REG - GlaxoSmithKline PLC - 1st Quarter Results <Origin Href="QuoteRef">GSK.L</Origin> - Part 2
27/04/2016 12:25
- Part 2: For the preceding part double click ID:nRSa5073Wa
with Nucala, the newly launched treatment for
severe asthma, reporting sales of £6 million. Established Respiratory assets also grew, with Flovent sales up 1% to £89 million and Ventolin up 10% to £92 million. European Respiratory sales were down 13% to £348 million, with Seretide sales down 24% to £226 million (19% volume decline and a 5% negative impact of price and mix), reflecting continued competition from generics and the transition of the Respiratory portfolio to newer products. The new Ellipta products recorded combined sales of £40 million
in the quarter, including Relvar Ellipta sales of £30 million. Respiratory sales in the International region grew 1% to £437 million with Emerging Markets up 4% and Japan up 4%. Sales in Canada declined 13%. In Emerging Markets, sales of Seretide were down 8% at £111 million, primarily driven by a decline in China of 32%, while Ventolin grew 18% to £53 million. In Japan, growth in sales of Relvar Ellipta of 78% to £18 million in the quarter more than offset the Adoair decline of 11%. Cardiovascular,
metabolic and urology Q1 2016 (£184million; down 13%)Sales in the category were down 13% to £184 million. The Avodart franchise was down 26% to £132 million, primarily due to an 87% decline in the US following the launch of generic competition in Q4 2015 and supply disruption in Japan. Sales of Eperzan/Tanzeum were £25 million in the quarter, reflecting the progress of the product's launch in the US. Prolia was divested at the end of 2015 and therefore no sales were recorded in Q1 2016, compared with £8
million in Q1 2015. Immuno-inflammation Q1 2016 (£65million;up 3%)Immuno-inflammation sales grew 3% to £65 million. Benlysta sales in the quarter were £65 million, up 22%. In the US, Benlysta sales were £59 million, up 20%. Other pharmaceuticals Q1 2016 (£580million; down22%)Sales in other therapy areas decreased 22% to £580 million. Dermatology sales declined 12% to £96 million, adversely affected by supply constraints, while Augmentin sales were up 1% at £139 million. Sales of products for Rare
diseases declined 2% to £93 million, despite a 3% increase in sales of Volibris. Accelerated sales of inventory resulting from a change to certain supply agreements with Novartis amounted to £33 million. Established products Q1 2016 (£610million; down 8%)Established products turnover fell 8% to £610 million with sales in the US down 1% at £170 million. Lovaza sales fell 57% to £13 million. Europe was down 6% to £126 million, with Serevent sales down 10% to £10 million. International was down 12% to £314
million, with lower sales of Zeffix, down 26% to £28 million and Seroxat/Paxil down 11% to £33 million. HIV Q1 2016 (£729million; up 57%)HIV sales increased 57% to £729 million in the quarter, with the US up 76%, Europe up 39% and International up 31%. The growth in all three regions was driven by Triumeq and Tivicay. The ongoing roll-out of both Triumeq and Tivicay resulted in sales of £328 million and £188 million, respectively, in the quarter. Epzicom/Kivexa sales declined 15% to £154 million, and
Selzentry sales declined 3% to £30 million. There were continued declines in the mature portfolio, mainly driven by generic competition to both Combivir, down 50% to £5 million, and Lexiva, down 13% to £14 million.
