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GSK reported stronger-than-expected earnings for the second quarter of 2025, with earnings per share (EPS) surpassing forecasts. The pharmaceutical giant posted an EPS of $1.24, compared to the anticipated $1.18, marking a 5.08% surprise. Revenue came in at $10.64 billion, exceeding projections of $10.58 billion. In pre-market trading, GSK’s stock rose by 0.82% to $37.98, reflecting investor optimism. With a market capitalization of $76.26 billion and an impressive gross profit margin of 71.92%, GSK maintains its position as a prominent player in the pharmaceutical industry. InvestingPro analysis reveals 10+ additional insights about GSK’s financial health and growth prospects.
Key Takeaways
- GSK’s EPS and revenue both exceeded market expectations for Q2 2025.
- The company achieved significant growth in core operating profit and group sales.
- GSK is preparing for several product launches and expanding its specialty medicines segment.
- The stock experienced a positive pre-market reaction, rising 0.82%.
Company Performance
GSK demonstrated robust performance in Q2 2025, with group sales increasing by 6% and core operating profit rising by 12%. Core earnings per share grew by 15% to 46.5 pence. The company’s focus on expanding its specialty medicines and launching new products in respiratory, immunology, oncology, and HIV contributed to this growth. GSK’s strategic investments in US manufacturing and supply chain optimization also supported its performance.
Financial Highlights
- Revenue: $10.64 billion, up from forecasted $10.58 billion
- Earnings per share: $1.24, beating forecast of $1.18
- Core operating profit: Up 12% year-over-year
- Cash generation: £3.7 billion in the first half of 2025
Earnings vs. Forecast
GSK’s actual EPS of $1.24 exceeded the forecast of $1.18, representing a 5.08% surprise. Revenue also surpassed expectations, coming in at $10.64 billion compared to $10.58 billion projected. This performance highlights GSK’s ability to effectively manage costs and drive sales growth.
Market Reaction
Following the earnings announcement, GSK’s stock rose 0.82% in pre-market trading to $37.98. The stock’s movement is a positive indicator of investor confidence, as it approaches the higher end of its 52-week range. The broader market also showed favorable trends, supporting GSK’s stock performance. According to InvestingPro data, GSK trades with notably low price volatility (Beta: 0.27) and appears undervalued based on Fair Value analysis. The company has maintained dividend payments for 25 consecutive years, currently offering a 4.54% yield.
Outlook & Guidance
GSK expects to reach the top end of its financial guidance for 2025, with sales projected to exceed £40 billion by 2031. The company is increasing guidance for its specialty, HIV, and vaccines segments. It plans to start four pivotal trials in the second half of 2025. InvestingPro data shows strong free cash flow yield and solid interest coverage ratios, supporting the company’s growth initiatives. For detailed analysis of GSK’s growth potential and comprehensive financial metrics, investors can access the exclusive Pro Research Report, available to InvestingPro subscribers.
Executive Commentary
CEO Emma Walmsley expressed confidence in GSK’s growth trajectory, stating, "We are highly confident in our outlook for sales of more than £40 billion by 2031." Chief Scientific Officer Tony Wood highlighted the impact of fibrotic diseases, noting, "Fibrotic diseases are thought to account for 45% of all deaths worldwide."
Risks and Challenges
- Supply chain optimization remains a focus as GSK scales up capacity.
- Market saturation in key segments like HIV and respiratory may pose challenges.
- Regulatory hurdles and pricing pressures in the US market are potential risks.
- Global economic uncertainties could impact future performance.
Q&A
During the earnings call, analysts inquired about GSK’s discussions with the FDA regarding the Glenrep product, which are reportedly constructive. The company also received positive market feedback for Depamokumab in respiratory treatments. Additionally, GSK is exploring direct-to-consumer options for certain products, indicating a strategic shift in its market approach.
Full transcript - GSK plc DRC (GSK) Q2 2025:
Call Moderator, GSK: Ladies and gentlemen, a very warm welcome to the GSK Q2 twenty twenty five Results Call. I’m delighted to be joined today by Emma Warmsley, Tony Wood, Luke Miles, Deborah Waterhouse and Julie Brown, with David Redfern joining for Q and A. Today’s call will last approximately one hour with the presentation taking around thirty minutes and the remaining time for your questions. Please ask only one to two questions so that everyone has a chance to participate. Before we start, please turn to Slide three.
This is the usual safe harbor statement. We will comment on our performance using constant exchange rates, or CR, unless otherwise stated. I will now hand over to Emma on Slide four.
Emma Walmsley, CEO, GSK: Thank you, and welcome to everybody joining us today. Please turn to the next slide. Our second quarter results once again demonstrate GSK’s strong performance momentum and the quality and strength of our portfolio. Group sales were up 6% for the quarter, core operating profit was up 12%, and core earnings per share grew 15% to 46.5p. Sales growth was driven by our largest business, specialty medicines, up 15%, and vaccine sales also contributed with sales up 9% in the quarter.
This led to increases in profits and earnings, which also benefited from a strong focus on SG and A. Alongside operating performance, we continue to make good progress in r and d, with three FDA approvals achieved so far this year. Cash generation also remains very positive with £3,700,000,000 generated in the first half to support further investments in growth and returns to shareholders. The dividend for the quarter was 16p, and we’ve now completed more than £800,000,000 of the share buyback program initiated in February. All of this is underscored by our commitment to operating as a responsible business.
Our most recent action being to expand our voluntary licence agreement with the Medicines Patent Pool to now include long acting cabotegravir for treatment of HIV as well as prevention. And finally, driven by our strong performance, we’re confirming today that we now expect to be towards the top end of the financial guidance given for 2025. Next slide, please. Following the demerger of Halion, we made a commitment to drive a step change in performance at GSK. This quarter has again shown that GSK is delivering consistent sales growth, operating leverage and positive financial performance.
The investments and development choices we made in our portfolio, notably to launch new specialty medicines, have really helped to drive these new performance levels. In the last three years, we’ve launched innovations in respiratory, immunology, oncology and HIV, And we have a lot more to come. Alongside our new vaccine to prevent meningitis and an antibiotic to treat urinary tract infections, three of the five product approvals we expect this year are specialty medicines. Tony will talk to each of them in more detail shortly. But let me touch just briefly on BLENREP.
As you’ll have seen, the FDA has extended the review period for BLENREP with a new target action date of the October 23. We remain very confident that BLENRAP can bring significant benefit to patients with multiple myeloma in The US and are in constructive discussions with the agency. Meanwhile, we continue to receive approvals and prepare for launches of BLENRAP in many other countries, including across Europe, Japan, Canada, The UK and Switzerland. So with the portfolio we have and the launches to come, we expect specialty to be a major driver of growth for GSK. Our specialty business accounts for around 40% of sales today, and we expect this to be well over 50% by 02/1931.
Next slide, please. As we’ve consistently said and demonstrated, our number one priority for capital allocation is to invest for growth. We’re doing this by focusing strongly on the delivery of the 14 scale opportunities we’ve previously highlighted, all of them with peak year sales above £2,000,000,000. By ensuring we have appropriate resources for priority launches and by prioritizing capital in r and d to r I and I and oncology, both organically and with targeted business development. RBD has real momentum and is a key driver of pipeline expansion.
We’ll be adding four high potential assets to late stage development this year, and three starting phase three were sourced through Disciplined BD, IDRX, emsifosfermin and our ADC targeting b seven h three. And we’ll also begin a pivotal trial to support our four monthly long acting injectable regimen for HIV treatment. And we continue to add high value innovation at earlier stages of development too. The pioneering strategic collaboration announced with Hangrui this week is another excellent example of this. Lastly and very importantly, we continue to optimize our supply chain with significant investment in US manufacturing and scaling up of capacity for our new modalities and technology platforms.
And as we said last quarter, our overall planned investment in The USA is in the tens of billions of dollars over the next five years. Next slide, please. With the breadth of our current business and the growth opportunities we have in our pipeline, we are highly confident in our outlook for sales of more than £40,000,000,000 by 02/1931. And as we’ve repeatedly demonstrated with our pipeline development, this long term outlook has consistently improved, and we are ambitious and committed to do more. Next slide, please.
