TIDMGSK
RNS Number : 4922O
GSK PLC
01 February 2023
Issued: Wednesday, 1 February 2023, London U.K.
GSK delivers strong 2022 performance with full year sales of GBP29.3
billion
+19% AER, +13% CER; Total EPS 371.4p >100%
Adjusted EPS of 139.7p +27% AER, +15% CER from continuing operations
Highlights
Step change in commercial execution drives strong sales growth across
Specialty Medicines and Vaccines
-- Sales of GBP29.3 billion +19% AER, +13% CER. Sales +15% AER, +10%
CER excluding COVID-19 solutions
-- Specialty Medicines GBP11.3 billion +37% AER, +29% CER; HIV +20%
AER, +12% CER; Oncology +23% AER, +17% CER; Immuno-inflammation
and other specialty +29% AER +20% CER; COVID-19 solutions (Xevudy)
sales GBP2.3 billion
-- Vaccines GBP7.9 billion +17% AER, +11% CER; Shingrix GBP3 billion
+72% AER, +60% CER
-- General Medicines GBP10.1 billion +5% AER, +1% CER
Prioritised investment and cost discipline support strong growth
in operating profit and EPS
-- Total continuing operating margin 21.9%. Total EPS 371.4p > 100%
primarily reflecting the gain from discontinued operations arising
on the demerger of the Consumer Healthcare business. Total continuing
EPS 110.8p +34% AER, +18% CER
-- Adjusted operating margin 27.8%. Adjusted operating profit growth
+26% AER, +14% CER. This included a decline in growth from COVID-19
solutions of approximately 3% AER and CER
-- Adjusted EPS 139.7p +27% AER, +15% CER. This included a decline
in growth from COVID-19 solutions of approximately 4% AER, 3% CER
-- Full-year 2022 cash generated from operations attributable to continuing
operations GBP7.9 billion. Full-year free cash flow GBP3.3 billion
R&D delivery and business development supports future growth
-- Innovative pipeline of 69 vaccines and specialty medicines based
on science of the immune system, with 18 in phase III/registration
-- Potential best in class RSV older adults candidate vaccine filed
in US, EU, Japan; Shingrix interim 10-year data presented at ID
Week 2022; acquisition of Affinivax completed, including phase
II next-generation vaccine for pneumococcal disease and use of
innovative MAPs technology
-- Continued progress in development of long-acting HIV treatments;
positive phase II data on N6LS broadly-neutralising antibody presented
at HIV Glasgow
-- Pivotal phase III trials for gepotidacin antibiotic for uncomplicated
UTIs stopped early for efficacy; positive phase IIb data for bepirovirsen,
potential functional cure for chronic hepatitis B; exclusive licence
agreement with Spero Therapeutics for tebipenem Hbr, late-stage
antibiotic for complicated UTIs
-- Expansion of depemokimab phase III programme with trials for long-acting
IL-5 inhibitor in three additional eosinophil-driven diseases
-- 4 approvals anticipated in 2023: RSV OA vaccine (US, EU, JP); Jemperli
in 1L endometrial cancer (US); momelotinib in myelofibrosis (US)
and daprodustat in chronic kidney disease (US, EU)
Confident in outlooks for turnover and Adjusted operating profit
growth
-- 2023 Turnover expected to increase between 6% to 8 % ; Adjusted
operating profit expected to increase between 10% to 12% ; EPS
expected to increase between 12% to 15%
-- 2023 Guidance at CER and excludes any contribution from COVID-19
solutions
-- 13.75p dividend declared for the Q4 2022. No change to expected
dividend from GSK of 56.5p/share for 2023
Emma Walmsley, Chief Executive Officer, GSK:
" 2022 was a landmark year for GSK delivering the step change in
performance we committed to, driven by strong growth in specialty
medicines and vaccines, including record sales for Shingrix. We enter
2023 with good momentum, underpinning confidence in our ambitious
sales and profit outlooks for 2026. At the same time, we continue
to build a stronger portfolio and pipeline based on infectious diseases
and the science of the immune system, including our potential new
RSV vaccine. This momentum, together with further targeted business
development, means GSK will also be in a strong position to deliver
growth from 2026 onwards ."
The Total results are presented in summary on page 2 and under 'Financial
performance' on pages 9 and 22 and Adjusted results reconciliations
are presented on pages 18, 19, 31 and 32. Adjusted results are a
non-IFRS measure excluding discontinued operations and other adjustments
that may be considered in addition to, but not as a substitute for,
or superior to, information presented in accordance with IFRS. Adjusted
results are defined on page 39 and GBP% or AER% growth, CER% growth,
free cash flow and other non-IFRS measures are defined on page 67,
COVID-19 solutions are also defined on page 67. GSK provides guidance
on an Adjusted results basis only, for the reasons set out on page
39. All expectations, guidance and targets regarding future performance
and dividend payments should be read together with 'Guidance, assumptions
and cautionary statements' on pages 68 and 69.
---------------------------------------------------------------------------
2022 results
Q4
2022 2022
------- ------- ------- ------- ------- -------
Growth Growth Growth Growth
GBPm GBP% CER% GBPm GBP% CER%
------- ------- ------- ------- ------- -------
Turnover 29,324 19 13 7,376 4 (3)
Total continuing operating
profit* 6,433 48 31 1,868 >100 >100
Total EPS 371.4p >100 >100 37.1p 98 75
Total continuing EPS 110.8p 34 18 37.2p >100 >100
Total discontinued EPS* 260.6p >100 >100 (0.1)p >(100) >(100)
Adjusted operating profit 8,151 26 14 1,595 21 5
Adjusted EPS 139.7p 27 15 25.8p 10 (6)
Cash generated from operations
attributable to continuing
operations 7,944 10 2,101 (37)
Free cash flow 3,348 1 895 (62)
* The amounts presented in the table above for continuing operations
and Adjusted results excludes the Consumer Healthcare business
discontinued operation. The amounts presented for discontinued
EPS are for the demerger of the Consumer Healthcare business.
The presentation of continuing and discontinued operations under
IFRS 5 are set out on page 52.