Vaccines Q1 2016 Q1 2016
£m Reported Pro-forma
growth growth
CER% CER%
US 262 13 6
Europe 339 48 33
International 281 10 3
882 23 14
Q1 2016 Q1 2016
£m Reported Pro-forma
growth growth
CER% CER%
Rotarix 109 8 8
Synflorix 91 48 48
Fluarix, FluLaval 9 >100 >100
Bexsero 62 >100 >100
Menveo 42 >100 71
Boostrix 88 29 29
Infanrix, Pediarix 188 (3) (3)
Hepatitis 136 (8) (8)
Priorix, Priorix Tetra, Varilrix 63 1 1
Cervarix 17 (39) (39)
Other 77 >100 14
882 23 14
Q1 2016 (£882 million; up 23%) Vaccines sales grew 23% on a reported basis and 14% pro-forma to £882 million. On a reported basis, the US was up 13%, Europe up 48% and International up 10%. Both the reported and the pro-forma performances benefited from sales of the newly acquired products, particularly the Meningitis portfolio in Europe and the US. Sales also benefited from CDC purchases in the US and the phasing of Synflorix sales in International, partly offset by supply constraints in
Infanrix/Pediarix and Hepatitis A vaccines and lower demand for Cervarix in International. In the US, sales grew 13% on a reported basis and 6% pro-forma to £262 million. Pro-forma performance was boosted by the phasing of CDC purchases in the quarter for Menveo, Rotarix, Bexsero and Infanrix/Pediarix but also saw market and share growth in Bexsero, Boostrix and Pediarix. Growth was partly offset by higher rebates attributable to the sales mix and the adverse impact of the discontinuation of distribution
of Ixiaro. In Europe, sales grew 48% on a reported basis and 33% pro-forma to £339 million. Pro-forma growth was driven primarily by the Meningitis portfolio. Bexsero sales grew in private market channels in several countries including Italy, Spain, Portugal and Germany, and in the UK following its inclusion in the NHS immunisation programme. Menveo growth was driven primarily by tender awards in Italy. Boostrix sales also grew strongly, driven by demand in Germany and France as well as a tender award
in Poland. Infanrix/Pediarix sales were up mainly due to higher demand and competitor supply shortages in Germany and higher demand in the Netherlands, partly offset by increased competition in Italy. Sales also grew in Germany due to better Hepatitis A supply, and higher demand for Encepur and Rabipur. In International, sales grew 10% on a reported basis and 3% pro-forma to £281 million. Pro-forma growth in the quarter benefited from the phasing of Synflorix sales in Africa and Pakistan and strong
private market demand in India and Vietnam. The Meningitis portfolio grew in Brazil, led by Bexsero. Seasonal Flu sales were driven by higher uptake in Australia and favourable phasing in Brazil. Rabipur also contributed to the growth with strong demand in India. Growth was partly offset by lower sales of Infanrix/Pediarix and Hepatitis A vaccines due to supply constraints, and lower demand for Cervarix.
Consumer Healthcare
Q1 2016 Q1 2016
£m Reported Pro-forma
growth growth
CER% CER%
US 440 26 7
Europe 544 46 5
International 777 17 3
Total 1,761 26 4
Q1 2016 Q1 2016
£m Reported Pro-forma
growth growth
CER% CER%
Wellness 925 42 8
Oral health 520 6 6
Nutrition 176 (3) (7)
Skin health 140 93 (8)
Total 1,761 26 4
Q1 2016 (£1,761million; up 26%)The Consumer Healthcare business represents the Consumer Healthcare Joint Venture with Novartis together with the GSK Consumer Healthcare listed businesses in India and Nigeria, which are excluded from the Joint Venture. Reported sales grew 26% to £1,761 million, benefiting significantly from the inclusion of sales of the former Novartis products for a full quarter. On a pro-forma basis, growth was 4% (3% volume and 1% price), reflecting strong performances from power brands
within the Oral health and Wellness categories. The US and Europe delivered strong performances with pro-forma growth of 7% and 5%, respectively, but pro-forma sales growth in International was lower at 3%. Sales from new GSK innovations (product introductions within the last three years on a rolling basis) represented approximately 16% of sales, higher than in previous years primarily due to the performance of Flonase, which was switched to OTC in Q1 2015. Other notable launches within the quarter
included Sensodyne True White in US and Physiogel Calming Relief Face Care in Asia. US sales grew 26% on a reported basis to £440 million, and 7% on a pro-forma basis in the quarter driven by the continued strong performance of Flonase OTC which contributed the larger part of the pro-forma growth and demonstrated continued market share growth in the quarter. Sensodyne also grew strongly with continued momentum from the recent launch of Repair and Protect and this quarter's launch of True White, together
with distribution gains for Pronamel. In the quarter, Theraflu became the fastest growing brand in adult cold & flu due to the successful Warming Syrups format. Denture care and Tums benefited from improved supply, both delivering double-digit growth. These performances were partly offset by Lip care, which was impacted by the mild winter season. Sales in Europe grew 46% on a reported basis to £544 million and 5% pro-forma. The pro-forma performance was primarily driven by double-digit growth in the
Wellness category. Voltaren continued to deliver double the market consumption growth, driven largely by the 12-hour variant. In addition, in Germany and Sweden Otrivin recorded double-digit sales growth with new variant launches. Oral health sales were broadly flat, with growth in Sensodyne, Gum health and Denture care offset by a decline in Aquafresh due to increased competitive pressures in Family oral health. At a market level, sales growth was predominantly driven by Germany, together with the UK
and France, but was partly offset by a double-digit decline within CIS due to the impact on consumer spending of the weaker economic environment. International sales of £777 million grew 17% on a reported basis and 3% pro-forma, with strong growth in a number of priority markets. This was largely offset, on a pro-forma basis, by an adverse comparison with Q1 2015 in China which benefited from the Bactroban supply recovery, and by the impact of the restructuring of activity in Venezuela at the end of 2015
and the effective cessation of trading there since then, which impacted both the Skin health and Nutrition categories. In India, Horlicks sales were impacted by lower rural consumption and some wholesaler destocking in the quarter, although the brand continued to gain market share. Strong performances were delivered by Russia, which grew in double-digits benefiting from seasonal Wellness sales, and Brazil, which grew 34% driven by strong Oral health and Wellness sales. Oral health also performed strongly
across the region, registering 10% growth, driven by Sensodyne True White launches, continued condition awareness campaigns and regime line extensions.