So overall, with the momentum we have and the progress we’re making, we’re very confident we can deliver the targets we’ve set for growth in the short, medium, and longer term. Let me now hand over to Tony to talk to you in more depth about our great r and d progress. Next slide, please.
Tony Wood, Chief Scientific Officer, GSK: Thank you, Emma. Next slide, please. Our number one priority in r and d is to develop transformational specialty medicines and vaccines in areas of high unmet need that positively impact health and deliver significant growth. This is evident in the 14 scale opportunities we have for launch before 02/1931, and in the progress we’re making to expand and accelerate our early stage pipeline of first and best in class assets. We remain focused on four core therapy areas enabled by advanced technologies, talent, and a network of world class partnerships, and we continue to deepen our expertise in the science of the immune system.
This is most recently exemplified with our work to develop IL five medicines for lung diseases, which is providing us with a better understanding of the role of the immune system in fibro inflammation, leading us to target diseases beyond the lung towards kidney, liver, and with the potential future application in neuroimmunology. Next slide, please. Based on decades of research, we have a unique understanding of the role that inflammation plays in chronic airway disease. Our focus on the underlying biology of inflammation, notably in COPD, has led to a differentiated pipeline of long acting options, each strongly supported by human genetics, disease phenotyping, and insights from our own scaled clinical trials. In May, we received FDA approval for Nucala for the treatment of COPD.
This is the fifth indication for Nucala in The US. We’ve also filed Depamokumab, our novel ultra long acting IL-five antagonist for the treatment of asthma and chronic rhinosinusitis with nasal polyps with regulators, and we have a PDUFA date of sixteen December. I’m also pleased to report for the first time today positive results from the AGILE continuation study, which further underscore the sustained efficacy and safety over a two year period of twice yearly Depamokumab. AGILE is an open label twelve month extension study in severe asthma patients who completed either ZWF-one or ZWF-two. The results show that patients who continue to receive Depamokumab maintained the efficacy achieved in the prior trials.
Importantly, patients who crossed over from placebo also saw a reduction in exacerbation rates consistent with results in Zwift.
Call Moderator, GSK: As a reminder, the Zwift studies demonstrated a seventy two percent reduction in exacerbations requiring hospitalization for patients who received DEPI. I’m also pleased to confirm today that we started an extensive development program for DEPI as an add on
Tony Wood, Chief Scientific Officer, GSK: treatment in COPD. The ENDURA trials are now recruiting, and the vigilant trial designed to evaluate efficacy in earlier stage disease is planned to start later this year. As the only company with a range of ultra long acting mechanisms, specifically IL-five, IL-thirty three, and t slip, we’re competitively placed to lead in this disease. And through our license agreement with Hengri, we’re now adding a novel potential best in class p g three four inhibitor, addressing gaps in the treatment of patients who face continued dyspnea or who are unlikely to receive inhaled corticosteroids or biologics because of their disease profile. Last but not least, the camelapixant COM one and COM two trials remain on track and will be reported together in 2026.
Next slide, please. In immunology, we’re extending our expertise in inflammation to understand how it leads to fibrosis in the lung, liver, and kidneys to treat, prevent, and stop disease progression. Fibrotic diseases are thought to account forty five percent of all deaths worldwide, so
Call Moderator, GSK: there’s
Tony Wood, Chief Scientific Officer, GSK: a major unmet need here. These conditions are typically seen as difficult to treat, but our work in human genetics and phenotyping combined with emerging platform technologies, including oligonucleotides, which have a unique ability to modulate gene expression in the liver, is showing real promise. As a result, we now have a growing hepatology pipeline with assets to treat chronic hepatitis B as well as steatotic liver disease or SLD starting in metabolic dysfunction associated steatohepatitis or MAH and alcohol associated liver disease or ALD. Let’s start with hepatitis B, a considerable market opportunity with large unmet need and limited standard of care. With piperaversin, an oligonucleotide, we have an exciting opportunity for a functional cure.
Promising data from the phase two b clear and b sure studies demonstrates sustained loss of hep b surface antigen below the level of quantification. Importantly, new insights from recent epidemiological studies have shown that loss of surface antigen reduces all cause mortality by up to sixty two percent and the risk of developing liver cancer by up to eighty nine percent in HBV patients. We expect to present additional follow-up data from B. Scherer at AASLD later this year. Our phase three b well trial continues apace with data expected in the 2026.
I’m also delighted to share that the b united phase two study has completed recruitment four months ahead of schedule. This trial is looking at sequential administration of daplisiran and tomligosiran followed by bepi, which will read out in 2027. If positive, it will significantly expand the patient population who could benefit from treatment. As already highlighted, we’re also excited to complete the acquisition of of emphysemafiramine or Effie. This adds another phase three ready potential best in class medicine to our pipeline.
Effie is a once monthly FGF21 analog with phase two data which demonstrates its potential to reverse liver fibrosis in mash. We plan to start phase three trials in mash later this year with plans for further development in ALD. And of course development of GSK nine ninety, our siRNA therapeutic continues for other subsets of patients with SLD. We see these two assets as complementary, providing options to develop both monotherapies and combinations. Let’s turn to oncology now.
Next slide, please. Here, our momentum continues, and we’re rapidly expanding beyond our current focus in hematological and gynecological cancers to treat additional solid tumors. On Blenrep, as Emma has said, the new PDUFA date is the 10/23/2025, providing the FDA with time to review additional information provided in support of the application. We’re in constructive discussions with the FDA. And while I know you’ll want more details, the review process remains confidential, and so I’ll update you when we can.
Outside The US, we’ve already received regulatory approvals from Europe, Japan, Canada, The UK, and Switzerland, all pointing to the positive impact this medicine can have for patients with multiple myeloma. Elsewhere in the portfolio, we’re progressing multiple development programs. Last year, Gempelli was expanded to all adult patients with primary advanced or recurrent endometrial cancer as the first and only immuno oncology based treatment to show an overall survival benefit in these indications. Initial results from the ASIO-one trial in rectal cancer are expected in 2026 with the phase three JADE study in locally advanced head and neck cancer also ongoing. For Aajara, studies are underway to expand the label into MDS and additional indications are also in planning.
We have a high ambition for our new ADC portfolio. And given the significant potential we see here, we’re prioritizing investment.
GSK: We are
Tony Wood, Chief Scientific Officer, GSK: developing GSK 227, our B7 H3 ADC in lung cancer and evaluating other solid tumors. We’ve already received two breakthrough designations from the FDA in relapsed or refractory extensive stage small cell lung cancer and in late line relapsed or refractory osteosarcoma. Early combination data with PD L1 indicates the potential for a chemo free regimen in first line small cell lung cancer with more mature data expected in November. And we are on track to start a pivotal study before the end of the year. For GSK584, our B7 H4 ADC will start pivotal studies early next year.
Lastly, earlier this year, we entered into an agreement to acquire IDRX42, a highly selective KIT inhibitor being developed as a first and second line therapy for treatment of gastrointestinal stromal tumors or GIST. IDRX42, now GSK981, has demonstrated activity against all key primary and secondary KIT mutations observed in GIST. This breadth of coverage, in addition to high selectivity, which could provide improved tolerability, offers a potential best in class profile. We’ll start recruitment for a pivotal study in second line before year end. Next slide, please.
Within infectious diseases, we’re developing prevention and treatment options with broad coverage. Two of our recent FDA approvals exemplify this. Penmenvi, our pentavalent meningococcal vaccine, offers more strain coverage, enabling high protection from the serious consequences of infection to more teens and young adults. And Bligepa is the first new class of antibiotic in over thirty years for the treatment of uncomplicated UTIs, a condition that affects fifty percent of all women. We’re also making progress with other ID assets.
