| Broad-based performance drives sales, profits and earnings growth: | |
| • | Total Q1 2024 sales £7.4 billion +10% and +13% ex COVID |
| • | Vaccines sales +16%, +22% ex COVID. Shingrix £0.9 billion +18%, Arexvy £0.2 billion |
| • | Specialty Medicines sales +17%, +19% ex COVID with HIV +14% |
| • | General Medicines sales +1%. Trelegy £0.6 billion +33% |
| • | Total operating profit and Total EPS for Q1 2024 reflected higher charges for CCL(2) remeasurement, partly offset by strong Core(1) growth |
| • | Core operating profit +27% (with further positive impact of +8% ex COVID) and Core EPS +28% (with further positive impact of +9% ex COVID). This reflected strong sales and SG&A leverage, partly offset by increased investment in R&D and lower royalty income |
| • | Cash generated from operations exceeded £1 billion with free cash flow of £0.3 billion |
| (Financial Performance – Q1 2024 results unless otherwise stated, growth % and commentary at CER, ex COVID is excluding COVID-19 solutions as defined on page 47). | |
| Q1 2024 | |||||
| £m | % AER | % CER | |||
| Turnover | 7,363 | 6 | 10 | ||
| Turnover ex COVID | 7,362 | 8 | 13 | ||
| Total operating profit | 1,490 | (28) | (18) | ||
| Total operating margin % | 20.2% | (9.7ppts) | (7.8ppts) | ||
| Total EPS | 25.7p | (30) | (19) | ||
| Core operating profit | 2,443 | 17 | 27 | ||
| Core operating margin % | 33.2% | 3.1ppts | 4.6ppts | ||
| Core EPS | 43.1p | 16 | 28 | ||
| Cash generated from operations | 1,126 | >100 | |||
| R&D delivery and targeted business development supports future growth: | |
| • | Strong pipeline progress with positive phase III read outs for gepotidacin in uncomplicated urogenital gonorrhoea, Cabenuva in HIV treatment, Jemperli in endometrial cancer, and Blenrep in multiple myeloma |
| • | Innovative Vaccine portfolio further strengthened with regulatory submission acceptances for Arexvy for prevention of RSV in adults 50-59 (US), new meningococcal ABCWY vaccine candidate (US), and Shingrix for prevention of shingles in at-risk adults >18 (China) |
| • | US FDA Fast Track designation received for bepirovirsen in chronic hepatitis B |
| • | New positive data for CAB-ULA as ultra long-acting treatment for HIV supports progression and transition of HIV portfolio for long-term growth |
| • | US FDA regulatory submission accepted for priority review for Jemperli to treat endometrial cancer in broader patient populations |
| • | Acquisition of Aiolos Bio completed, expanding respiratory biologics pipeline with AIO-001, a potentially best-in-class long-acting TSLP monoclonal antibody for treatment of asthma |
| 2024 guidance updated and dividends: | |
| • | Now expect 2024 turnover growth towards the upper part of 5% to 7% range; Core operating profit growth of 9% to 11% (previously 7% to 10%); Core EPS growth of 8% to 10% (previously 6% to 9%) |
| • | Dividend declared of 15p for Q1 2024; 60p expected for Full Year 2024 |
Guidance all at CER and excluding COVID-19 solutions
| Emma Walmsley, Chief Executive Officer, GSK:“We have made a strong start to 2024, with another quarter of excellent performance and continued pipeline progress, including positive data read outs for 4 phase III medicines. These, together with other R&D achievements, mean we have strengthened prospects for growth in all of our key therapeutic areas this quarter: infectious diseases, HIV, respiratory/immunology and oncology. We expect this strong momentum to continue, and look forward to delivering another year of meaningful growth in sales and earnings in 2024.” |
The Total results are presented in summary above and on page 8 and Core results reconciliations are presented on pages 20 and 21. (1) GSK has made an update to its reporting framework in Q1 2024 which is to change the description of Adjusted results to Core results to align with European peers in the pharmaceutical industry but with no change to the basis or figures. Core results are a non-IFRS measure that may be considered in addition to, but not as a substitute for, or superior to, information presented in accordance with IFRS. The following terms are defined on page 47: Core results, £% or AER% growth, CER% growth,COVID-19 solutions, turnover excluding COVID-19 solutions; and other non-IFRS measures. GSK provides guidance on a Core results basis only, for the reasons set out on page 18. All expectations, guidance and targets regarding future performance and dividend payments should be read together with ‘Guidance and outlooks, assumptions and cautionary statements’ on page 49. (2) Contingent consideration liability is abbreviated to CCL.