Sales from new Pharmaceutical and Vaccine products
Q1 2016
£m Growth
CER%
Pharmaceuticals
Respiratory Relvar/Breo Ellipta 111 >100
Anoro Ellipta 33 >100
Arnuity Ellipta 3 >100
Incruse Ellipta 22 >100
Nucala 7 -
CVMU Eperzan/Tanzeum 25 >100
HIV Tivicay 188 60
Triumeq 328 >100
717 >100
Vaccines
Menveo 42 71
Bexsero 62 >100
104 >100
Total 821 >100
In 2015, GSK identified a series of New Pharmaceutical and Vaccine products that were expected to deliver at least £6 billion of revenues per annum on a CER basis by 2020. Those products, plus current clinical pipeline asset, Shingrix, are as set out above. Sales of the New Pharmaceutical Vaccine products are now expected to reach £6 billion of revenues per annum on a CER basis up to two years earlier (2018). Q1 2016Sales of New Pharmaceutical and Vaccine products were £821 million, grew £528 million pro
-forma in Sterling terms and represented approximately 18% of Pharmaceuticals and Vaccines turnover in the quarter.
Research and development
GSK remains focused on delivering an improved return on its investment in R&D. Sales contribution, reduced attrition and cost reduction are all important drivers of an improving internal rate of return. R&D expenditure is not determined as a percentage of sales but instead capital is allocated using strict returns based criteria depending on the pipeline opportunities available. The operations of Pharmaceuticals R&D are broadly split into Discovery activities (up to the completion of Phase IIa trials) and
Development work (from Phase IIb onwards) each supported by specific and common infrastructure and other shared services where appropriate. R&D expenditure for Q1 2016 is analysed below.
Q1 2016 Q1 2015
£m £m
Discovery 188 188
Development 259 314
Facilities and central support functions 128 108
Pharmaceuticals R&D 575 610
Vaccines 139 124
Consumer Healthcare 61 55
Core R&D 775 789
Amortisation and impairment of intangible assets 10 34
Major restructuring costs 27 32
Other items 3 12
Total R&D 815 867
R&D pipeline
At a presentation to investors in New York on 3 November 2015, GSK described a deep portfolio of innovation, focussed across six core areas of scientific research and development: HIV & Infectious diseases, Respiratory, Vaccines, Immuno-Inflammation, Oncology and Rare Diseases. Around 40 new potential medicines and vaccines were profiled, supporting the Group's outlook for growth in the period 2016-2020 and the significant opportunity the Group has to create value beyond 2020.
HIV and infectious diseases - including new options for long-term control and prevention of HIV and opportunities designed to cure or induce long-term remission in both Hepatitis B and C
News since Q4 2015:
· Announced completion of deals with BMS to acquire its late-stage HIV R&D assets and its portfolio of preclinical and discovery stage HIV research assets (22 February);
· Announced presentation at CROI of data from Phase IIb LATTE study results for first two drug, long-acting injectable regimen for HIV-1 treatment cabotegravir and rilpivirine (Edurant, Janssen) (23 February);
· Announced first Phase II HIV prevention study results for long-acting injectable cabotegravir (24 February).
Respiratory - including the next generation of respiratory medicines beyond inhaled treatments
News since Q4 2015:
· Interim data in-house for PI3 kinase delta inhibitor (2269557) shows improvement in exacerbating COPD patients which will be supportive of progression to late-stage development once confirmed by the full data;
· Announced data presented at AAAAI from the open label COSMOS study on the long-term efficacy & safety of Nucala for the treatment of severe asthma with an eosinophilic phenotype (5 March);
· Announced data presented at AAAAI on efficacy of Nucala in severe asthma patients stratified by eosinophil levels (7 March);
· Announced Japan approval of Nucala for severe eosinophilic asthma (29 March).