Our phase three trial for tebipenem in treatment of complicated UTIs was stopped early for efficacy. Orexi received a positive ACIP recommendation, expanding its use to adults aged 50 to 59. And with Shingrix, we’re now researching this vaccine’s potential for use beyond shingles. Given the increasing number of real world evidence studies showing a potential protective effect in dementia, we’ve initiated several research collaborations to explore this effect prospectively. These include a first of its kind large scale linkage study with the UK Dementia Research Institute and Health Data Research UK.
Of course, development work in HIV is also a clear priority, and you’ll hear more from Deborah on this shortly. Next slide, please. I’m pleased with the strong momentum and material progress we’re making in R and D. I believe we have more and better opportunities with 66 assets in full clinical development, 16 currently in late stage, and eight regulatory breakthrough designations already this year. Our deepening expertise in immunology, use of advanced technologies, and world class partnerships are delivering results.
We’ve had three FDA approvals so far this year and remain on track for two more. Adding to a record 13 positive phase three readouts in 2024, we expect another 15 readouts through 2025 and 2026. And for the remainder of this year, we’ll start pivotal studies for four assets. Two of these are in oncology with our b seven h three ADC in extensive stage small cell lung cancer and IDRX forty two in second line GIST. In hepatology, we’ll start a fimisfirmin in NASH and in HIV, a pivotal study for our q four m ultra long acting treatment regimen.
Overall, have a clear path to extend our leadership in respiratory, exciting new prospects in immunology and inflammation, and momentum in oncology, alongside major pipeline opportunities to come in infectious disease and HIV. Next slide, please. To finish, I’ll go back to where I started with our focus on a best in class pipeline in areas of huge unmet need, which you can see here, and where we’re making an important difference to the health of billions of people. With that, I’ll hand over to Luke.
Luke Miles, CFO, GSK: Thanks, Tony. Please turn to the next slide. In q two, we delivered £8,000,000,000 in sales, up 6% versus last year, demonstrating strong execution and demand driven growth. Growth in the quarter was driven by specialty medicines, up 15%, and strong Shingrix and meningitis demand in Europe, with some offset driven by the expected impact of the Medicare Part D redesign across the portfolio, which is tracking as expected. Next slide, please.
Specialty medicines continues to be the most important driver of our diversified business with double digit growth once again in all therapy areas. Starting with RII, sales were up 10% even with the expected tough comparatives for Nucala and Benlysta, and this was driven by strong demand. Benlysta, our treatment for lupus, grew 13% and is now positioned as a preferred therapy in all global guidelines. And in the quarter, EULA also updated their recommendation for use of Benlysta up to three years following remission. And Nucala, our anti IL five biologic, grew 7%, in line with expectations following an inventory build in 2024 and the impact of Medicare part d redesign, both offset by a strong performance in Europe and international.
We are very pleased with the label we have in COPD, which I’ll cover in a minute. Moving to our growing oncology portfolio, which was up 42%, Gempelli for endometrial cancer continues to see increasing patient demand and growing market share in both DMMR and MMRP populations following our all comers approval in The US and Europe, up 91% in the quarter. And Adjara sales were up 69% driven by strong US volume growth, including growing demand from moderate anemic patients that represent sixty five percent of the market opportunity. And Blendrep had its first sales in second line multiple myeloma following early launch days in The UK, and more on that in a minute. With this strong momentum and the great performance from Viveve that Deborah will cover, we are increasing our full year specialty guidance now expected to grow in the low teens percentage.
Next slide, please. In respiratory, we’re very pleased with the strong label we received for Nucala and COPD. We now have an important opportunity to reach a wide spectrum of patients with a blood eosinophil count starting at one fifty cells per microliter, a key differentiator for our monthly biologic. The label also includes important data showing a thirty five percent reduction in hospitalizations from severe exacerbations, a high quality data point as we know that one in two patients hospitalized from COPD will die within five years and that these hospitalizations are responsible for seventy percent of all COPD related costs. We continue to look forward to the significant opportunity we have with depamokumab, our twice yearly I l five, which has been filed in all major markets for approval in severe asthma and nasal polyps.
Both are opportunities we expect will expand the market for biologics in this space. We’ve also had very positive market research, which shows eighty six percent of pulmonologists think DEPI could become standard of care, and eighty seven percent of patients said that they would be likely to use DEPI if supported by an HCP. And we look forward to a US FDA decision toward the end of the year. On Glenrep, we’re very confident in the opportunity for this important medicine and continue to emphasize the projected overall survival benefit of thirty three months compared to standard of care from Dream seven. Our premium coordination of care service has already been well received in The UK following approval and launch in April.
We’re also pleased to have received approval in Europe, Japan, Canada, The UK, and Switzerland. And as you have heard from both Emma and Tony, we’re continuing to work with the FDA to bring this important medicine to American patients. I’ll now hand over to Deborah to cover HIV.
Deborah Waterhouse, Head of HIV Business, GSK: Thank you, Luke. Our HIV portfolio continues to deliver exceptional growth, up 12% in the quarter. Nine points of growth came from strong patient demand for our long acting injectables and Dovato. And three points came from customers’ stocking patterns and tender phasing. We saw demand grow across all regions and major markets, particularly The US, which grew 14% through double digit demand growth and where we saw not only total share gain outpacing the competition, but Cabanuva consistently gaining at least 70% of product switches from competitors.
Dovato continued to deliver strong performance up 23% and our long acting injectables Cabanuva and Aptitude delivered robust growth up 4650% respectively. With treatment accounting for 90% of the total 22,000,000,000 HIV market, we continue to drive the shift to long acting injectables. In Q2, Cabanuva and Aptitude delivered more than 70% of our total growth driven by The US where they now account for one third of sales. Focusing on long acting injectables for treatment, strong patient preference is reinforced by Volition, a Phase 3b study shared at the IAS conference this month, showing nearly ninety percent of newly diagnosed people chose to switch to Cabenuva from daily pills after achieving viral suppression. This medicine continues to transform the lives of more than ninety thousand people living with HIV.
Aperture saw strong growth in the quarter, and we expect it to continue to grow in h two in The US, bolstered by over three years of real world data demonstrating more than ninety nine percent effectiveness along with excellent safety and tolerability across broad populations. We have set a high bar for tolerability with aperture, given by one shot intramuscularly. This quarter we initiated the Phase one CLARITY study in healthy volunteers to evaluate the tolerability of a competitor long acting injectable against Apritude’s robust profile. We are very optimistic about the outcome and look forward to sharing data at an autumn conference. Given our strong and sustained performance today, we are adjusting our 2025 HIV guidance upwards to mid to high single digit percentage growth.
Next slide, please. We continue to progress our industry leading pipeline with integrase inhibitors at the core and have multiple long acting options with strong profiles for Q4m, Q6m and self administered. Building on our established two monthly injectable regimens we believe four monthly dosing in PrEP and treatment will be important options, delivering longer dosing intervals and ensuring continuity of care. Our Q4 mPrep trial has recruited rapidly and is going well. The FDA have asked for an extra four months of data, which means the study will read out in H two twenty twenty six and we look forward to launching in H one twenty twenty seven.
At the launch of Q4M treatment we expect to have the only complete long acting injectable treatment regimens on the market for many years to come. Looking ahead to our twice yearly injectables we’re on track to confirm the dosing regimen for q six ms treatment in 2026 and expect to file and launch both q six ms for treatment and prep between 2028 and 02/1930. For treatment we are particularly excited about VH184, our third generation Insty, which has the best resistance profile seen to date and has the potential to be the backbone of our next generation of HIV treatment regimens with IP cover through at least the end of the next decade. We also continue to pursue potential cures for HIV. In July we initiated Entrance, a first time in human study featuring our PNab N6 LS with or without Fostenosavir, currently marketed as Recobia.
This work is at an early stage and we are pleased to bring our scientific expertise to this notoriously difficult area. With a ten year head start in long acting treatment we are focusing on the next generation of HIV innovation. We remain confident that our pipeline, including five planned launches by 02/1930, will continue to drive performance over the coming decade and beyond. With that, I will hand back to Luke.