2024 Guidance
GSK provides its full-year guidance at constant exchange rates (CER). All expectations and full-year growth rates exclude any contributions from COVID-19 solutions.
GSK has started 2024 strongly, with business momentum across all product areas, particularly in Vaccines and Specialty Medicines, including sales contributions from newly launched vaccines and medicines Arexvy and Ojjaara respectively. General Medicines, particularly Trelegy, also performed better than expected. Along with a favourable product mix, GSK benefitted in the quarter from a successful Zejula royalty dispute appeal, and we also expect royalty income to be slightly higher for the full year. As a result, GSK has upgraded its full-year 2024 guidance.
| All Guidance excludes the contributions of COVID-19 solutions | Current 2024 guidance at CER | Previous 2024 guidance at CER |
| Turnover | Increase towards the upper part of the range of between 5% to 7% | Increase between 5% to 7% |
| Core operating profit | Increase between 9% to 11% | Increase between 7% to 10% |
| Core earnings per share | Increase between 8% to 10% | Increase between 6% to 9% |
GSK expects first half 2024 sales growth to be higher than second half 2024 due to the comparator to H2 2023, which benefitted from newly launched vaccines and medicines. In particular, second half 2024, compared to the same period in the prior year, is expected to be influenced by the 2023 launch dynamics and initial channel inventory build attributable to Arexvy. In addition, we expect the majority of Shingrix sales in China in to be in the first half 2024.
This guidance continues to be supported by the following turnover expectations for full-year 2024 at CER:
| All turnover expectations exclude the contributions of COVID-19 solutions | No change to current 2024 expectations at CER |
| Vaccines | Increase of high single-digit to low double-digit per cent in turnover |
| Specialty Medicines | Increase of low double-digit per cent in turnover |
| General Medicines | Decrease of mid-single-digit per cent in turnover |
Core Operating profit is expected to grow between 9 to 11 per cent at CER (previously 7 to 10 per cent increase), despite a 6 percentage point impact to Operating Profit growth following the loss of the majority of Gardasil royalties effective from the beginning of 2024. GSK continues to expect to deliver leverage at a gross margin level due to improved product mix from Vaccines and Specialty Medicines growth and continued operational efficiencies. In addition, GSK continues to anticipate further leverage in Operating Profit due to a step down in SG&A growth to a low single-digit increase. R&D continues to be expected to increase broadly in line with sales to support growth of the pipeline.
Core Earnings per share is now expected to increase between 8 to 10 per cent at CER, reflecting higher operating profit and more favourable net finance costs. Expectations for non-controlling interests remain unchanged relative to 2023, and GSK continues to anticipate an increase in the Core effective tax rate to around 17% following implementation of a global minimum corporate income tax rate aligned with the Organisation for Economic Co-Operation and Development ‘Pillar 2’ initiative.
2021-26 and 2031 Outlooks
In January 2024 GSK set out improved outlooks for the period 2021-2026 and for 2031. Please see 2023 Full year and fourth quarter results on gsk.com.
Additional commentary
Dividend policy
The Dividend policy and the expected pay-out ratio remain unchanged. Consistent with this, and reflecting strong business performance during the quarter, GSK expects to declare a dividend for Q1 2024 of 15p per share and for the full year 2024 60p.
COVID-19 solutions
For the full year 2024, GSK does not anticipate any further COVID-19 pandemic-related sales or operating profit. Consequently, and in comparison to 2023, it is anticipated that the full year growth in sales and Core operating profit will be adversely impacted by one and two percentage points, respectively.