2023 guidance
The company provides its full-year 2023 guidance at constant exchange
rates (CER). All expectations and full-year growth rates exclude
any contributions from COVID-19 solutions.
Turnover is expected to increase between 6 to 8 per cent
Adjusted operating profit is expected to increase between
10 to 12 per cent
Adjusted earnings per share is expected to increase between
12 to 15 per cent
Due to the phasing of quarterly results in 2022 and the resulting
comparators, GSK expects turnover and Adjusted operating profit growth
to be slightly lower in the first half of 2023 including a challenging
comparator in Q1 2022 and somewhat higher in the second half, relative
to full-year expectations.
Despite the recovery of healthcare systems, uncertain economic conditions
prevail across many markets in which GSK operates and we continue
to expect to see variability in performance between quarters.
This guidance is supported by the following turnover expectations
for full year 2023 at CER:
Specialty Medicines - Expected increase of mid to high
single-digit per cent in turnover
Vaccines - Expected increase of mid-teens per cent in
turnover
General Medicines - Expected slight decrease in turnover
Adjusted Operating profit is expected to grow between 10 to 12 per
cent at CER reflecting Cost of sales and R&D increasing at a rate
slightly below turnover, while SG&A is anticipated to increase at
a rate broadly aligned to turnover, reflecting targeted support for
launches and potential launches including the RSV older adult candidate
vaccine. Adjusted earnings per share is expected to increase between
12 to 15 per cent at CER reflecting favourable net finance costs
and non-controlling interests plus an expected lower tax rate, at
around 15%.
Additional commentary
Dividend policies and expected pay-out ratios remain unchanged for
GSK. The future dividend policies and guidance regarding the expected
dividend pay-out in 2023 for GSK are provided on page 37 .
COVID-19 solutions
Based on known binding agreements with governments, GSK does not
anticipate any significant COVID-19 pandemic-related sales or operating
profit in 2023. Sales of COVID-19 solutions were GBP 2.4 billion
in 2022 and therefore we expect a reduction in Turnover growth by
approximately 9% and a reduction in Adjusted Operating profit growth
by 6% to 7%. However, the Company continues to discuss future opportunities
to support governments, healthcare systems, and patients whereby
its COVID-19 solutions can address the emergence of any new COVID-19
variant of concern.
All expectations, guidance and targets regarding future performance
and dividend payments should be read together with 'Guidance, assumptions
and cautionary statements' on pages 68 and 69. If exchange rates
were to hold at the closing rates on 27 January 2023 ($ 1.24/ GBP1,
EUR 1.14 /GBP1 and Yen 161 /GBP1) for the rest of 2023, the estimated
impact on 2023 Sterling turnover growth for GSK would be stable and
if exchange gains or losses were recognised at the same level as
in 2022, the estimated impact on 2023 Sterling Adjusted Operating
Profit growth for GSK would also be stable.
Demerger of Consumer Healthcare
On 18 July 2022, GSK plc separated its Consumer Healthcare business
from the GSK Group to form Haleon, an independent listed company.
The separation was effected by way of a demerger of 80.1% of GSK's
68% holding in the Consumer Healthcare business to GSK shareholders.
Following the demerger, 54.5% of Haleon was held in aggregate by
GSK Shareholders, 6.0% remains held by GSK (including shares received
by GSK's consolidated ESOP trusts) and 7.5% remains held by certain
Scottish Limited Partnerships (SLPs) set up to provide collateral
for a funding mechanism pursuant to which GSK will provide additional
funding for its UK defined benefit Pension Schemes. The aggregate
ownership by GSK (including ownership by the ESOP trusts and SLPs)
after the demerger of 13.5% is measured at fair value with changes
through profit and loss.
The gain on the demerger for the distributed stake was GBP 7.7 billion
which was recognised in the full-year. The asset distributed was
the 54.5% ownership of the Consumer Healthcare business. The net
assets derecognised reflected Consumer Healthcare transactions up
to 18 July 2022 which included pre-separation dividends declared
and settled before 18 July 2022. Those dividends included: GBP10.4
billion (GBP7.1 billion attributable to GSK) of dividends funded
by Consumer Healthcare debt that was partially on-lent during Q1
2022 and dividends of GBP0.6 billion (GBP0.4 billion attributable
to GSK) from available cash balances. GSK's share of the pre-separation
dividends funded by debt resulted in a reduction of net debt for
GSK on demerger. The gain on the demerger arising from remeasurement
of the retained stake was GBP 2.4 billion which was recognised in
the full-year.
The total gain on the demerger of the Consumer Healthcare business
for the full-year was GBP10.1 billion. In addition, the Profit after
taxation from discontinued operations for the Consumer Healthcare
business from 1 January to 18 July 2022 was GBP 0.6 billion which
increased the Total profit after tax of discontinued operations in
the full-year to GBP 10.7 billion. Following finalisation of the
demerger accounting, an adjustment of GBP0.5 billion to increase
the gain on the demerger of Consumer Healthcare as disclosed in Q3
2022 from GBP9.6 billion to GBP10.1 billion for the full-year has
been recorded retrospectively within the Q3 2022 results. See page
55 for further details on the demerger of Consumer Healthcare.
Results presentation
A conference call and webcast for investors and analysts of the quarterly
results will be hosted by Emma Walmsley, CEO, at 11am GMT on 1 February
2023. Presentation materials will be published on www.gsk.com prior
to the webcast and a transcript of the webcast will be published
subsequently.
Information available on GSK's website does not form part of, and
is not incorporated by reference into, this Results Announcement.
Operating performance summary
The amounts below are from continuing operations unless otherwise
specified.
Turnover 2022 Q4 2022
------------------------
Growth Growth Growth Growth
GBPm GBP% CER% GBPm GBP% CER%
------- ------- ------- ------ ------- -------
Specialty Medicines 11,269 37 29 2,681 (3) (11)
Vaccines 7,937 17 11 2,074 15 7
General Medicines 10,118 5 1 2,621 5 -
------- ------- ------- ------ ------- -------
Commercial Operations 29,324 19 13 7,376 4 (3)
------- ------- ------- ------ ------- -------
Turnover growth in 2022 reflected strong performance in all three
product groups. Turnover growth in Q4 2022 was impacted by an unfavourable
comparator due to strong sales of COVID-19 solutions in Q4 2021.