Luke Miles, CFO, GSK: Thanks, Deborah. Turning to vaccines. Sales for q two were £2,100,000,000, up 9%, primarily driven by strong demand in Europe for Shingrix and our meningitis vaccines. Shingrix sales grew 6% in total as our global expansion strategy is delivering with 72% of our sales now coming from outside The US. Growth was driven by launches and national immunization approvals in countries like France and Japan, and we remain confident in the ex US opportunity.
Starting in Europe, Shingrix sales were up 48% led by swift uptake in France and strong demand across several countries, including Spain, The Netherlands, Italy, and Greece. In The US, penetration is now 42% of the eligible older adult population achieved in about half the time it took for older adult pneumococcal vaccines. And with, harder to reach patients, the immunization rates have slowed as expected. And in international, accelerated uptake in Japan following expanded public funding in April was offset by tough q two twenty twenty four comparator, which included supply to our co promotion partner in China and a rapid uptake in Australia. In meningitis, our portfolio was up 22% with strong double digit growth across Europe and international driven primarily by Bexero, the only MenB indicator for infants.
In The US where we have dominant leadership in the MenB adolescent market, we’re excited to introduce our pentavalent vaccine, Penmenvi. We expect this vaccine to simplify immunization schedules and contribute to increasing coverage and protection against serious life threatening illness. Turning to RSV. Obviously, we are preseason, but Orexfi sales, increased 13%, maintaining market leadership in The US older adult segment and benefiting from strong uptake in Germany. In The US, we’re also pleased to see that earlier this month, the CDC confirmed the ACIP recommendation for adults aged 50 to 59 at increased risk.
In the current vaccines environment, we continue to expect this market will take time to build, But with our strong clinical profile in the most vulnerable populations, we remain confident long term in the importance of this vaccine. And finally, our broad portfolio of established vaccines grew 6% primarily due to favorable CDC stockpile movements for Infraredx PDRX in The US. Overall, our vaccines business is performing well amidst a challenging external environment. And driven by the good half one performance, we are increasing our outlook for vaccine sales today to decline low single digit to stable, and we remain confident in the medium and long term prospects of this business and pipeline. Next slide, please.
Turning to general medicines, which was down 6% as expected following a very tough comparative for Trelegy in q two of last year. As you may remember, Trelegy was up 41% in q two twenty four due in large part to significant adjustments in returns and rebates. This quarter, Trelegy grew 1% in The US and 4% globally despite the tough comp and pricing headwinds from the Medicare part d redesign. Trelegy is now in its eighth year in the market, and we are continuing to see all time high shares with room to grow. Beyond Trelegy, the rest of the general medicines portfolio was down, reflecting continued generic competition across the portfolio and adjustments in rebates and returns as expected.
We continue to expect sales to be broadly stable in 2025 and look forward to the opportunity we have in adding anti infectives into this part of the business with the approval of Blue Jepper for uncomplicated urinary tract infections in The US, which we’ll launch later this year. We have also seen progress on tebipenem, as Tony highlighted, an important oral option to keep complicated urinary tract infection patients at a hospital. I’ll now hand over to Julie.
Julie Brown, Finance Director, GSK: Thank you, Luke, and good afternoon, everyone. Next slide, please. Starting with the income statement for the quarter with growth rates stated at CER. GSK continues to build momentum in 2025 with sales increasing 6%, driven by continued strong specialty performance complemented by growth in vaccines. Cost of sales for the quarter grew 7% ahead of sales due to pricing impacts and supply chain optimization charges.
Core operating profit grew 12 with strong leverage in the quarter delivered through a 1% reduction in SG and A, demonstrating our disciplined returns based approach and a 70% increase in royalties due to the upfront receipt from the IP settlement announced in April. Core EPS grew 15%, continuing to demonstrate our track record of delivering margin leverage and enhanced by lower interest charges as well as the share buyback. Turning to total results, growth of 33% was largely driven by a favorable Veeve CCL movement predominantly due to currency, partially offset by intangible asset impairments. Next slide, please. This chart illustrates the margin improvement year on year.
The operating margin improved in the quarter by 180 basis points, driven by SG and A and royalties. Whilst we continue to invest competitively behind product launches, SG and A improved the margin by 190 bps due to phasing between the quarters and accelerated productivity improvements. As I mentioned, royalties were driven by the RSV IP settlement, the income from which is being reinvested in R and D this year with priority projects accelerating this quarter. Finally, whilst the portfolio and margin continue to benefit from the transition towards specialty, The Q2 fall in the gross margin was predominantly driven by lower RAR benefits year on year and by charges associated with supply chain optimization. Next slide, please.
Turning to the cash flow with commentary before the one off impacts of Zantac payments. Cash generated from operations was £3,900,000,000 at the half, improving by more than a billion and demonstrating our continued focus on cash discipline as we remain on track for more than 10,000,000,000 CGFO in 2026. The improvement year to date is driven by increased operating profit and favorable movements in RAR, partially offset by increased working capital, driven by higher OREX fee and Shingrix collections last year. Free cash flow improved by £1,300,000,000 driven by strong CGFO and the favorable phasing of tax payments. Zantac payments so far this year have totaled £124,000,000 and we expect the remaining 1,100,000,000.0 to be paid through the second half.
Next slide, please. Turning to capital allocation. We continue to deploy cash in a disciplined manner and underpinned by a strong balance sheet in line with our framework. Our net debt to core EBITDA remains broadly aligned with this time last year. Our priority is always to invest for growth, evidenced by the increasing investment in R and D together with the ongoing BD.
In the first half, we had outflows relating to a number of deals, including the acquisition of IDRX, and we will continue to look for opportunities, particularly in specialty, consistent with the size and frequency of recent deals. We have also made over £2,000,000,000 in shareholder distributions in the first half through the dividend and share buyback program, which is progressing at pace with more than 800,000,000 executed so far and with a total of 1,300,000,000.0 expected to be completed by the end of the year. Please note, in the second half, net debt is expected to include almost £3,000,000,000 of outflows relating to the settlement of Zantac, the completion of Efemis Fermin and the Hengrui collaboration together with the ongoing share buyback. Next slide, please. GSK’s momentum continues to build, and we are pleased with the performance this year.
We now expect to deliver towards the top end of our guidance ranges on sales operating profit and EPS, and we are adjusting our full year guidance for specialty, HIV and vaccines upwards. Regarding our 2025 P and L guidance, in line with our capital allocation priorities, we expect gross margin to benefit from product mix for the full year. We are accelerating investment in the pipeline and now expect r and d to grow ahead of sales. We also remain committed to a low single digit percentage growth in SG and A for the full year. Whilst there will be a step up in investment in q three behind our upcoming launches, We will also see an acceleration of SG and A productivity initiatives with the associated charges and benefits in the remainder of the year.
And finally, net interest expense is now expected to be lower than previously guided at $550,000,000 to £600,000,000 due to the later phasing of Zantac payments. Our guidance is inclusive of tariffs enacted thus far and the European tariffs indicated this week. Obviously more details are set to follow, but as we’ve said previously, we are positioned to respond with mitigation actions identified and confirm our guidance towards the top end of the range this year. Looking beyond, we remain very confident in our medium and longer term outlooks to 2026 and ’31. Next slide, please.
Moving to our roadmap, which illustrates our progress towards major milestones and upcoming value unlocks. We have made good progress through the first half on our priority assets. Looking forward, we expect this momentum to accelerate. We continue to plan for launches in half two with Glenrep, Bluejepa, and Penmenvi, adding to Nucala COPD. The FDA regulatory decision for Depamucumab is due in December.
And of the 14 scale opportunities that Emma mentioned, we will have pivotal trial readouts related to six of these over the coming eighteen months. And with that, I will hand back to Emma to close.
Emma Walmsley, CEO, GSK: Thanks, Julie. To summarize, our results today confirm GSK’s continued strong momentum and meaningful r and d progress for patients and for shareholders. Our portfolio is demonstrating quality and strength, and we now expect to be towards the top end of our financial guidance for 2025. Looking beyond, we’re excited by the prospects in our pipeline and remain highly confident in our long term outlooks. With that, I’ll now open up the call for Q and A with all the team.