Vaccines - including a novel maternal immunisation platform for vaccines.
Immuno-inflammation-a portfolio of new antibodies & novel orals for inflammatory diseases including rheumatoid arthritis, Sjögren's syndrome, osteoarthritis and inflammatory bowel disease
News since Q4 2015:
· Announced publication of a new long-term analysis showing that patients with moderate-to-severe systemic lupus erythematosus (SLE) treated with Benlysta over five years experienced low rates of organ damage progression (3 March);
· Positive headline data received in house from a Phase IIIb study of Benlysta i.v. in SLE patients in Northeast Asia. Full results will be submitted for presentation at an upcoming scientific conference (4 March);
· Announced start of Phase II study of anti GM-CSF antibody (3196165) for inflammatory hand osteoarthritis (18 April).
Oncology - leading-edge molecules in the field of epigenetics and immuno-oncology for the treatment of cancer
News since Q4 2015:
· Adaptimmune announced that FDA granted Breakthrough Therapy designation for the affinity enhanced T-cell therapy targeting NY-ESO in synovial sarcoma (9 February);
· Presented preliminary data at AACR from Phase I/II study of BET inhibitor, 525762, in NUT midline carcinoma and other tumour types (17 April).
Rare diseases - breakthrough cell and gene therapies for treatment of rare diseases
News since Q4 2015:
· Japan's Agency for Medical Research and Development (AMED) named the SAP mAb + SAP depleter (2398852 + 2315698) for pre-designation review as an orphan drug candidate (2 March);
· Announced positive opinion from CHMP recommending marketing authorisation for Strimvelis to treat patients with ADA-SCID (1 April);
· As a result of safety findings in Ionis' ongoing NEURO-TTR study for their ISIS-TTRRx programme (2998728), the FDA has questions on our planned CARDIO-TTR study and placed it on clinical hold (7 April).
Pipeline news flow since Q4 2015 for other assets not profiled at the Investor event:
· Filed Relvar for COPD in Japan (26 February);
· FDA approved inclusion within the Incruse Ellipta's prescribing information of positive clinical data for COPD patients who used Incruse Ellipta in combination with Breo Ellipta or Advair Diskus (24 February);
· Announced publication of results from the AUSTRI (adult LABA safety) study of Advair in the New England Journal of Medicine (6 March);
· Announced headline data from VESTRI (paediatric LABA safety) study of Advair which achieved primary endpoint in children aged 4-11 years with asthma (17 March).
Listed below are the ~40 pipeline assets profiled at our R&D event in November 2015 which are in active clinical development.
Respiratory Phase
3008348 (Alpha V beta 6 integrin antagonist) Idiopathic pulmonary fibrosis Ph I
2862277 (TNFR1 dAb) Acute lung injury Ph II
danirixin (CXCR2 antagonist) COPD Ph II
2269557 (PI3 kinase delta inhibitor) COPD & asthma Ph II
2245035 (TLR7 agonist) Asthma Ph II
Nucala (mepolizumab) Severe eosinophilic asthma Approved (US & EU) Nov/Dec 2015
COPD Ph III
Nasal polyposis Ph II
Hypereosinophilic syndrome Ph II
FF+UMEC+VI (Closed triple) COPD Ph III
Asthma Ph II
HIV/Infectious diseases Phase
3389404 (HBV LICA antisense oligonucleotide)1 Hepatitis B Ph I
2878175 (NS5B inhibitor) Hepatitis C Ph I
3228836 (HBV antisense oligonucleotide)1 Hepatitis B Ph I
cabotegravir + rilpivirine (Integrase inhibitor + NNRTI, both long-acting parenteral formulations) HIV infections Ph II
cabotegravir (long-acting integrase inhibitor) HIV pre-exposure prophylaxis Ph II
gepotidacin (Type 2 topoisomerase inhibitor) Bacterial infections Ph II
dolutegravir + rilpivirine (Integrase inhibitor + NNRTI) HIV infections - two drug maintenance regimen Ph III
Immuno-inflammation Phase
2982772 (RIP1 kinase inhibitor) Rheumatoid arthritis, Psoriasis, Ulcerative colitis Ph I
2618960 (IL7 receptor mAb) Sjögren's syndrome Ph I
3050002 (CCL20 mAb) Psoriatic arthritis Ph I
2831781 (LAG3 mAb) Autoimmune diseases Ph I
2330811 (OSM mAb) Systemic sclerosis Ph I
3196165 (GM-CSF mAb) Rheumatoid arthritis and hand osteoarthritis Ph II
Benlysta + Rituxan (BLyS mAb, s.c. + CD20 mAb) Sjögren's syndrome Ph II
Benlysta (BLyS mAb, s.c.) Systemic lupus erythematosus Ph III
sirukumab (IL6 human mAb) Rheumatoid arthritis and giant cell arteritis Ph III
Oncology Phase
525762 (BET inhibitor) Solid tumours and haematological malignancies Ph I
2879552 (LSD1 inhibitor) Acute myeloid leukaemia and small cell lung cancer Ph I