Turnover grew 16% at AER, 10% at CER in 2022 and 17% at AER, 9% at
CER in Q4 2022 excluding COVID-19 solutions sales. Specialty Medicines
included GBP2,309 million sales of Xevudy, and double-digit growth
of all therapy areas in 2022. Specialty Medicines also saw double
digit growth of all therapy areas in Q4 2022 excluding COVID-19 solutions.
Specialty Medicines
Specialty Medicines growth in 2022 was driven by consistent growth
in all therapy areas. Total Specialty Medicines sales in the quarter
were GBP2,681 million down 3% at AER, 11% at CER reflecting strong
Xevudy sales in Q4 2021. Specialty Medicines, excluding sales of
Xevudy, were GBP8,960 million up 23% at AER, 15% at CER in 2022 and
GBP2,556 million, up 32% at AER, 21% at CER in Q4 2022.
Vaccines
Vaccines growth in 2022 and in Q4 2022 reflected strong Shingrix
performance, partially offset by higher pandemic adjuvant sales in
2021. Vaccines grew 24% at AER, 17% at CER in 2022 and 17% at AER,
9% at CER in Q4 2022, excluding pandemic adjuvant sales.
General Medicines
In 2022, General Medicines reflected the post pandemic recovery of
the antibiotics market and strong performance of Trelegy in respiratory
across all regions. During Q4 2022 the impact of generic competition
in US and other markets was offset by Trelegy growth in respiratory
and the recovery of the antibiotic market.
Operating profit
2022
Total operating profit from continuing operations was GBP6,433 million
compared with GBP4,357 million in 2021. This included the GBP0.9
billion upfront income received from the settlement with Gilead Sciences,
Inc. (Gilead) increased profits on turnover growth of 13% at CER
and fair value gains on investments, partly offset by higher remeasurement
charges for contingent consideration liabilities. Adjusted operating
profit was GBP8,151 million, 26% higher at AER and 14% at CER than
2021. The Adjusted operating margin of 27.8% was 1.5 percentage points
higher at AER and 0.3 percentage points higher at CER compared to
2021. This primarily reflected the impact from low margin COVID-19
solutions sales (Xevudy). This was offset by operating leverage from
strong sales growth, mix benefit, lower inventory adjustments and
write offs and higher royalty income.
Q4 2022
Total operating profit from continuing operations was GBP1,868 million
compared with GBP492 million in Q4 2021. The increase primarily reflected
fair value gains on investments, milestone income from disposals
and lower remeasurement charges for contingent consideration liabilities.
Adjusted operating profit was GBP1,595 million, 21% higher at AER
and 5% at CER than Q4 2021. The Adjusted operating margin of 21.6%
was higher by 3.0 percentage points at AER and 1.5 percentage points
at CER than in Q4 2021. This reflected the impact from lower sales
of COVID-19 solutions, lower inventory adjustments and write offs
in Vaccines as well as a favourable mix and higher royalty income.
This was partly offset by increased launch investment in SG&A in
Specialty Medicines.
Earnings per share
2022
Total EPS from continuing operations was 110.8p compared with 82.9p
in 2021. This primarily reflected the GBP0.9 billion upfront income
received from the settlement with Gilead, increased profits from
turnover growth and fair value gains on investments, partly offset
by higher remeasurement charges for contingent consideration liabilities
and an unfavourable comparison due to a credit of GBP430 million
to Taxation in 2021.
Adjusted EPS from continuing operations was 139.7p compared with
110.3p in 2021. Operating leverage from strong sales growth, beneficial
mix and lower inventory adjustments and write-offs, higher royalty
income and a lower effective tax rate was partly offset by increased
investment behind launches, higher supply chain, freight and distribution
costs and higher non-controlling interests.
Q4 2022
Total EPS from continuing operations was 37.2p compared with 10.6p
in Q4 2021. This primarily reflected higher fair value gains on investments
and lower remeasurement charges for contingent consideration liabilities.
Adjusted EPS from continuing operations was 25.8p compared with 23.6p
in Q4 2021. The reduction primarily reflected the impact from lower
sales of COVID-19 solutions low margin Xevudy and pandemic adjuvant,
higher interest costs and a higher effective tax rate compared to
Q4 2021.
Cash flow
2022
Cash generated from operations attributable to continuing operations
for the year was GBP7,944 million (2021: GBP7,249 million). The increase
primarily reflected a significant increase in operating profit, favourable
exchange impact and favourable timing of collections, partly offset
by unfavourable timing of profit share payments for Xevudy sales,
increased cash contributions to the UK defined benefit pension schemes,
increased contingent consideration payments and a higher increase
in inventory. Cash generated from operations attributable to discontinued
operations for the full year was GBP932 million (2021: GBP1,994 million).
Net debt reduced by GBP2,641 million, partly due to GBP7,112 million
received from demerger dividends and GBP3,108 million paid for the
acquisitions of Sierra Oncology, Inc (Sierra) and Affinivax Inc.
(Affinivax).
Q4 2022
Cash generated from operations attributable to continuing operations
for the quarter was GBP2,101 million (Q4 2021: GBP3,329 million).
The decrease primarily reflected unfavourable timing of profit share
payments for Xevudy, increased cash contributions to the UK defined
benefit pension schemes and unfavourable timing of returns and rebates
partly offset by an increase in operating profit. Cash generated
from operations attributable to discontinued operations for the quarter
was GBP4 million (Q4 2021: GBP872 million).
Profit/(loss) and earnings per share from discontinued operations
2022
Profit after taxation from discontinued operations amounted to GBP10,700
million (2021: GBP1,580 million). This includes GBP10,084 million
for the gain arising on the demerger of Consumer Healthcare split
between the amount distributed to shareholders on demerger of GBP7,651
million and profit after taxation on discontinued operations for
the retained stake of GBP2,433 million. In addition, the Profit after
taxation from discontinued operations for the Consumer Healthcare
business was GBP621 million (2021: GBP1,580 million).