Call Moderator, GSK: Thank you, Emma. I would like to remind everyone to please raise their hand to ask a question. First question comes from Simon Baker. Please go ahead, Simon. Simon, you have been unmuted and you can speak.
Yes.
Simon Baker, Analyst: You hear me now, Constantine?
Emma Walmsley, CEO, GSK: Yes. We can hear you. Thank
Simon Baker, Analyst: you. Apologies for that. Yeah, two questions if I may please. Firstly, just a clarification on Camlopixant. Tony, you said they would both report in 2026.
Slide 32 is still showing CALM-one readout in h two twenty five. So when you said report, do you mean the full data and we will still get a KALM-one headline press release in 2025? And then the second question was was related to to Blendrep. We, like you, are assuming this this is simply a a potential delay rather than anything else. So I just wanted to get your thoughts on what impact that has, firstly, on 2031 and the composition of the 40,000,000,000, if those Glenrep revenues are pushed out slightly.
And also what it means for 2028, where the contribution from Glenrep now looks like it will be smaller and therefore the impact from the Dolateg Revere patent expiry will be greater. Just how that what the magnitude of that is and also how that influences your m and a plans going forward? Thanks so much.
Emma Walmsley, CEO, GSK: Thanks. Well, I’ll ask Tony in a second just to comment quickly on on Camnapixon. But to be really clear, Simon, we are very pleased to have an updated PDUFA date in October. There is absolutely no change to our expectations around the ramp of Glenrat. We’re really pleased with the we’re hoping to get into more than 10 markets actually by the end of this year.
We’re working hard and constructively with the FDA to be able to bring this to American patients too. So no change and fully confident in our whether it’s our 28 outlooks or our 31 outlooks. And as you know, we keep adding to them with new prospects and ongoing BD. And specifically on your question on BD, you know, it’s quite exciting to me that three of the four pivotal trials that are starting later this year are whether it’s on Effie or IDRX or, you know, our next gen of ADCs are from, you know, a great BD that we brought in. Of course, we announced Hengrui this week, which is a really strategic play to accelerate early stage research and with a headline assets, which might be best in class on the p d three fours for COPD as well.
So lots going on in BD, and and, you know, we’ll continue at the kind of pace and scale we have been, but, you know, no update at all except for reiterated confidence in terms of our outlooks and plans to add to them. Tony, anything you want to say on Cambly?
Tony Wood, Chief Scientific Officer, GSK: Yes. Simon, thanks for the question. And just as an update and clarifying here. As I said before, KALM-two is still recruiting. We’re anticipating data in mid year twenty twenty six.
You’ll also appreciate that typically we only disclose Phase III studies involving two studies once both are completed. And so the formal disclosure associated with COM1 and COM2 will be in line with the COM2 schedule.
Emma Walmsley, CEO, GSK: Right. Thank you. Next question, please.
Call Moderator, GSK: Next question comes from James Gordon from JPMorgan. James, please go ahead.
James Gordon, Analyst, JPMorgan: Hello, James Gordon, JPMorgan. Thanks for taking the questions. First question was also on Glenmark. So a busy few weeks with the ODAC, then it sounds like subsequent data added after the ODAC, and then some personnel changes to that FDA with Ben A. Pussard leaving.
But so without asking what extra data is, just what is GSK’s latest confidence in getting Blendrep approved in the in The US this year? And, if is how important is PlanRep US in keeping the margin flat through HIV LOA starting in ’28? So if you didn’t have US PlanRep, would you still be able to keep the margin flat? That that’s the first question, please. And then the the second question, the p d e three four looks interesting from the Hengru deal.
So I think Merck pays on, like, $10,000,000,000 to get Verona’s p d e three four, but that is already on the market. And you’re paying about £500,000,000, but it’s quite a bit earlier. So is the key differentiation that yours is DPI and theirs is nebulizer? Or or are there other areas where it’s differentiated and you’re only paying about 5% what Merck did? So is it just how far you are from market?
It looks like a very good deal, but it depends how differentiated it is.
Emma Walmsley, CEO, GSK: Well, we we definitely agree it’s a very good deal. And, yeah, the market deals is not how much you spend. It’s the kind of returns you can get. And we do believe we have a potentially best in class asset here in a field we know a lot about and adding to that COPD portfolio. I mean, I think there are about seven questions in that.
But in your in your first point on Glenroe, and just for everybody, I as Tony said, we know you’ve got a lot of questions about that, but we hope everybody on the call understands how much we are committed to respecting the confidentiality of this process. We are in constructive dialogue. We have high confidence in our data. We’re answering questions and, you know, adding more to that, and we’ll update you when we can. And just to reiterate, we don’t subsegment our peak year sales by country, obviously.
The US is important, but we’re really pleased to have added by the way, since the ODAC, the across the board Europe approval, the Canada approval to The UK, to Japan. And you can rest assured that Luke is ramping up for launch preparations, of course, going slow to go big. And, you know, is without doubt an important medicine. We are working towards The US approval. We wanna bring this for American patients.
When you think of this overall survival data in a head to head study against the standard of care, when you think that seventy percent of myeloma patients are in communities, and this is a medicine that allows people to be treated in in in communities. So it will keep the conversation going there. I’ll see whether Tony wants to add anything at all. He’s shaking his head. Anything you wanna say?
Tony Wood, Chief Scientific Officer, GSK: Just just simply, again, to emphasize that, obviously, we’re in constructive dialogue, but we want to respect the confidentiality of that interaction. I’ll update you as soon as I can.
Emma Walmsley, CEO, GSK: Great. Thanks. And just because we want to get through as many questions as possible, I would respectfully suggest that we’re not going to go much further than that on Blendrep today. Next question, please.
Luke Miles, CFO, GSK: You wanna do the three?
Emma Walmsley, CEO, GSK: Oh, sorry. The three, four. Yes. Tony, maybe Luke could be good because I know
Luke Miles, CFO, GSK: you cover why you like the profile, and I can Yeah.
GSK: I’ll I’ll
Tony Wood, Chief Scientific Officer, GSK: I’ll start with why I like the collaboration, full stop, because the 500,000,000 is also dedicated towards options to the other 11 innovative potential medicines that we have covering our I and I and and oncology. Let me just describe the the the profile of the of of the molecule itself. I I would describe it in terms of its p d three four balance as being similar to Verona. That’s important because it means that we can be confident in the efficacy and safety profile of the molecule. Whilst it’s similar in balance, it’s about twofold more potent across that and has demonstrated both clinically and pre clinically both bronchodilation and anti inflammatory effects.
That reduction in dose is important when one considers the optionality for a DPI. And as Emma said, we have an extensive experience there based on our own DPI portfolio. And I’m looking forward to developing that molecule in partnership. And we see potential really across the gold framework as an add on therapy. Luke, you want to add a bit more to that?
Luke Miles, CFO, GSK: Yeah. Mean, we’ve obviously looked at this class for a while for a couple of years now. We like it. And I think the initial uptake is pretty clear. I think about fifty percent of the use is in very severe patients on top of standard of care triple, etcetera.
But I think there will be a threshold where nebulization and the price starts to retard let’s our hypothesis anyway, starts to retard things. So an alternative, you know, classical delivery approach, which is very synergistic with the rest of the portfolio is exciting. Then the final thing I’d say is it it’s a good sign for COPD and Newcala and COPD because clearly there’s an appetite for new mechanisms in particularly the more severe COPD population.
Emma Walmsley, CEO, GSK: Yeah. I mean and we’re really, you know, pleased with the agility, frankly, aggression we’ve been showing on partnering for BD out of assets out of China, whether it’s the ADC deal we did or the long acting t slip or now adding this. And, of course, you know, some great science. We all know what’s happening in the biotech industry there, but then that we can pick up partnering and then rolling through our Internet or global ex China clinical network and,
Call Moderator, GSK: of course, manufacturing, if that’s successful. Next question, please. The next question comes from Michael Leuchten from Jefferies. Please go ahead, Michael.