3174998 (OX40 agonist mAb) Solid tumours and haematological malignancies Ph I
3377794 (NY-ESO-1 T-cell receptor)2 Sarcoma, multiple myeloma, non-small cell lung cancer, melanoma and ovarian cancer Ph II
tarextumab (Notch 2/3 mAb)3 Small cell lung cancer Ph II
Vaccines Phase
RSV Respiratory syncytial virus prophylaxis Ph I
RSV Respiratory syncytial virus prophylaxis (maternal immunisation) Ph II
Group B Streptococcus Group B streptococcus prophylaxis (maternal immunisation) Ph II
Men ABCWY Meningococcal A,B,C,W,Y disease prophylaxis in adolescents Ph II
COPD Reduction of COPD exacerbations associated with non-typeable Haemophilus influenzae and Moraxella catarrhalis Ph II
Shingrix Shingles prophylaxis Ph III
Rare diseases Phase
2696277 (ex-vivo stem cell gene therapy)4 Beta thalassemia Ph I
2398852 + 2315698 (SAP mAb + SAP depleter) Amyloidosis Ph II
2696274 (ex-vivo stem cell gene therapy) Metachromatic leukodystrophy Ph II
2696275 (ex-vivo stem cell gene therapy) Wiscott-Aldrich syndrome Ph II
Strimvelis 2696273 (ex-vivo stem cell gene therapy) Adenosine deaminase severe combined immune deficiency (ADA-SCID) EU: CHMP positive opinion Apr 2016US: Ph II/III
2998728 (TTR production inhibitor)1 Transthyretin amyloidosis Ph III
mepolizumab (IL5 mAb) Eosinophilic granulomatosis with polyangiitis Ph III
Other pharmaceuticals
daprodustat (1278863, prolyl hydroxylase inhibitor) Wound healing Ph I
daprodustat (1278863, prolyl hydroxylase inhibitor) Anaemia associated with chronic renal disease Ph II
1 Option-based alliance with Ionis Pharmaceuticals
2 Option-based alliance with Adaptimmune Ltd.
3 Option-based alliance with OncoMed Pharmaceuticals
4 Option-based alliance with Telethon and Ospedale San Raffaele
The full version of the GSK product development pipeline chart with all clinical assets in Phase I to Phase III can be found at:https://gsk.com/media/1017505/product-pipeline-march-2016.pdf
Definitions
Core resultsTotal reported results represent the Group's overall performance. However, these results can contain material unusual or non-operational items that may obscure the key trends and factors determining the Group's operational performance. As a result, GSK also reports core results. Core results exclude the following items from total results: amortisation and impairment of intangible assets (excluding computer software) and goodwill; major restructuring costs, including those costs following
material acquisitions; legal charges (net of insurance recoveries) and expenses on the settlement of litigation and government investigations, transaction-related accounting adjustments for significant acquisitions, and other items, including disposals of associates, products and businesses and other operating income other than royalty income, together with the tax effects of all of these items. GSK believes that core results are more representative of the performance of the Group's operations and allow the
key trends and factors driving that performance to be more easily and clearly identified by shareholders. The definition of core results, as set out above, also aligns the Group's results with the majority of its peer companies and how they report earnings. Reconciliations between total and core results, as set out on pages 8 and 40 to 41, including detailed breakdowns of the key non-core items, are provided to shareholders to ensure greater visibility and transparency as they assess the Group's
performance. CER growthIn 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. All commentaries are presented in terms of CER growth, unless otherwise stated. Pro-forma growthThe Novartis transaction completed on 2 March 2015 and
so GSK's reported results include the results of the former Novartis Vaccines and Consumer Healthcare businesses and exclude the results of the former GSK Oncology business, both from 2 March 2015. Pro-forma growth rates are calculated comparing reported turnover for Q1 2016 with the turnover for Q1 2015 adjusted to include the equivalent results of the former Novartis Vaccines and Consumer Healthcare businesses and to exclude the results of the former GSK Oncology business from 1 January 2015 to 2 March
2015. Free cash flowFree cash flow is the net cash inflow from operating activities less capital expenditure, interest and dividends paid to non-controlling interests plus proceeds from the sale of property, plant and equipment and dividends received from joint ventures and associated undertakings. 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.