Exchange rates
If exchange rates were to hold at the closing rates on 31 March 2024 ($ 1.26/£1, € 1.17/£1 and Yen 191/£1) for the rest of 2024, the estimated impact on 2024 Sterling turnover growth for GSK would be -3% and if exchange gains or losses were recognised at the same level as in 2023, the estimated impact on 2024 Sterling Core Operating Profit growth for GSK would be -5%.
Results presentation
A conference call and webcast for investors and analysts of the quarterly results will be hosted by Emma Walmsley, CEO, at 12 noon BST (US EST at 7am) on 1 May 2024. Presentation materials will be published on www.gsk.com prior to the webcast and a transcript of the webcast will be published subsequently.
Notwithstanding the inclusion of weblinks, information available on the company’s website, or from non GSK sources, is not incorporated by reference into this Results Announcement.
| Performance: turnover |
| Turnover | Q1 2024 | ||||
| £m | GrowthAER% | GrowthCER% | |||
| Shingles | 945 | 13 | 18 | ||
| Meningitis | 299 | 7 | 11 | ||
| RSV (Arexvy) | 182 | – | – | ||
| Influenza | 13 | 8 | 8 | ||
| Established Vaccines | 838 | 3 | 7 | ||
| Vaccines ex COVID | 2,277 | 17 | 22 | ||
| Pandemic vaccines | – | >(100) | >(100) | ||
| Vaccines | 2,277 | 12 | 16 | ||
| HIV | 1,613 | 10 | 14 | ||
| Respiratory/Immunology and Other | 635 | 6 | 11 | ||
| Oncology | 273 | >100 | >100 | ||
| Specialty Medicines ex COVID | 2,521 | 14 | 19 | ||
| Xevudy | 1 | (97) | (97) | ||
| Specialty Medicines | 2,522 | 13 | 17 | ||
| Respiratory | 1,725 | (2) | 2 | ||
| Other General Medicines | 839 | (7) | (2) | ||
| General Medicines | 2,564 | (4) | 1 | ||
| Total | 7,363 | 6 | 10 | ||
| Total ex COVID | 7,362 | 8 | 13 | ||
| By Region: | |||||
| US | 3,589 | 10 | 14 | ||
| Europe | 1,621 | (5) | (3) | ||
| International | 2,153 | 9 | 16 | ||
| Total | 7,363 | 6 | 10 | ||
| Turnover ex COVID is excluding COVID-19 solutions during the years from 2020 to 2023 and is a non-IFRS measure defined on page 47 with the reconciliation to the IFRS measure Turnover included in the table above. Financial Performance – Q1 2024 results unless otherwise stated, growth % and commentary at CER. | |||||
| Q1 2024 | ||||
| £m | AER | CER | ||
| Vaccines | Total | 2,277 | 12% | 16% |
| Excluding COVID | 2,277 | 17% | 22% | |
In Q1 2024, Vaccine sales increased by double-digits, reflecting US demand for Arexvy and strong market growth for Shingrix in International and European markets. However, the quarter’s growth was adversely impacted by six percentage points due to COVID-19 solution sales compared to Q1 2023.
| Shingles | 945 | 13% | 18% |
The sales of Shingrix, a vaccine against herpes zoster (shingles), increased in the quarter due to strong demand following public funding expansion in International and European markets, with new national immunisation programmes in Australia and Europe, including the UK, together with earlier than anticipated supply to Zhifei (Chongqing Zhifei Biological Products, Ltd), GSK’s co-promotion partner in China. Markets outside the US now represent more than 50% of global sales (Q1 2023: 40%), with Shingrix launched in 39 countries. The majority of these markets have average cumulative immunisation rates below 5%.