GSK: Thank you for taking my questions. Two, please. One for Julie and one for Luke. Julie, your talk to the supply chain costs hitting COGS in the second quarter and then your slides say you expect the gross margin to benefit from product mix, but it doesn’t say the gross margin is going go up. Can you just clarify what those costs might mean for the second half, whether relevant or not?
And a question for Luke. Nicola, COPD, you’ve got 500,000,000 peak sales on the slide now. I thought in the past you talked to five zero two billion pounds I might be wrong, but have your expectations come down for that relative to previous communication? Thank you.
Emma Walmsley, CEO, GSK: Definitely not, I’ll say before Luke answers your question. And Julie, do you want to talk about gross margin? Recognizing, remember that we have included in our guidance, not only those enacted, but those indicated in terms of tariffs. So as that settles out with a bit more details to come, we’ll have more specificity. Julie, do want to pick up on gross margin and
Julie Brown, Finance Director, GSK: then Luke? Yeah. Sure. Thank you very much for the question. So in terms of gross margin, we do anticipate some accretion this year.
As you know, we took a charge for supply chain efficiencies in q four of last year of a $150,150,000,000. So we will be comping that coming up with the fourth quarter. But, nevertheless, the the big point is that the specialty growth, which is very considerable, is driving an improvement in our gross margin. If all all else was equal, you would see that coming through. What you see is causing some turbulence in the gross margin is one, supply chain optimization charges are going through.
And then the second one, as Emma just alluded to, is tariffs. Obviously, we haven’t had any tariffs in the first half. We are anticipating some coming in the second half, and that will lower the gross margin slightly. But even with the ones that have either been announced or indicated, we still see the opportunity for gross margin accretion coming through mix. Right.
Thanks. Luke, so happy to Yeah.
Luke Miles, CFO, GSK: Thanks, Michael. Look, I think 500 is fair, but, of course, we are going to aim above that. If I if I look at, you know, initial signs, we’re already ahead of where Dupixent was at the same point in its launch with new patient starts. So it’s a good sign. We don’t I mean, the lead indicators are positive.
So physicians clearly like the reduction in hospitalization and ED department visits, and that certainly resonates with them. We’re also interestingly winning in terms of the perception in the lower EOS patient as well, which is sort of naturally historically Dupi’s hunting ground, which is encouraging. And if you look at the market research, we’ve got, again, early days, but sixty seven percent of pulmonologists say they’re likely to prescribe Yukala and COPD and prefer it versus only thirty percent with Dupixent. And, you know, really good execution so far. We’ve seen ninety one percent of our key customers with a really good frequency.
So bang on there. I think balancing that back to your question is, you know, pulmonologists historically have have not been, you know, as aggressive as maybe the evidence would would support in terms of biologic penetration. So once we get more robust numbers, which will be, you know, IQVIA, the the quant the lag indicators, we’ll have a better picture, but I think it’s a good start. We’ll give you a fuller update in q three when we’ve got data, which, of course, is, you know, what crown counts, you know, comp over comp.
Emma Walmsley, CEO, GSK: And, you know, the only other thing I’d say on this one is what we’re aiming to do is be indisputable leaders in COPD medicines. That is the strategy that Tony has laid out with a comprehensive portfolio that we’ve added to, to be able to sub segment and treat this enormous burden of disease. You know, more than three hundred million people, third leading cause of death, seventy percent, as Luke said, of the costs related to COPD are hospitalization. Nucala is the only medicine with a demonstrated thirty five percent reduction in hospitalization. Tony confirmed the start of the DEPI COPD trial.
So one of the things that might contain over time the PKS sales of Nucala is bringing a six monthly IL-five to COPD. And then, of course, we’ve got the long act. We’ve got the whole portfolio of assets that we’ve already started talking about. So exciting start. I think we’ve confirmed and reiterated GBP $05,000,000,000 for this one, but let’s see
Call Moderator, GSK: how it goes. Next question, please. Next question comes from Sachin Jain from Bank of America. Sachin, please go ahead.
Sachin Jain, Analyst, Bank of America: Thanks for taking my questions. I’ve got two or three product ones, please. So firstly, the same vein on DEPI. Luke, wonder if you could just give us a better sense of launch. So is there anything about market expansion, new color cannibalization switches from competition?
And I guess specifically consensus is only €200,000,000 for next year, which seems conservative relative to the launch you potentially described. Secondly, on Shingrix, I wonder if you could talk about continuation of the ex U. S. Trends and how much of those European launches potentially boluses versus continuing? And third, I will apologize, but I will try my arm once on Glenrep.
Just want to understand why the data you’ve submitted, you wouldn’t have used as part of the AdCom debate if it was material enough to shift the debate you knew was coming? Thank you.
Emma Walmsley, CEO, GSK: Sorry. I didn’t, it wasn’t on purpose, but I didn’t actually hear the third question on Glenrep. Could you repeat it?
Sachin Jain, Analyst, Bank of America: Why data that you’ve submitted, you wouldn’t have used as part of the AdCom debate if it’s material enough to shift the FDA’s view on a debate that you knew was coming given you get the briefing documents well ahead of the actual AdCom? Thanks.
Emma Walmsley, CEO, GSK: Yeah. We’re we’re not gonna comment on that. So good try. But but, Luke, would you like to answer the first two questions on ambitions around DEPE and and Shingrix curves? Thanks.
Luke Miles, CFO, GSK: And welcome back, Sachin. Yeah. Look Look. I think I’m gonna be, you know, a lot of excitement. I think for anyone that’s attended an academic meeting with the data’s been presented, I think there’s a lot of enthusiasm here, and I’ll quote some numbers for the market research.
Inside, of course, the track record of this team with Nucala and execution full stop is very good. There’s a high excitement there. I think with physicians, there’s also high anticipation. You know, we’ve got really robust data here in controlled studies, and I think most people can can can see that efficacy, but also have the imagination to understand in the real environment with less supervision that data hopefully should improve, and we’ve got a program to to to capture that. Look.
I won’t go into the strategy and positioning, but, you know, the the the testing response is really clear. When we’ve taken that profile and that strategy to pulmonologist, analogist, 94% of them are motivated to prescribe a product. 70% think it’s more compelling than competitors, and eighty seven percent of patients I cited certainly prefer it if the HTP would recommend it. We’ve done other forms of market research. Again, eighty six percent of HTPs think it will be standard of care, and eighty two percent would consider prescribing it.
And that’s before the launch. Right? I mean, we don’t have a field force out there. This is this is very organic. Look.
The Biotene is 27 right now in severe asthma, around twelve percent nasal polyps. And I’ve I’ve quoted this before, but if you look at biologics at the end of twelve months, you’ve lost about sixty five percent of those patients. So, you know, a combination of in office administration, lower frequency of administration, a validated known target, excellent benefit risk profile. You know, I think it’s gonna be very exciting. We’ve also shown historically with Trelegy that we can target the competition without disrupting our own business too extensively.
So the hierarchy will be Dupixent first and and then for Senra, which makes sense. And the incentive scheme scheme in the organization, obviously, will drive that, and there’ll be limited points for switching switching you, Carla. So, yeah, very exciting there. If I if I go to Shingrix so continuation of ex US trend. I mean, yeah, if you look at what’s going on there, I mean, we like to do what we say we’re gonna do, and I think this is an example of that.
It’s not apples to apples, but because The US has a much broader coverage, you know, you’ve got coverage from fifty years plus versus EU markets in Japan and others where they have a higher age cut off. And even within countries and provinces, that can vary quite a bit. But, you know, The US is a steady client still. We’ve got 42%, so that’s in line with what we’ve said, three to 5% penetration a year. Germany, we’re about 26%.
We had a bit of a soft August last year, and we we a lot of work there, but we’ve worked out what what happened there, and we’re now back on a good growth trajectory using a strategy that we’re now employing in The US and and Japan. And this was based on the success we had in Australia where we’re approaching 40% penetration in that market. And that was really targeting comorbid patients promoting directly to specialists like cardiologists, allergists, rather than just a broad approach. If you look, you know, structurally, typically, if if you’ve got heavy funding, full funding, you’ve got penetrations which are changing and growing between, you know, 829%, not in not including The US Yeah. And growing.