EPS from discontinued operations was 260.6 p, compared with 26.7
p in 2021. The increase primarily reflected the gain arising on the
demerger of Consumer Healthcare recognised in Profit after taxation
for discontinued operations.
Q4 2022
The loss after taxation from discontinued operations amounted to
GBP5 million (Q4 2021: profit of GBP510 million).
Loss per share from discontinued operations was (0.1)p compared with
EPS of 8.1 p in Q4 2021.
Total earnings per share
2022
Total EPS was 371.4p compared with 109.6p in 2021. The increase primarily
reflected the profit after taxation for discontinued operations recognised
on the Consumer Healthcare business demerger, upfront income received
from the settlement with Gilead, increased profits and fair value
gains on investments, partly offset by higher remeasurement charges
for contingent consideration liabilities and an unfavourable comparison
due to a credit of GBP397 million to Taxation in 2021.
Q4 2022
Total EPS was 37.1p compared with 18.7 p in Q4 2021. The increase
primarily reflected higher fair value gains on investments and lower
remeasurement charges for contingent consideration liabilities.
Q4 2022 pipeline highlights (since 2 November 2022)
Trial (indication,
Medicine/vaccine presentation) Event
Regulatory approvals Rotarix Rotavirus, liquid Regulatory approval
or other regulatory formulation (US)
action
------------------- -------------------------- ------------------------
VidPrevtyn Beta COVID-19 Regulatory approval
(Sanofi) (EU)
------------------- -------------------------- ------------------------
Triumeq HIV (paediatric) Positive CHMP opinion
(EU)
------------------- -------------------------- ------------------------
Regulatory submissions momelotinib MOMENTUM (myelofibrosis Regulatory acceptance
or acceptances with anaemia) (EU)
------------------- -------------------------- ------------------------
cabotegravir Pre-exposure prophylaxis, Regulatory submission
long-acting injectable (CN)
------------------- -------------------------- ------------------------
Phase III data Blenrep DREAMM-3 (3L+ multiple Phase III data
readouts or other myeloma) readout, did not
significant events meet primary endpoint
------------------- -------------------------- ------------------------
Jemperli RUBY (1L endometrial Positive phase
cancer) III data readout
(interim analysis)
------------------- -------------------------- ------------------------
gepotidacin EAGLE (uncomplicated Positive phase
urinary tract infection) III data readout
(interim analysis)
------------------- -------------------------- ------------------------
GSK3036656 (leucyl Tuberculosis Positive phase
t-RNA inhibitor) IIa data readout
------------------- -------------------------- ------------------------
Benlysta Systemic sclerosis Orphan Drug Designation
granted (US)
------------------- -------------------------- ------------------------
Anticipated news flow
Trial (indication,
Timing Medicine/vaccine presentation) Event
H1 2023 bepirovirsen B-Together (hepatitis Phase IIb data
B virus) readout
----------------------- -------------------------- ----------------------
daprodustat ASC (anaemia Regulatory decision
of chronic kidney (US, EU)
disease)
----------------------- -------------------------- ----------------------
Nucala Severe asthma Regulatory submission
(CN)
----------------------- -------------------------- ----------------------
momelotinib MOMENTUM (myelofibrosis Regulatory decision
with anaemia) (US)
----------------------- -------------------------- ----------------------
Jemperli RUBY (1L endometrial Regulatory submission
cancer) (US, EU)
----------------------- -------------------------- ----------------------
gepotidacin EAGLE (uncomplicated Regulatory submission
urinary tract infection) (US)
----------------------- -------------------------- ----------------------
MenABCWY (gen 1) Meningitis ABCWY Phase III data
vaccine candidate readout
----------------------- -------------------------- ----------------------
RSV older adult RSV, older adults Regulatory decision
vaccine candidate aged 60+ years (US)
----------------------- -------------------------- ----------------------
Shingrix Shingles, at-risk Regulatory decision
adults aged 18+ (JP)
years
----------------------- -------------------------- ----------------------
SKYCovione COVID-19 COVID-19 Regulatory decision
vaccine (EU)
----------------------- -------------------------- ----------------------
H2 2023 Nucala Nasal polyposis Regulatory submission
(CN, JP)
----------------------- -------------------------- ----------------------
Blenrep DREAMM-8 (2L+ multiple Phase III data
myeloma) readout
----------------------- -------------------------- ----------------------
Blenrep DREAMM-7 (2L+ multiple Phase III data
myeloma) readout
----------------------- -------------------------- ----------------------
Blenrep DREAMM-8 (2L+ multiple Regulatory submission
myeloma) (US, EU)
----------------------- -------------------------- ----------------------
Blenrep DREAMM-7 (2L+ multiple Regulatory submission
myeloma) (US, EU)
----------------------- -------------------------- ----------------------
Jemperli RUBY (1L endometrial Regulatory decision
cancer) (US)
----------------------- -------------------------- ----------------------
Zejula FIRST (1L maintenance Phase III data
ovarian cancer) readout
----------------------- -------------------------- ----------------------
cabotegravir Pre-exposure prophylaxis, Regulatory decision
long-acting injectable (EU)
----------------------- -------------------------- ----------------------
Vocabria HIV Regulatory decision
(CN)
----------------------- -------------------------- ----------------------
gepotidacin EAGLE (urogenital Phase III data
gonorrhoea) readout
----------------------- -------------------------- ----------------------
gepotidacin EAGLE (uncomplicated Regulatory submission
urinary tract infection) (EU)
----------------------- -------------------------- ----------------------
MenABCWY (gen 1) Meningitis ABCWY Regulatory submission
vaccine candidate (US)
----------------------- -------------------------- ----------------------
MenABCWY (gen 2) Meningitis ABCWY Phase II data readout
vaccine candidate
----------------------- -------------------------- ----------------------
RSV older adult RSV, older adults Regulatory decision
vaccine candidate aged (EU, JP)
60+ years
----------------------- -------------------------- ----------------------
RSV older adult RSV, older adults Phase III data
vaccine candidate aged readout
50-59 years
----------------------- -------------------------- ----------------------