In Q1 2024, US sales decreased by 7% at AER and 4% at CER, reflecting the comparison to Q1 2023, which benefitted from the removal of adult vaccine cost-sharing covered under Medicare Part D and expanded coverage of adult vaccines under Medicare following the implementation of the Inflation Reduction Act. In addition, the performance reflected the prioritisation of other adult vaccines for example, influenza and COVID-19 during the viral respiratory season and the increasing challenge of activating harder to reach consumers. The US cumulative immunisation penetration rate at the end of 2023 reached 37% of the more than 120 million US adults(1) currently recommended to receive Shingrix, up seven percentage points since the end of 2022. The US performance in Q1 2024 was partly offset by favourable pricing and prior period channel inventory movements.
| (1) | United States Census Bureau, International Database, Year 2023. |
| Q1 2024 | |||
| £m | AER | CER | |
| Meningitis | 299 | 7% | 11% |
In Q1 2024, meningitis vaccine sales increased following higher demand in International markets for Menveo, a vaccine against meningitis ACWY. Sales for Bexsero, a vaccine against meningitis B, were stable at AER and increased by 3% at CER in the quarter, primarily reflecting increased demand in Australian regional immunisation programmes and the recent launch in Vietnam. However, this performance was partly offset by tender phasing in Europe.
| RSV (Arexvy) | 182 | – | – |
Arexvy, a respiratory syncytial virus (RSV) vaccine for older adults, delivered Q1 2024 sales of £182 million, reflecting continued strong consumer uptake and leading market share. In the US, Q1 2024 sales were £154 million, with the overwhelming majority of doses administered in the retail setting. Arexvy maintained around two-thirds of the vaccination share, while demand decreased overall in line with anticipated seasonality patterns. More than seven million of the 83 million US adults(1) aged 60 and older at risk have been protected by Arexvy since the launch in Q3 2023. The performance in Q1 2024 also reflected initial tender deliveries in Saudi Arabia, continued consumer uptake in Canada, and a new launch inventory build in Brazil.
| Established Vaccines | 838 | 3% | 7% |
In Q1 2024, Established Vaccines’ growth was driven by an increased supply of measles, mumps, rubella, and varicella vaccines in International, a higher share of Rotarix in the US and increased demand in International. Infanrix/Pediarix decreased due to competitive pressure in the US.
| Specialty Medicines | Total | 2,522 | 13% | 17% |
| Excluding COVID | 2,521 | 14% | 19% |
Specialty Medicines sales increased by double digits in the quarter, reflecting continued growth across disease areas, with strong performances in HIV, Respiratory/Immunology and Oncology.
| HIV | 1,613 | 10% | 14% |
In Q1 2024 HIV delivered double digit growth, which was primarily driven by a 2 percentage point increase in market share versus Q1 2023 as a result of strong patient demand for Oral 2DR (Dovato, Juluca) and long-acting medicines (Cabenuva, Apretude), as well as favourability in the quarter on pricing and tender phasing.
| Oral 2DR | 640 | 17% | 21% |
Oral 2-drug regimens sales in the quarter were £640 million, which now represents 40% of the total HIV portfolio. Dovato continues to be the highest selling product in the HIV portfolio with sales of £483 million in the quarter and growing 27% versus Q1 2023.
| Long-Acting Medicines | 267 | 77% | 83% |
Long-Acting Medicine sales in the quarter were £267 million, growing £116 million at AER; £125 million at CER versus Q1 2023 and now represent 17% of the total HIV portfolio compared to 10% for Q1 2023. Cabenuva sales in Q1 2024 were £213 million and growing 73% driven by strong patient demand. Apretude sales in Q1 2024 were £54 million, growing £30 million at AER; £32 million at CER compared to Q1 2023.
| Respiratory/Immunology and Other | 635 | 6% | 11% |
Sales primarily comprise contributions from Nucala in respiratory and Benlysta in immunology. In Q1 2024, sales growth for Nucala and Benlysta increased, mainly driven by demand in European and International markets. However, this performance was reduced by the US, where the growth of the medicines remained broadly stable. Volume demand growth was partly offset by the impact of channel inventory reduction following a channel inventory build in Q4 2023.
