GSK plc (NYSE:GSK) Q1 2024 Earnings Call Transcript

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Spain/Italy, these are good analogues and we are very much at the start of the process in those markets with single-digit penetration overall. In terms of emerging markets, I think you got a range of markets. Saudi is quite interested in terms of government support with tenders and things like that. We have been very strict on pricing, so that’s encouraging. And then out-of-pocket markets like Brazil, and again we are in single-digit percentage penetration here, so very early days in those markets at a very tight price corridor.

Tony Wood: Hi Mark. In COPD and Nucala, MATINEE is the study you referred to. It is ongoing and we expect it to read out at the end of the year. To get to your questions, it is a broader population and we have included emphysema as well as chronic bronchitis phenotypes. That’s important because of the 500 million individuals with COPD, about 30% of them present with an emphysema phenotype. We are also excluding any current or prior diagnosis of asthma. That was important given the nature of the CRL for the previous studies. I think it is worthwhile just pointing you to the data that we disclosed at ATS which was a post-hoc analysis of those previous studies, showing that in that broader population we see a 24% reduction in exacerbations. It is also important to stress that this is a two-year dataset in an area in which quality of life is also important over and above headline reduction of exacerbations.

Emma Walmsley: Great. Thanks, Tony. Next question please.

Nick Stone: Okay. We will take our next question from Kerry Holford at Berenberg. Kerry, over to you, please.

Kerry Holford: Hi there. Thank you for taking my questions. On Arexvy, just thinking about underlying demand into the next winter season. When does the contracting process start for the upcoming season? Is that something you’re already engaged in? And how might the arrival of a third competitor in Moderna impact that process, the competitive landscape? And then just a quick follow-up on Shingrix. Can you quantify the exact amount that was booked in Q1 relating to the Zhifei agreement in China? Thank you.

Emma Walmsley: Thanks. Well, Luke, continue on this, please.

Luke Miels: Yes, sure. So I mean underlying demand for Arexvy, we remain very confident. I mean if you look at all the market research, whether that’s consumer patient awareness, which is around 86%. If you then look at measures of physician and pharmacy confidence to – knowledge and confidence to discuss RSV with patients and potential people for vaccination, it’s extremely high. It’s in the 90s and high 80s, and that continues to be there. So there’s our confidence and insight there behind that. In terms of the – so I think that will ultimately be translated because there’s an ideal, obviously, synergy with the flu season that we can take advantage. Our overall intent over time, as we’ve done with Shingrix, is to deseasonalize that to manage pharmacy workflow.

But yes, good signs there. And of course, if you look at Q1 demand, that was pretty much the same. When you look at in arm shots as we saw in Q3 of 2023, so good sign. In terms of contracting, everyone is very busily doing that. But I don’t think anything will be ultimately consolidated until we see the June ACIP outcome, which is linked to the other part of your question, which is the presence of Moderna and the impact there. So if you can imagine, you’re a pharmacy chain, you want to see whether at a, is there going to be two or three vaccines. Does anything come up in terms of subgroups, for example, asked for 50 to 59, further discussion on GBS and other topics. And also, yes, what’s the interpretation of the data Moderna has. So all these are moving parts.

Once we get through that, then I think there’ll be a race for lock down contracts as we go into the season there. In terms of Zhifei split with Q1, we don’t break that out for China. But the main thing to remember is if you think about phasing, just for your modeling. Q1 is where we get orders. There’s nothing in Q2, very limited as we ship. And then Q3, you’ll see a bolus and then very little in Q4. Sorry, it’s Q3, nothing in Q3 and a lot in Q4.

Emma Walmsley: Yes. And just so RSV, I don’t think we’re going to see much in Q2, that would be an important point to make because it has stayed seasonally in its first year, although absolutely, we’d love to move that over time as we’ve done very successfully in Shingrix, too. Okay. Thanks, Luke. Next question, please.

Nick Stone: Next question will now come to Graham Parry at Bank of America. Graham, over to you.

Graham Parry: Thanks for taking my questions. So firstly, on Shingrix, just if you can just help us understand U.S. dynamics. So obviously, scripts were down. If you could just help us understand what’s going on in the non-retail segment there. Is that stabilized or even growing again now? And on your peak sales guide there, I think it’s still just £4 billion by 2026. It looks like you have a fighting chance getting there this year, certainly 2025. So just any thoughts on if and when you might have data on that? Do you need to see your supply issues in China sorted to get more confidence in Zhifei growth above the contracted volumes? And then on Arexvy, can you help us understand where the total penetration rates that you see are now between yourselves and Pfizer in the comorbid and the over-80s population where risk is greater?

So as you go into the new season, how many of these people have actually already had a vaccine? And are you going to sort of, I guess, a more difficult to reach population now?

Emma Walmsley: Okay. Well, the back to Luke, again. I would just say, Graham, that we’re not going to update our peak year sales forecast for Shingrix. It’s more than four over time. Obviously, we just had another record quarter, which is great and really excited about what’s coming for Zhifei. But we – as Luke said, we’re contracted for 2.5% over the next few years, and we’re hoping to be more ambitious to that. But Luke, do you want to comment specifically on the Shingrix?

Luke Miels: Sure. And Graham, on the supply with China, it’s a 2024 effect. There was a slight tweak in the process that the Chinese regulator required. We’ve done that. And then now we’re shipping. So that’s the key thing. We’re uncapped in 2025 and 2026 and hopefully beyond. Okay. So there’s some structural things that have occurred here. So the main element, as I said in the earlier part of the call was the Q1 2023, you saw a bolus of people who are waiting for co-pay to be removed. And so that was our highest retail TRx order with Shingrix. So it’s a tough comparator for the TRx retail. Now your question was obviously about non-retail. I mean if you look at the trends last year, we averaged at about 1.3, 1.4 a quarter in arm shots, with Shingrix, whereas in quarter one it was about 1.

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