RSV older adult RSV, older adults Regulatory submission
vaccine candidate aged (US, EU, JP)
50-59 years
----------------------- -------------------------- ----------------------
2024 linerixibat GLISTEN (cholestatic Phase III data
pruritus in primary readout
biliary cholangitis)
----------------------- -------------------------- ----------------------
linerixibat GLISTEN (cholestatic Regulatory submission
pruritus in primary (US, EU)
biliary cholangitis)
----------------------- -------------------------- ----------------------
Nucala Severe asthma Regulatory decision
(CN)
----------------------- -------------------------- ----------------------
Nucala Nasal polyposis Regulatory decision
(JP)
----------------------- -------------------------- ----------------------
Nucala MATINEE (chronic Phase III data
obstructive pulmonary readout
disease)
----------------------- -------------------------- ----------------------
Nucala MATINEE (chronic Regulatory submission
obstructive pulmonary (US, EU, CN, JP)
disease)
----------------------- -------------------------- ----------------------
Blenrep DREAMM-8 (2L+ multiple Regulatory decision
myeloma) (US, EU)
----------------------- -------------------------- ----------------------
Blenrep DREAMM-7 (2L+ multiple Regulatory decision
myeloma) (EU)
----------------------- -------------------------- ----------------------
cobolimab COSTAR (NSCLC) Phase III data
readout
----------------------- -------------------------- ----------------------
Jemperli RUBY (1L endometrial Regulatory decision
cancer) (EU)
----------------------- -------------------------- ----------------------
momelotinib MOMENTUM (myelofibrosis Regulatory decision
with anaemia) (EU)
----------------------- -------------------------- ----------------------
Zejula ZEAL (1L maintenance Phase III data
NSCLC) readout
----------------------- -------------------------- ----------------------
gepotidacin EAGLE (uncomplicated Regulatory decision
urinary tract infection) (US, EU)
----------------------- -------------------------- ----------------------
gepotidacin EAGLE (uncomplicated Regulatory submission
urinary tract infection) (JP)
----------------------- -------------------------- ----------------------
gepotidacin EAGLE (urogenital Regulatory submission
gonorrhoea) (US, EU)
----------------------- -------------------------- ----------------------
MenABCWY (gen 1) Meningitis ABCWY Regulatory decision
vaccine candidate (US)
----------------------- -------------------------- ----------------------
Pneumococcal 24 Pneumococcal (paediatric) Phase II data readout
valent (MAPS) vaccine
candidate
----------------------- -------------------------- ----------------------
RSV older adult RSV, older adults Regulatory decision
vaccine candidate aged (US, EU, JP)
50-59 years
----------------------- -------------------------- ----------------------
Refer to pages 58 to 66 for further details on several key medicines
and vaccines in development by therapy area.
Contents Page
Q4 2022 R&D pipeline highlights 6
Financial performance - 2022 9
Financial performance - three months to 31 December 2022 22
Cash generation 35
Returns to shareholders 37
Total and Adjusted results 39
Income statement 41
Statement of comprehensive income 42
Balance sheet 46
Statement of changes in equity 47
Cash flow statement - year ended 31 December 2022 48
Segment information 49
Legal matters 51
Additional information 52
Reconciliation of cash flow to movements in net debt 57
Net debt analysis 57
Free cash flow reconciliation 57
R&D commentary 58
Reporting definitions 67
Guidance, assumptions and cautionary statements 68
Contacts
GSK plc (LSE/NYSE:GSK) is a global biopharma company with a purpose
to unite science, technology, and talent to get ahead of disease
together. Find out more at www.gsk.com.
GSK enquiries:
Media Tim Foley +44 (0) 20 8047 (London)
5502
Kathleen Quinn +1 202 603 5003 (Washington)
Investor Relations Nick Stone +44 (0) 7717 618834 (London)
James Dodwell +44 (0) 7881 269066 (London)
Mick Readey +44 (0) 7990 339653 (London)
Joshua Williams +44 (0) 7385 415719 (London)
Jeff McLaughlin +1 215 589 3774 (Philadelphia)
Frances De Franco +1 215 751 4855 (Philadelphia)
Registered in England & Wales:
No. 3888792
Registered Office:
980 Great West Road
Brentford, Middlesex
TW8 9GS
Financial performance - 2022
Total results
The Total results for the Group are set out below.
2022 2021(a) Growth Growth
GBPm GBPm GBP% CER%
------- -------- ------- -------
Turnover 29,324 24,696 19 13
(9,554 (8,163
Cost of sales ) ) 17 16
------- -------- ------- -------
Gross profit 19,770 16,533 20 12
(8,372 (7,070
Selling, general and administration ) ) 18 13
(5,488 (5,019
Research and development ) ) 9 4
Royalty income 758 417 82 81
Other operating expense (235) (504)
------- -------- ------- -------
Operating profit 6,433 4,357 48 31
Finance income 76 14
Finance expense (879) (769)
Loss on disposal of interest in
associates - (36)
Share of after tax (loss)/profits
of associates and joint ventures (2) 33
------- -------- ------- -------
Profit before taxation 5,628 3,599 56 37
Taxation (707) (83)
Tax rate % 12.6% 2.3%
------- -------- ------- -------
Profit after taxation from continuing
operations 4,921 3,516 40 23
------- -------- ------- -------
Profit after taxation from discontinued
operations and
other gains/(losses) from the demerger 3,049 1,580
Remeasurement of discontinued operations
distributed to shareholders on
demerger 7,651 -
------- -------- ------- -------
Profit after taxation from discontinued
operations 10,700 1,580 >100 >100
------- -------- ------- -------
Total Profit after taxation for
the period 15,621 5,096 >100 >100
------- -------- ------- -------
Profit attributable to non-controlling
interests
from continuing operations 460 200
Profit attributable to shareholders
from
continuing operations 4,461 3,316
Profit attributable to non-controlling
interests
from discontinued operations 205 511
Profit attributable to shareholders
from
discontinued operations 10,495 1,069
------- -------- ------- -------
15,621 5,096 >100 >100
------- -------- ------- -------
Total Profit attributable to non-controlling
interests 665 711
Total Profit attributable to shareholders 14,956 4,385
------- --------
15,621 5,096
------- -------- ------- -------
Earnings per share from continuing
operations 110.8p 82.9p 34 18
Earnings per share from discontinued
operations 260.6p 26.7p >100 >100
------- -------- ------- -------
Total earnings per share 371.4p 109.6p >100 >100
------- -------- ------- -------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34) and the impact of Share Consolidation implemented
on 18 July 2022 (see page 56).