| Nucala | 374 | 8% | 13% |
Nucala, is an IL-5 antagonist monoclonal antibody treatment for severe asthma, with additional indications including chronic rhinosinusitis with nasal polyps, eosinophilic granulomatosis with polyangiitis (EGPA), and hypereosinophilic syndrome (HES). In Q1 2024, sales growth was driven by strong performances in Europe and International regions, which reflected higher patient demand for treatments addressing eosinophilic-led disease.
| (1) | United States Census Bureau, International Database, Year 2023. |
| Q1 2024 | |||
| £m | AER | CER | |
| Benlysta | 260 | 3% | 8% |
Benlysta, a monoclonal antibody treatment for Lupus, continues to grow consistently, representing strong demand and volume growth in European and International markets. Bio penetration rates have increased in certain International markets, particularly in Japan and China.
| Oncology | 273 | >100% | >100% |
In Q1 2024, Oncology sales growth increased driven by strong patient growth for Zejula, a PARP(1), Jemperli, a PD-1(2) blocking antibody, and Ojjaara/Omjjara, a daily JAK1/JAK2 and ACVR1(3) inhibitor. Jemperli, a medicine for front-line treatment in combination with chemotherapy for patients with dMMR/MSI-H primary advanced or recurrent endometrial cancer, continued to grow strongly and delivered sales of £80 million in the quarter. Ojjaara/Omjjara, a treatment for myelofibrosis patients with anaemia, launched in the US in Q3 2023 and in the UK and Germany in Q1 2024, has seen strong uptake since launch and delivered £52 million of sales in the quarter.
| Zejula | 141 | 24% | 27% |
Zejula delivered double-digit sales growth in the quarter, with strong performances across all regions following increased patient demand and higher volumes. In addition, new launches, particularly in the International region, also contributed to the performance.
| General Medicines | 2,564 | (4%) | 1% |
Sales include contributions from both the Respiratory and Other General Medicine portfolios. In Q1 2024, sales decreased 4% at AER but increased by 1% at CER. This increase was driven primarily by strong demand across all regions for Trelegy, a chronic obstructive pulmonary disease (COPD) and asthma medicine. The performance also included increased growth for Anoro in Europe and International, and a strong antibiotic performance in International markets. However, this performance was primarily offset by a decrease across the Established Respiratory and Other General Medicine portfolios following the adverse impact of removing the Average Manufacturer Price (AMP) cap on Medicaid drug prices in the US. This removal particularly impacted the performance of Advair, Flovent, and Lamictal in the quarter due to significant pricing reductions, reduced commercial contracting, and the decision to discontinue branded Flovent. However, the increased use of authorised generic versions of Advair and Flovent has partially offset the impact of AMP cap removal while, significantly, continuing to provide access to patients.
| Respiratory | 1,725 | (2%) | 2% |
In Q1 2024, the increase in sales growth reflected Trelegy’s strong performance in all regions and the increased demand for Anoro, particularly in Europe and International. However, as mentioned above, this was partially offset by the decrease across the Established Respiratory portfolio and the removal of the AMP cap.
| Trelegy | 591 | 27% | 33% |
Trelegy is the most prescribed single inhaler triple therapy (SITT) treatment worldwide for COPD and asthma. In Q1 2024 sales growth significantly increased across all regions, reflecting strong patient demand, single-inhaled triple therapy class growth, and increased market share.
| Seretide/Advair | 282 | (17%) | (13%) |
Seretide/Advair is a combination treatment used to treat asthma and COPD. In Q1 2024, the decrease in sales reflected continued generic erosion from competitor products in Europe and International and the removal of the AMP cap on Medicaid drug prices in the US.
| Other General Medicines | 839 | (7%) | (2%) |
The performance in Q1 2024 was adversely impacted by ongoing generic competition and the removal of the AMP cap on Medicaid drug prices in the US, notably impacting Lamictal’s performance. This performance was partially offset by increased antibiotic growth in International markets.
Footnotes:
| (1) | PARP: a Poly ADP ribose polymerase |
| (2) | PD-1: a programmed death receptor-1 blocking antibody |
| (3) | JAK1/JAK2 and ACVR1: once a-day, oral JAK1/JAK2 and activin A receptor type 1 (ACVR1) inhibitor |