Adjusted free cash flowAdjusted free cash flow excludes payments made to settle legal disputes. Free cash flow conversionFree cash flow conversion is free cash flow as a percentage of earnings excluding after-tax legal charges and legal settlements. Adjusted net cash inflow from operating activitiesAdjusted net cash inflow from operating activities excludes payments made to settle legal disputes. Working capital conversion cycleThe working capital conversion cycle is calculated as the number of days sales
outstanding plus days inventory outstanding, less days purchases outstanding.
Brand names and partner acknowledgementsBrand names appearing in italics throughout this document are trademarks of GSK or associated companies or used under licence by the Group.
Outlook assumptions and cautionary statements
Assumptions related to 2016 guidance and 2016-2020 outlookIn outlining the expectations for 2016 and the five-year period 2016-2020, 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. For the Group specifically, over the period to 2020 GSK expects further declines in sales of Seretide/Advair. The introduction of a generic
alternative to Advair in the US has been factored into the Group's assessment of its future performance. The Group assumes no premature loss of exclusivity for other key products over the period. The Group's expectation of at least £6 billion of revenues per annum on a CER basis by 2020 from products launched in the last three years includes contributions from the current pipeline asset Shingrix. This target is now expected to be met up to two years earlier. The Group also expects volume demand for its
products to increase, particularly in Emerging Markets. The assumptions for the Group's revenue and earnings expectations assume no material interruptions to supply of the Group's products and no material mergers, acquisitions, disposals, litigation costs or share repurchases for the Company; and no change in the Group's shareholdings in ViiV Healthcare or Consumer Healthcare. They also assume no material changes in the macro-economic and healthcare environment. The Group's expectations assume successful
delivery of the Group's integration and restructuring plans over the period 2016-2020. Material costs for investment in new product launches and R&D have been factored into the expectations given. The expectations are given on a constant currency basis and assume no material change to the Group's effective tax rate.
Assumptions and cautionary statement regarding forward-looking statementsThe Group's management believes that the assumptions outlined above are reasonable, and that the aspirational targets described in this report are achievable based on those assumptions. However, given the longer term nature of these expectations and targets, 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, macroeconomic activity, changes in regulation, government actions or intellectual property protection, 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, and financial results. Other than in accordance with its legal or regulatory obligations (including under 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. 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 2015 and those discussed in Part 2 of the Circular to Shareholders and Notice of General Meeting furnished to the SEC on Form 6-K on 24 November 2014. 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.
Cautionary statement regarding unaudited pro-forma financial informationThe unaudited pro-forma financial information in this release has been prepared to illustrate the effect of (i) the disposal of the Oncology business, (ii) the Consumer Healthcare Joint Venture (i.e. the acquisition of the Novartis OTC Business), and (iii) the acquisition of the Vaccines business (which excludes the Novartis influenza vaccines business) on the results of the Group as if they had taken place as at 1 January 2015. The
unaudited pro-forma financial information has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and, therefore, does not represent the Group's actual financial position or results. The unaudited pro-forma financial information does not purport to represent what the Group's financial position actually would have been if the disposal of the Oncology business, the Consumer Healthcare Joint Venture and the Vaccines acquisition had been completed on the dates
indicated; nor does it purport to represent the financial condition at any future date. In addition to the matters noted above, the unaudited pro-forma financial information does not reflect the effect of anticipated synergies and efficiencies associated with the Oncology disposal, the Consumer Healthcare Joint Venture and the Vaccines acquisition. The unaudited pro-forma financial information does not constitute financial statements within the meaning of Section 434 of the Companies Act 2006. The
unaudited pro-forma financial information in this release should be read in conjunction with the financial statements included in (i) the Group's Q1 2016 results announcement dated 27 April 2016 and furnished to the SEC on Form 6-K, (ii) the Group's Annual Report on Form 20-F for 2015 and (iii) the Circular to Shareholders and Notice of General Meeting furnished to the SEC on Form 6-K on 24 November 2014.
Contacts
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