Adjusted results
The Adjusted results for the Group are set out below. Adjusted results
are from continuing operations and excludes the Consumer Healthcare
business (see details on page 55 ). Reconciliations between Total
results and Adjusted results for 2022 and 2021 are set out on pages
18 to 19 .
2022 % of Growth Growth
GBPm turnover GBP% CER%
-------- ---------- ------- -------
Turnover 29,324 100 19 13
Cost of sales (8,741) (29.8) 19 18
Selling, general and administration (8,128) (27.7) 20 15
Research and development (5,062) (17.3) 12 6
Royalty income 758 2.6 82 81
-------- ---------- ------- -------
Adjusted operating profit 8,151 27.8 26 14
Adjusted profit before tax 7,358 27 15
Adjusted profit after tax 6,220 28 16
Adjusted profit attributable
to shareholders 5,625 27 15
Adjusted earnings per share 139.7p 27 15
Operating profit by segment
2022 % of Growth Growth
GBPm turnover GBP% CER%
-------- ---------- ------- -------
Commercial Operations 13,590 46.3 19 10
Research and Development (5,060) 11 5
Segment profit 8,530 29.1 24 13
Corporate & other unallocated
costs (379)
-------- ---------- ------- -------
Adjusted operating profit 8,151 27.8 26 14
Turnover
Commercial Operations
2022
-------------------------
Growth Growth
GBPm GBP% CER%
------- ------- -------
HIV 5,749 20 12
Oncology 602 23 17
Immuno-inflammation, respiratory and other 2,609 29 20
------- ------- -------
8,960 23 15
Pandemic 2,309 >100 >100
------- ------- -------
Specialty Medicines 11,269 37 29
------- ------- -------
Meningitis 1,116 16 11
Influenza 714 5 (4)
Shingles 2,958 72 60
Established Vaccines 3,085 4 -
------- ------- -------
7,873 24 17
Pandemic Vaccines 64 (86) (86)
------- ------- -------
Vaccines 7,937 17 11
------- ------- -------
Respiratory 6,548 8 3
Other General Medicines 3,570 (1) (2)
------- ------- -------
General Medicines 10,118 5 1
------- ------- -------
Commercial Operations 29,324 19 13
------- ------- -------
US 14,542 22 10
Europe 6,348 18 19
International 8,434 14 14
------- ------- -------
Commercial Operations by region 29,324 19 13
------- ------- -------
Total turnover in 2022 was GBP 29,324 million, up 19 % at AER, 13
% at CER, reflecting strong performance in all three product groups.
Commercial Operations turnover, excluding COVID-19 solution sales,
grew 16 % at AER, 10% at CER. Specialty Medicines included GBP2,309
million sales of Xevudy, and double-digit growth across all therapy
areas. Vaccines growth reflected strong Shingrix and Meningitis performance,
partially offset by pandemic adjuvant sales in 2021 . General Medicines
reflected the recovery of the antibiotics market and the strong performance
of Trelegy in respiratory across all regions.
Specialty Medicines
Specialty Medicines sales were GBP 11,269 million, up 37 % at AER,
29 % at CER, driven by consistent double- digit growth in all therapy
areas. Specialty Medicines, excluding sales of Xevudy, were GBP8,960
million up 23 % at AER, 15 % at CER.
HIV
HIV sales were GBP5,749 million with growth of 20% at AER,12% at
CER. The performance benefited from strong patient demand for the
new HIV medicines (Dovato, Cabenuva, Juluca, Rukobia and Apretude),
which contributed approximately three quarters of the growth. US
pricing favourability and year-end inventory build together contributed
one third of the growth which was partially offset by International
tender decline.
New HIV products delivered sales of over two billion to GBP2,474
million, up 78% at AER, 67% at CER, representing 43% of the total
HIV portfolio compared to 29% last year. Growth was primarily driven
by sales of Dovato and Cabenuva. Dovato recorded sales of GBP1,375
million up 75% at AER and 65% at CER and Cabenuva, the first long
acting injectable for the treatment of HIV-1 infection, recorded
sales of GBP340 million. Apretude, the first long acting injectable
for the prevention of HIV-1 delivered sales of GBP41 million.
Oncology
Oncology sales were GBP 602 million, up 23 % at AER, 17 % at CER.
Zejula sales of GBP463 million were up 17% at AER, 12% at CER driven
by the first line indication, but with diagnosis and treatment rates
continuing to be impacted by the pandemic especially in the US. Sales
of Blenrep of GBP118 million grew 33% at AER, 25% at CER, and included
the impact of withdrawal from US market in Q4 2022.
Immuno-inflammation, Respiratory and Other
Immuno-inflammation, Respiratory and Other sales were GBP2,609 million
up 29% at AER, 20% at CER on strong performance of Benlysta and Nucala
. Benlysta sales were GBP1,146 million, up 31% at AER, 20% at CER,
representing strong underlying demand in US and worldwide . Nucala
sales were GBP1,423 million, up 25% at AER, 18% at CER, reflecting
continued strong patient demand and the launch of additional indications.
Pandemic
Sales of Xevudy were GBP 2,309 million, compared to GBP958 million
sales in 2021. Sales were delivered in all regions, comprising GBP828
million in the US, GBP456 million in Europe, and GBP1,025 million
in International.
Vaccines
Vaccines turnover was GBP7,937 million, up 17% at AER, 11% at CER
in total, and up 24% at AER, 17% at CER excluding pandemic adjuvant
sales. The performance reflected a favourable comparator, which was
impacted by COVID-19 related disruptions in several markets primarily
in H1 2021, and strong commercial execution of Shingrix, particularly
in the US and Europe.
Meningitis
Meningitis vaccines sales grew 16% at AER, 11% at CER to GBP1,116
million mainly driven by Bexsero up 16% at AER, 12% at CER to GBP753
million resulting from higher CDC (Center for Disease Control) demand
and increased share in the US. Menveo sales were also up 27% AER,
18% CER to GBP345 million, primarily driven by post-pandemic vaccination
catch-up and higher public demand in International, together with
favourable pricing mix and share gain in the US.
