Tony Wood: Yes. And probably the only thing to add to that, obviously we have PRIMA OS data coming for Zejula soon as well and that will also figure early in the year. Let me address your question on Shingrix, Simon, and for those who haven’t followed it, the long-term follow-up data is exceptional with nearly 80% efficacy overall in the 50-plus population. Of course what that does is underscore the value of vaccinating with Shingrix from 50 years onwards and so based on the strength of the data we have so far, there is no clear evidence as to when a booster would be warranted, but obviously we are continuing to monitor the nature of breakthrough in particular in at-risk populations.
Emma Walmsley: Okay. Next question, please.
Nick Stone: So next question is James Gordon from JPMorgan. James over to you, please.
James Gordon: Hello. James Gordon, JPMorgan. Thanks for taking the questions. The first question was about Arexvy re-vaccination – I want to make sure I have Luke’s comments correctly. Was it that the two-year dosing interval re-vaccination data is now going to be in H2, maybe the ACIP meeting in October, and this is the 004 study antibody titer data. Do you now have data that says with the two-year interval? There are much stronger – is a much stronger boost on antibody levels, and that’s what’s giving you the confidence to get the two-year recommendation, even though you won’t have clinical data? And then the second question was just a couple of one-offs that Luke and Julie mentioned. One was Shingrix U.S. was down 4%, but there was some pricing of prior inventory moves.
Is that a clean trend or could Shingrix in the U.S. still be down teens for the year? And Gen Meds looks like there could be a bit of a one-off as well. I think it grew 1%, but you’re saying now down mid-single digit, so to the extent that Gen Meds has a one-off. And then just gross margin, that’s pretty good, up 300 bps, but you are going to have higher Arexvy sales in H2. So can we say the Q1 gross margin and then give a boost for more Arexvy sales in the second half, or is there some one-off there too?
Emma Walmsley: There are at least four or five questions in there. So anyway, I’m going to come to Julie first on gross margin. Then, Tony, if you could talk about the two-year, three-year data. Just clarify that. And then Luke will come back to perhaps repeat on the Shingrix and Gen Meds questions that have been re-raised too.
Julie Brown: Thank you, Emma. It is definitely the product mix, so because we had such a strong half in the second half of last year, largely based on those launches which, as you know, Specialty Care and Vaccines are high margin, because we had Shingrix, so we had Arexvy and we also had Ojjaara and Jemperli life cycle, they significantly changed the gross margin. We will be up against those in the second half of this year because they are new launches, so that changes the dynamic in gross margin overall. We also have the stocking effect of last year. I think that was gross margin done.
Luke Miels: Yes. So Tony or me?
Emma Walmsley: We get that.
Luke Miels: Yes. Okay. And look, I think I don’t want to repeat myself on Shingrix U.S. I mean the key thing is there is a structural shift out of non-retail to retail. We’re addressing that. We’ve also said as you go up that curve of adoption, you have to work harder for those patients, and that’s what we’re doing. But if you look at it last year, we increased the penetration by 7%. So if we can keep adding one, 1-plus percent each quarter, then it’s still big numbers, James. And I think as I said earlier, you’ll see pharmacists start to switch on and come back to vaccinating Shingrix instead of the respiratory vaccines as we come out of winter in the Northern Hemisphere. So I think still lots of reasons to be balanced and certainly not double-digit pressure.
And then also, again, the strategy has always been with Shingrix, which is to saturate the U.S. and then move into Europe, which, again, the extended efficacy data helps us, which is when we’re negotiating with payers that haven’t got national tenders like we are right now with France. The fact that you’ve got this outstanding efficacy at 11 years is really compelling value for money for these governments. So that’s very helpful. And also for individuals paying out of pocket. And then, of course, we mentioned China. So the strategy that we’ve had of U.S., Europe, emerging markets is very much in place.
Emma Walmsley: With prices maintained.
Luke Miels: Exactly, with very disciplined pricing corridors. Then ultimately, we mentioned booster, which may only be a subset but there’s also the exciting work that we’re looking into with dementia, which, again, I think you would have re-write the penetration rates in a few years time if we did demonstrate a respective outcome on that one. In terms of General Medicines, I mean the way we look at AMP Cap is about a 4% drag, so if you factor that in, I think we are still very much in with the range that we talked about. We did see an effect of certain products like Augmentin, a good season in Japan with hay fever, so these will start to wash out over the year and the more typical structural effects of General Medicines will keep there.
The fact is that, when we get up in the morning, our first priority of course are Vaccines, Specialty Care, General Medicines, in terms of resources, everything by definition has to be third on that priority, so if we can grow in other areas, that’s where we’re going to spend time, money and effort.
Emma Walmsley: And the super contribution to the mix as we said. I mean – we are now at two-thirds of the business. It’s one of the most important structural shifts in the company and is what is helping to drive leverage for us is this move to where innovation can either be truly unique sustained and an enormous demand because of its direct returns in prevention and vaccines or real breakthroughs in step changes in care and prevention in specialties that we’re seeing with the pipeline that’s coming through. Tony, do you want to talk about that?
Tony Wood: Yes. It’s very high level. I’ll walk you through the considerations for the season three data, James. So first of all, just to remind you, an ACIP decision is very unlikely before 2025. And that’s because the first subjects to receive the commercial vaccine are protected through the 2025 season. So whether or not you revaccinate, that can wait until 2025, 2026 season. There are two important data flows running into that. One is the vaccine efficacy study 006, that is dependent on the season. And the Northern Hemisphere 2023, 2024 season has not yet finished. That’s a CDC decision. It’s a global study and that is what is behind the move of the data into the second half. The second data flow is the immunogenicity study, that’s 004, and that is on track to report out in the second half.