If there’s limited funding like The UK, Spain, Italy, China, then you’ve got a penetration range around four to 8%, but also growing. And there is the opportunity, of course, to change that as we’ve seen in Japan. So Japan had limited funding. It’s now got much broader funding, and, actually, it’s a key driver for Shingrix over and above France. And then if it’s out of pocket, you’ve got penetration range of three to 4%.
So something to keep in mind for emerging markets. So, yeah, I I think there’s remaining potential outside The US. We’re still very focused on The US, but, hopefully, those numbers are helpful session and answered your question.
Emma Walmsley, CEO, GSK: Brilliant. Thanks. Next question, please.
Call Moderator, GSK: Next question comes from Kerry Hallfort from Berenberg. Kerry, please go ahead.
Emma Walmsley, CEO, GSK0: Thank you for taking my questions. And just maybe a broader U. S. Question here on any commentary you can give us more broadly on the discussions you’ve been having with the US administration on tariffs, but also in the context of MFN. How have those discussions evolved?
And how do you think the administration intends to balance those two items, introducing tariffs, offset and balancing that with the proposed plans to lower drug prices in The US. Any directional commentary you would be prepared to make at this point would be very helpful. And then secondly, also on this, the focus here in The US, the Trump administration has indicated support for DTC cash pay options for US patients. Clearly, this is being utilized with obesity today. Is the DTC route to market a route that you would consider in The US?
And if so, which drugs within your portfolio might best fit that approach? Thank you.
Emma Walmsley, CEO, GSK: Yes. Thanks. So look, first, in terms of tariffs, as we’ve said, we’ve included in our outlooks, not only those that are enacted, but those indicated. But it is important to reiterate that we’re waiting on the two three two investigation and the sort of specifics of that still need to become clearer. I think it would be fair to say that, you know, you always have to separate from the headlines to the reality of what’s delivered.
And, you know, whilst on the one hand, we’re now seeing numbers and indications that perhaps are not as high as in the first run of this. On the other hand, it is very, very real in terms of focused on U. S. Manufacturing and sourcing. Now the really good news for GSK, as I said last quarter, is we are well positioned on this.
It’s you know, since I started in this job, we prioritized together as a leadership team in The US. We’ve taken the business from being less than 40% to being more than 50% of the company now. And in fact, specialty business, which is where the pipeline is focused and the innovation is focused and the growth focus is two thirds of that so far this year is in The U. S. So we’re well positioned for that.
We’re well positioned manufacturing. We broke ground on another new factory. Some of the supply chain optimizations Julie referred to is also setting up some certain shifts of some of our production. So look, we’ll continue to be agile around it, but I’d I’d whilst we’d rather spend any incremental costs more on the pipeline. And as you know, we prioritize spending on R and D, and we’re pleased to be increasing that ahead of top line again this year.
We think we’re positioned well to find solutions as this evolves. On MFN, still very much moving around. But I think alongside others, yes, we’re in discussions. Yes. We really want to prioritize keeping The US as the best market for innovation and also to deploy access to innovation and to make sure that we’re passing on discounts given to patients so that medicines are sustainably affordable.
We also would like to see more countries investing in medicines, which is such a small fraction of the total cost of health care. And that’s why our pipeline is really important here because so many of the examples we’ve talked to you about are cost sparing, whether it is COPD or frankly, fact that can be community administered rather than, you know, long stay in in in hospital, whether it is the adherence of DEPI with that over seventy percent reduction or, of course, the best way to stop disease before it starts being vaccination. So, you know, we continue to have that dialogue, and, you know, we will update you alongside others, no doubt, as it becomes clearer. And and, yes, I do think they are all interlinked alongside trade discussions. And on DTC, that’s definitely part of the things we’re being open to.
But maybe I’ll ask Luke to comment on how we see some differences in the port portfolio around that.
Luke Miles, CFO, GSK: Yeah. Yeah. Thanks, Carrie. I mean, I think the first thing is the price has to be lower, then someone can get it through their own program, their insurance program. And then secondly, I mean, there are some products like Blue Jeopard that could be amenable to that.
We’re looking more broadly at products like Trelegy, and we’ve got an open mind. There’s clearly an opportunity in certain sub patient segments. We’ve seen that, as you mentioned, with GLP ones. But I think it’s very much, as Emma said, a watching brief at this point, but we can move very quickly once things settle out. We know what the rules are.
Call Moderator, GSK: Thank you. Next question, please. Next question comes from Matthew Weston from UBS. Matthew, please go ahead.
Emma Walmsley, CEO, GSK1: Thank you. Hopefully, you can hear me. One quick comment and then two questions, if I can. The quick comment is just to actually say, Michael is right. The GSK Respiratory Investor Deep Dive Event, Nucala COPD, PET sales was 500 to 1,000,000,000.
But anyway, we take your comments. Two public questions if I can. Camelopexent. Tony, the Calm one program does seem to be rolling back in terms of timeline now ’26. If we’ve got such unmet need in chronic cough, clear efficacy, what’s holding patients and physicians back from signing up to the trial, or are we wrong?
We just had the timing too early. And then secondly, I am gonna chance my arm, Blendrep.
Julie Brown, Finance Director, GSK: Go for it.
Emma Walmsley, CEO, GSK1: It’s just on study design of the existing studies, which are still ongoing. Have you decided to change any protocols, recruit more US patients, or optimize anything in light of what you heard at the AdCom? So
Emma Walmsley, CEO, GSK: I’m not sure there is gonna be much to add on on Blendrat for the reasons But Tony, if you want to add anything at all, please go ahead, and then perhaps you can answer on. I will just say there is no change to a level of ambition on the new carload COPD. But Tony, do you want to
Tony Wood, Chief Scientific Officer, GSK: Just simply in general on recruitment in forward looking on oncology studies where we have we’re enacting extensive plans to ensure that we have greater US representation going forward. In the case of the studies we have conducted, they were not atypical with representation in myeloma studies and we were careful to ensure that the outcomes and demographics we felt were consistent in European patients. But more importantly, going forward, we have an extensive focus on U. S. Representation.
Ben, just do you mind if I just run straight
Emma Walmsley, CEO, GSK: I think it’s worth clarifying this to people.
Tony Wood, Chief Scientific Officer, GSK: Yeah. And and and look. So first of all, there is nothing proving difficult about the canlopixin studies. We you will remember earlier I identified that in column two, we’ve been given the opportunity to add a larger proportion of higher frequency coffers into the study. That that is the group for which we feel the pharmacology is more likely to be representative.
And in addition, you’ll also recall that because of the difficulties that Merck encountered in the design recruitment and the features of the study, we are taking careful action to ensure that we have we have covered all of that both in terms of prescreening and and other features associated with, for example, the cough counter. As I said, calm two is proceeding on track as we planned. We are recruiting into the study right now. It is a six month completion. When we are closer to full recruitment into that, I will know more about the precise date that we are on track for middle of next year.
And as I said to Simon, we will as we typically do with our phase three studies, so we where we have two studies ongoing, combine both results into the analysis before the submission. So there is nothing behind that in terms of any difficulties associated with the study other than the plan that we’ve already described, which is ensuring that what we see as being the unique profile that canlopixib offers both in terms of its efficacy. And I’ll remind you in the SOOTH study, we saw a thirty four percent reduction in cough frequency relative to placebo and in terms of its selectivity profile, which in simple terms is about 10 times better than gefapixant and is therefore likely to result in fewer dropouts and will certainly not unblame the study.
Call Moderator, GSK: Right. Next question, please. Next question comes from Peter Verdalt from BNP Paribas. Peter, please go ahead.
Emma Walmsley, CEO, GSK2: Yeah. Thanks, Constantine. Peter Verdalt, BNP. Just two quick ones for you, Tony. Just following up from from Matt’s.