Shingles
Shingrix sales grew 72% at AER, 60% at CER to GBP2,958 million.
All regions grew significantly reflecting post-pandemic rebound,
strong uptake and new market launches with more than half of the
growth contributed from outside of the US. In the US, Shingrix grew
46% at AER, 32% at CER to GBP1,964 million due to higher non-retail
and retail demand and strong commercial execution. Germany and China
contributed strongly to the Shingrix growth. Shingrix was launched
in 9 markets during 2022 and is now available in 26 countries.
Influenza
Fluarix/FluLaval sales grew by 5% AER but decreased 4% CER to GBP714
million, primarily driven by lower post-pandemic demand in Europe
and the US, partly offset by lower expected returns in the US.
Established Vaccines
Established Vaccines grew 4% AER but was stable at CER to GBP3,085
million mainly resulting from supply constraints in MMR/V vaccines
and lower tender demand in International for Synflorix . This was
offset by hepatitis vaccines demand rebound in the US and Europe
and Boostrix post-pandemic demand recovery and increased share in
the US.
Pandemic Vaccines
Pandemic Vaccines decreased 86% AER and CER primarily reflecting
comparison to 2021 pandemic adjuvant sales to the US and Canadian
governments partly offset by GSK's share of 2022 contracted European
volumes related to the COVID-19 booster vaccine developed through
a collaboration with Sanofi Pasteur (Sanofi).
General Medicines
General Medicines sales in the year were GBP 10,118 million, up 5%
at AER, 1% at CER, with the impact of generic competition in US,
Europe and Japan offset by Trelegy growth in respiratory and the
post-pandemic rebound of the antibiotic market since H2 2021, in
Other General Medicines .
Respiratory
Respiratory sales were GBP6,548 million, up 8% at AER, 3% at CER.
The performance was driven by Trelegy sales of GBP1,729 million,
up 42% AER, 32% CER, including strong growth across all regions.
Advair/Seretide sales of GBP1,159 million decreased 15% at AER, 17%
at CER predominantly reflecting the adverse impact of generic competition,
with growth in certain International markets due to targeted promotion
offsetting the decrease.
Other General Medicines
Other General Medicines sales were GBP3,570 million, decreasing 1%
at AER, 2% at CER. Augmentin sales were GBP576 million, up 35% at
AER, 38% at CER, reflecting the post pandemic rebound of the antibiotic
market since H2 2021 in the International and Europe regions. This
partially offsets the ongoing adverse impact of generic competition,
and approximately two percentage points impact at AER and CER from
the divestment of cephalosporin products in Q4 2021.
By Region
US
In the US, sales were GBP14,542 million, up 22% at AER, 10% at CER.
Sales adjusted for COVID-19 solutions were up 24% AER, 12% CER. Sales
of Xevudy were GBP828 million.
In Specialty, HIV sales of GBP3,756 million were up 30% at AER, 17%
at CER. Growth benefited from strong patient demand for all new HIV
products, pricing favourability and year-end inventory build. New
HIV medicines (Dovato, Cabenuva, Juluca, Rukobia and Apretude) sales
were GBP1,685 million up 88% at AER, 70% at CER. Nucala in respiratory
and Benlysta in immunology both continued to grow double-digit and
reflected ongoing and strong patient demand. Oncology sales increased
14% at AER, 3% at CER with diagnosis and treatment rates continuing
to be impacted by the pandemic for Zejula, and the withdrawal of
Blenrep from the US market in Q4 2022.
Vaccine sales were GBP4,243 million, up 22% at AER, 10% at CER, excluding
the impact of pandemic adjuvant sales in 2021, sales increased 31%
at AER, 18% at CER. The performance was primarily driven by Shingrix
sales of GBP1,964 million up 46% at AER, 32% at CER, mostly due to
higher non-retail and retail demand and strong commercial execution.
Demand recovery in Established Vaccines and share gains in Meningitis
vaccines also contributed to growth.
General Medicines sales were GBP3,572 million up 10% at AER down
1% at CER. Trelegy was up 47% at AER, 32% at CER reflecting increased
patient demand and growth of the single inhaler triple therapy market
, and Flovent grew on launch of authorised generics in the year.
Overall, there was a three-percentage point reduction in growth of
US General Medicines due to prior period Returns and Rebates (RAR)
adjustments in the year.
Europe
In Europe, sales were GBP6,348 million, up 18% at AER, 19% at CER,
including COVID-19 solution sales of GBP513 million contributing
8 percentage points of growth at AER and CER.
In Specialty Medicines, HIV sales were GBP1,310 million up 10% at
AER, 10% at CER primarily driven by strong patient demand for Dovato,
Cabenuva and Juluca. Dovato delivered sales of GBP478 million, Juluca
GBP127 million and Cabenuva GBP40 million. Benlysta in immunology,
Nucala in respiratory, and Oncology medicines Zejula, Blenrep and
Jemperli all continued to show strong double-digit growth.
Vaccine sales were GBP1,884 million, up 31% at AER, 32% at CER. The
performance was driven by Shingrix sales of GBP688 million, >100%
at AER and CER, particularly in Germany. Pandemic adjuvant sales
of GBP57 million contributed four percentage points of growth at
AER and CER.
General Medicines sales of GBP2,079 million decreased 3% at AER and
CER, reflecting the ongoing impact of generic competitive pressures
on Seretide and the divestment in Q4 2021 of cephalosporin products
which caused one percentage point of drag on growth at AER and CER.
This was partly offset, however, by strong demand for Trelegy and
the growth of Augmentin following the post-pandemic rebound of the
antibiotic market since H2 2021.
International
International sales were GBP8,434 million, up 14% at AER and CER,
including Xevudy sales of GBP1,025 million. Sales grew 7% AER and
6% CER excluding sales of COVID-19 solutions.
