2025+
ANCHOR-1 (chronic rhinosinusitis with nasal polyps; CRSwNP) III Efficacy and safety of depemokimab in participants with CRSwNP Trial start: Recruiting
Q2 2022
NCT05274750
Data anticipated:
H2 2024
ANCHOR-2 (CRSwNP) III Efficacy and safety of depemokimab in participants with CRSwNP Trial start: Recruiting
Q2 2022
NCT05281523
Data anticipated:
H2 2024
OCEAN (eosinophilic granulomatosis with polyangiitis) III Efficacy and safety of depemokimab compared with mepolizumab in adults with Trial start: Recruiting
relapsing or refractory EGPA
Q3 2022
NCT05263934
Data anticipated:
2025+
DESTINY (hyper-eosinophilic syndrome) 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 Q3 2022
NCT05334368
Data anticipated:
2025+
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. Both DREAMM-7 and DREAMM-8 are
event-driven trials assessing the potential of belantamab mafodotin in
combination with standard of care regimens in the second-line and later
multiple myeloma treatment setting. Due to slower than anticipated event rate,
DREAMM-7 is now expected to read out in H1 2024 and DREAMM-8 is expected to
read out in H2 2024. Once available, data from these trials will be shared at
future scientific congresses.
Following a negative Committee for Medicinal Products for Human Use (CHMP)
opinion in September 2023, GSK has submitted for re-examination of the annual
renewal for the conditional marketing authorisation of Blenrep in the EU.
Key phase III trials for Blenrep:
Trial name (population) Phase Design Timeline Status
DREAMM-7 (2L+ multiple myeloma; MM) 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
Data anticipated:
H1 2024
DREAMM-8 (2L+ MM) 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
Data anticipated:
H2 2024
Jemperli (dostarlimab)
In July 2023, the US FDA approved Jemperli in combination with carboplatin and
paclitaxel, followed by Jemperli as a single agent for the treatment of adult
patients with primary advanced or recurrent endometrial cancer that is
mismatch repair deficient (dMMR), as determined by an FDA-approved test, or
microsatellite instability-high (MSI-H). Jemperli plus chemotherapy is the
first and only new frontline treatment option for this patient population, who
face significant unmet medical need and poor long-term outcomes with
chemotherapy alone.
Jemperli was also approved by the UK MHRA in October 2023 in combination with
platinum-containing chemotherapy for the treatment of adult patients with
dMMR/MSI-H primary advanced or recurrent endometrial cancer and who are
candidates for systemic therapy. The CHMP of the European Medicines Agency
(EMA) also adopted a positive opinion recommending approval of Jemperli in
this patient population. The application remains under review in Australia,
Canada, Switzerland and Singapore as part of the US FDA's Oncology Center of
Excellence Project Orbis framework, which allows for concurrent submission to
and review by US and other international regulatory authorities.
In October 2023, GSK announced positive headline results from a planned
analysis of Part 1 of the RUBY/ENGOT-EN6/GOG3031/NSGO phase III trial
investigating Jemperli plus standard-of-care chemotherapy (carboplatin and
paclitaxel), followed by dostarlimab as a single agent, compared to placebo
plus chemotherapy followed by placebo in adult patients with primary advanced
or recurrent endometrial cancer. The trial met its primary endpoint of overall
survival (OS), demonstrating a statistically significant and clinically
meaningful benefit in the overall patient population.
These updates further reinforce our ambition for Jemperli to become the
backbone of our ongoing immuno-oncology-based research and development
programme when used alone and in combination with standard of care and future
novel cancer therapies, aiming to transform patient lives across multiple
tumour types, including endometrial, colon and rectal cancers.