I hear your comments about adequate US trial representation in your key programs, but just a just a a factual question. When we checked Dream ten first line study, there are no US sites. Now I know we can’t talk about Glenrep. I respect that. But it’s a factual question.
Am I correct in that assumption that there are no US sites currently for Dream 10? And then secondly, on the Hangry deal, after PD three four, is there any other assets you can call out at this stage that might be entering the clinic in the next twelve to eighteen months? Or do we need to be little more patient? Thank you.
Tony Wood, Chief Scientific Officer, GSK: Yeah. Let me just quickly deal with Dream 10. You’re right. On clinicaltrials.gov, it doesn’t show our activities to recruit U. S.
Patients at this current point of time. But as I’ve said, we have extensive studies that we’re enacting that will increase U. S. Patient recruitment, not just for DreamTend, but more broadly across the portfolio, including the new ADCs. And then, sorry, secondly, remind me of the second question.
And, Rui, yeah, look, we in in signing the deal, we contemplated the first four or five of potential options. There is but I’m not going to disclose those in any more detail at this stage.
Emma Walmsley, CEO, GSK: The key is they’re all in areas that are core to you know, it’s good core therapy areas for for expansion for us, and we’ll keep you updated as we roll those through.
Luke Miles, CFO, GSK: And some of them will definitely be in the clinic next year. Definitely.
Call Moderator, GSK: Next question comes from Rajan Sharma from Goldman Sachs. Rajan, please go ahead.
Emma Walmsley, CEO, GSK3: Hi. Thanks for taking my questions. So just wanted to get an update on Blue Jeopard’s launch. So I think it was approved back in March, but it doesn’t look like it’s launched yet. So it’d be helpful to just understand timelines there.
And then expectations in terms of the launch trajectory given that you’ve, I think, previously guided to more than £2,000,000,000 peak sales for that new anti infectives portfolio. And then obviously based on the commentary, it looks like R and D expenses will be higher than previous guidance. Could you just help us understand what the drivers are? It doesn’t look like there’s any kind of materially large new trials that are kicking off in the in the second half of the year and maybe a couple of rolling off. So that would be helpful there.
Thank you.
Emma Walmsley, CEO, GSK: Yeah. Julie, maybe you’ll do that because we did have four big ones, big pivotals kicking off second half. And then Luke, I mean, that we’ll comment on Bluejack. We did say at the last quarter that because of formulary timing, we’re, you know, gonna be a bit later with that launch, and it is a full portfolio of anti infectives, but one we’re very ambitious for a long time since anyone brought any new antibiotics. But so Julie first and then Luke, please.
Julie Brown, Finance Director, GSK: Yeah. Thank you. So the main r and d areas, we we sat down as a team and looked at the areas we wanted to accelerate. And, clearly, one of the main areas is the ADC portfolio, I think, as Tony’s covered. We’ve got a large number of solid tumor opportunities with b seven h three, which we are looking into to accelerate considerably this year and into next year.
And then as Emma mentioned, we’ve got four pivotals now going through, three of which are BD orientated or sourced, and one is our own. So those are the main areas. Tony, do you want to answer that?
Tony Wood, Chief Scientific Officer, GSK: No. That’s complete. It’s it’s it’s four new phase three studies in the ADC portfolio expansion.
Emma Walmsley, CEO, GSK: Right.
Luke Miles, CFO, GSK: Luke? Yeah. Thanks, Rajan. So as Emma said, we’re talking to payers right now. Things should be more visible in q three with a full launch push in q one next year.
If you just look at patients, there are fifteen million episodes of uncomplicated UTIs in The US of which three million are individuals that are resistant to multiple classes or allergic to to three or more antibiotics. That’s the targeting population that we’ve got there. We just wanted to do a little bit more work on the pricing. And, also, we’ve had positive phase three results with tebipenem, which I think is also very attractive initially in in complicated UTI patients who typically are admitted for triaxone treatment. So this is the option of keeping those patients off the pump, keeping them at home with, you know, patient benefits as well as cost benefits in The US health health care system.
Emma Walmsley, CEO, GSK: Yeah. And and another trial stop for efficacy there. So excited to see what comes on. Question, please.
Call Moderator, GSK: The next question comes from Steve Scala from TD Cowen. Go ahead, please.
Emma Walmsley, CEO, GSK4: Thank you so much. A few questions. First, I’m curious about trends of Shingrix in China through the distributor. Are things improving, getting worse or somewhat or somewhere in between? Yesterday, Merck implied that there were no signs of improvement for Gardasil and issues could extend to 2026.
Is the same true for Shingrix? Secondly, can we have an update on the pneumococcal vaccine program? Will you initiate phase three in the 30 valent vaccine in adults? When do you intend to do that? Secondly, have you addressed the manufacturing issues for the pediatric vaccine?
And when does g GSK expect data readout for the 24 valent in infants? And then lastly, apologies, Blendrep. Does the recent FDA CBER leadership change alter the outlook in any way? The proximity of the news is quite curious. Thank you.
Emma Walmsley, CEO, GSK: So on the last one, there’s there’s no read across from that. And let’s go to Luke, please, first on Shingrix in China, and then Tony, an update on pneumococcal overall.
Luke Miles, CFO, GSK: Thanks, Steve. Look. The answer is it look. It’s still challenging for all the reasons we explained in 2024. However, there are some small they’re very small green shoots.
So if you look at in market sales CDC so market sales to CDC from GFA and the movement from CDC to the points of vaccination, there is a trend upwards for the last yeah. It’s three months from memory, but it’s off of very low base. So, you know, heavy caution there. The other thing is the CDC stock levels are declining, and they’ve been declining since about February. So it’s not enough to to for us to trigger a major shipment to, but it is you know, it’s it’s at least pointing in the right direction.
The other point I’d make is, look, this you know, we’ve done a lot of work on the strategy on on the way forwards here. It’s very clear, and we’ve got good alignment with, and it’s the and the focus on the comorbid chronic disease subpopulation who are clearly high risk. We seem to get better traction there. The competition’s pulled back, which has created a bit of room for us, and we’ve actually increased our share of voice to take advantage of that. All the other parameters like ATP perception, patient perception are pretty stable.
So, again, you know, I I I won’t say anything 26, but I would say we remain confident of the mid to longer term opportunity in China, and we just need to stick at it. And finally, we’re also doing some life cycle. Tony mentioned this before in terms of a dementia experiment in within China itself. So, yep, we’ll keep moving forwards.
Tony Wood, Chief Scientific Officer, GSK: Great. And then just quickly on maps to Steve. As far as the 24 valent platforms are concerned, both in adults and infants, we’ve learned enough from those platforms to move now to strategically prioritize the 30 plus vaccine. We feel that the characteristics of the maps platform are better expressed there. And I’m I’m sure you’ll follow that the field in general is going in that direction and and Merck’s sort of more tailored approach is also encountering some issues associated with concerns with regards to the evolution of new serotypes like serotype four.
We are on track with regards to starting our first in human for a 30 plus vaccine study at the end of this year. So you should expect readouts on that really in the the 2026. I’d say when you consider the progress we’re making with regards to the 30 plus format and the competitive environment, we remain very much on track and competitive with the 30 plus vaccine, but that, of course, will be towards the end of the decade.
Emma Walmsley, CEO, GSK: Right. Thank you. I think we have one
Call Moderator, GSK: more question. Yes. Time for one last short questions. Justin Smith, please, from Bernstein. Please go ahead.
That’s in short. Yep. I think you should be able to speak, Justin. Okay. If that’s not working, then we can also close the call, and I won’t
Emma Walmsley, CEO, GSK: able Well, listen. Thanks very much, everyone, for joining. Delighted to be reporting another strong quarter and this consist delivery of the consistent step up
Luke Miles, CFO, GSK: of
Emma Walmsley, CEO, GSK: GSK since the separation and most excitingly, the R and D progress we continue to deliver. We’re pleased to update our guidance for the year to being at the top end of the range and continue to be highly confident together of our not only our short, but our medium and our long term outlooks. Look forward to talking to you over the coming days. Thanks. Bye.
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