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)
Part 1 data reported:
NCT03981796 Q4 2022
Part 2 data anticipated:
H1 2024
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
Primary data reported:
Q4 2022
GARNET (advanced solid tumours) I/II A multi-centre, open-label, first-in-human trial evaluating dostarlimab in Trial start: Recruiting
participants with advanced solid tumours who have limited available treatment
options Q1 2016
NCT02715284
Primary data reported:
Q1 2019
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
Data anticipated: 2025+
AZUR-2 (untreated perioperative T4N0 or stage III colon cancer) III An open-label, randomised trial of perioperative dostarlimab monotherapy Trial start: Recruiting
versus standard of care in participants with untreated T4N0 or stage III
dMMR/MSI-H resectable colon cancer Q2 2023
NCT05855200
Data anticipated: 2025+
COSTAR Lung (advanced non-small cell lung cancer that has progressed on prior II/III A multi-centre, randomised, parallel group treatment, open label trial Trial start: Recruiting
PD-(L)1 therapy and chemotherapy) comparing cobolimab + dostarlimab + docetaxel to dostarlimab + docetaxel to
docetaxel alone in participants with advanced non-small cell lung cancer who Q4 2020
have progressed on prior anti-PD-(L)1 therapy and chemotherapy
NCT04655976
Data anticipated:
H2 2024
momelotinib (JAK1/2 and ACVR1/ALK2 inhibitor)
In September 2023, GSK announced that the US FDA approved momelotinib under
the brand name Ojjaara for the treatment of intermediate or high-risk
myelofibrosis, including primary myelofibrosis or secondary myelofibrosis
(post-polycythaemia vera and post-essential thrombocythaemia), in adults with
anaemia. To date, Ojjaara is the only approved medicine for both newly
diagnosed and previously treated myelofibrosis patients with anaemia that
addresses the key manifestations of the disease, namely anaemia,
constitutional symptoms, and splenomegaly (enlarged spleen).
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)
Primary data reported:
Q1 2022
Zejula (niraparib)
GSK is building a clinical development programme by assessing activity of
Zejula across multiple tumour types and in combination with other agents. The
ongoing development programme includes several combination studies, including
the FIRST phase III trial assessing niraparib in combination with dostarlimab,
a programmed death receptor-1 (PD-1)-blocking antibody, as a potential
treatment for first-line ovarian cancer maintenance; RUBY Part 2, the phase
III trial of niraparib and dostarlimab in recurrent or primary advanced (stage
III or IV) endometrial cancer; and the ZEAL phase III trial assessing
niraparib in combination with standard of care for the maintenance treatment
of first line advanced non-small cell lung cancer.
Key phase III trials for Zejula:
Trial name (population) Phase Design Timeline Status
ZEAL-1L (1L advanced non-small cell lung cancer maintenance ) 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
Data anticipated:
H2 2024
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
Data anticipated:
H1 2024
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 17 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 42.
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.
Discontinued operations
Consumer Healthcare was presented as a discontinued operation from Q2 2022.
The demerger of Consumer Healthcare was completed on 18 July 2022. The Group
Income Statement and Group Cash Flow Statement distinguish discontinued
operations from continuing operations.
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. 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 Total 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, Respiratory/Immunology and Other.
Percentage points
Percentage points of growth which is abbreviated to ppts.
Non-controlling interest
Non-controlling interest is the equity in a subsidiary not attributable,
directly or indirectly, to a parent.
RAR (Returns and Rebates)
GSK sells to customers both commercial and government mandated contracts with
reimbursement arrangements that include rebates, chargebacks and a right of
return for certain pharmaceutical products principally in the US. Revenue
recognition reflects gross-to-net sales adjustments as a result. These
adjustments are known as the RAR accruals and are a source of significant
estimation uncertainty and fluctuation which can have a material impact on
reported revenue from one accounting period to the next.
Year-to-date (YTD)
Year-to-date is the nine-month period in the year to 30 September 2023 or
the same prior period in 2022 as appropriate.
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 12 to 13 per cent, Adjusted
operating profit to increase between 13 to 15 per cent and Adjusted earnings
per share to increase between 17 to 20 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. In the year to date, GSK has
exceeded its full-year guidance expectations due to the continued strong and
broad-based performance of its business, including the successful launch of
Arexvy in Q3 2023, which has also benefitted from initial channel inventory
build. Currently, GSK assumes sales of Arexvy will track in line with
high-dose flu analogues. For the full year, the company expects Arexvy sales
between £0.9 to £1 billion. For full year sales, Vaccines are expected to
increase by around 20 per cent, Specialty Medicines, including HIV, are
expected to increase by low double-digit per cent and General Medicines are
expected to increase by low to mid-single-digit per cent.
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, 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 Q3 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. 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
and nine months ended 30 September 2023.
The condensed financial information comprises:
• the income statement and statement of comprehensive income for the three and
nine month periods ended 30 September 2023 on pages 25 to 26;
• the balance sheet as at 30 September 2023 on page 27;
• the statement of changes in equity for the nine month period then ended on
page 28;
• the cash flow statement for the nine month period then ended on pages 29 to
30; and
• the accounting policies and basis of preparation and the explanatory notes to
the condensed financial information on pages 31 to 42 that have been prepared
applying consistent accounting policies to those applied by GSK plc and its
subsidiaries ("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 31 to 42 and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed 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 and nine months ended 30 September 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 39.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 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 39, 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 United Kingdom adopted
International Accounting Standard 34, "Interim Financial Reporting".
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 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
1 November 2023
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