In Specialty, HIV sales were GBP683 million, stable at AER and decreased
3% at CER, primarily driven by tender decline. Excluding tenders,
International grew driven by strong Dovato growth. Combined Tivicay
and Triumeq sales were GBP506 million, down 12% at AER and 15% at
CER. Nucala sales of GBP242 million grew 24% at AER and 28% at CER
reflecting strong market growth and patient uptake. Benlysta sales
of GBP114 million grew 44% at AER, 43% at CER reflecting growth in
biological market in Japan and inclusion on China's National Reimbursement
Drug List.
Vaccine sales were GBP1,810 million, down 3% at AER, 5% at CER, reflecting
an 11 percentage point drag at AER and CER from COVID-19 vaccine
adjuvant sales in 2021. Growth excluding COVID-19 solutions was driven
by strong Shingrix take-up in China, Canada and Japan more than offsetting
the impact of supply constraints in MMR/V vaccines and lower Synflorix
tender demand across several markets.
General Medicines sales were GBP4,467 million up 5% at AER and CER.
Respiratory sales of GBP1,955 million increased 10% at AER, 9% at
CER, with Trelegy sales up 47% at AER, 48% at CER reflecting strong
demand and inclusion on China's National Reimbursement Drug List
. Sales of Advair/Seretide were up 3% at AER, 1% at CER with the
adverse impact of generic competition offset by growth in certain
markets due to targeted promotion. Other General Medicines sales
of GBP2,512 million increased 1% at AER, 2% at CER, and reflected
growth of Augmentin following the post-pandemic rebound of the antibiotic
market since H2 2021, partially offset by generic competition and
price reductions in certain markets.
Operating performance
Cost of sales
Total cost of sales as a percentage of turnover was 32.6%, 0.5 percentage
points lower at AER and 0.9 percentage points higher in CER terms
than 2021.
Adjusted cost of sales as a percentage of turnover was 29.8%, 0.1
percentage points higher at AER and 1.3 percentage points higher
at CER compared with 2021. This primarily reflected higher sales
of lower margin Xevudy compared to 2021 which included higher margin
pandemic adjuvant sales, increasing cost of sales margin by 2.5 percentage
points at AER and CER, as well as the impact of increased commodity
prices and freight costs. This was partially offset by a favourable
mix primarily from increased sales of Shingrix in the US and Europe
and increased sales of HIV medicines in the US, lower inventory adjustments
and write offs in Vaccines and continued contribution from restructuring
savings.
Selling, general and administration
Total SG&A costs as a percentage of turnover were 28.6%, 0.1 percentage
points lower at AER and stable at CER compared to 2021. This included
a reduction in restructuring charges.
Adjusted SG&A costs as a percentage of turnover were 27.7%, 0.4 percentage
points higher at AER and 0.5 percentage points higher at CER than
in 2021. Adjusted SG&A costs increased 20% at AER, 15% at CER which
primarily reflected an increased level of launch investment in Specialty
Medicines particularly HIV and Vaccines including Shingrix to drive
post-pandemic recovery demand and support market expansion. The growth
in Adjusted SG&A also reflected an unfavourable comparison to a beneficial
legal settlement in 2021 as well as impairment provisions relating
to Russia and Ukraine. This growth was partly offset by the continuing
benefit of restructuring and tight control of ongoing costs.
Research and development
Total R&D expenditure was GBP5,488 million up 9% at AER, 4% at CER.
This included amortisation and impairments.
Adjusted R&D expenditure in the full-year increased by 12% at AER,
and 6% at CER, to GBP5,062 million. This reflected continued increased
investment across Vaccines clinical development, including investments
into our mRNA technology platforms, continued investment in the late-stage
portfolio and several early discovery programmes, as well as expenditure
related to our recent acquisition of Affinivax, Inc (Affinivax).
In addition, in Specialty Medicines, the level of R&D investment
increased to support the phase III respiratory programme for depemokimab,
a potential new medicine to treat severe asthma, and bepirovirsen,
our study in chronic hepatitis B, in preparation for the start of
the phase III trial. In Oncology, investment increased in our early-stage
immuno-oncology assets and in momelotinib, our potential new treatment
of myelofibrosis patients with anaemia, acquired as part of the recent
Sierra Oncology acquisition. These increases in investment were offset
by decreases related to the completion of several late-stage clinical
development programmes and reduced R&D investment in COVID-19 pandemic
solutions versus 2021.
Royalty income
Royalty income was GBP758 million (2021: GBP417 million), up 82%
at AER, 81% at CER, the increase primarily reflecting royalty income
from Gilead under the settlement and licensing agreement with Gilead
announced on 1 February 2022 and Gardasil royalty income increasing
to GBP446 million due to higher sales.
Other operating income/(expense)
Net other operating expense was GBP235 million (2021: GBP504 million)
reflecting accounting charges of GBP1,726 million (2021: GBP1,101
million) arising from the remeasurement of contingent consideration
liabilities and the liabilities for the Pfizer, Inc. (Pfizer) put
option and Pfizer and Shionogi & Co. Ltd (Shionogi) preferential
dividends in ViiV Healthcare. This included a remeasurement charge
of GBP1,431 million (2021: GBP1,026 million) for the contingent consideration
liability due to Shionogi, including the unwinding of the discount
for GBP410 million and a charge for GBP1,021 million primarily from
changes to exchange rates as well as adjustments to sales forecasts.
This was partly offset by GBP0.9 billion upfront income received
from the settlement with Gilead, fair value gain on investments including
GBP229 million on the retained stake in Haleon reflecting an increase
in share price since listing and milestone income from disposals.
Operating profit
Total operating profit from continuing operations was GBP6,433 million
compared with GBP4,357 million in 2021. This included the GBP0.9
billion upfront income received from the settlement with Gilead,
increased profits on turnover growth of 19% at AER, 13% at CER and
fair value gains on investments including GBP229 million on the retained
stake in Haleon, partly offset by higher remeasurement charges for
contingent consideration liabilities. Adjusted operating profit was
GBP8,151 million, 26% higher at AER and 14% at CER than 2021 on a
turnover increase of 13% at CER. The Adjusted operating margin of
27.8% was 1.5 percentage points higher at AER and 0.3 percentage
points higher at CER compared to 2021. This primarily reflected the
impact from low margin COVID-19 solutions sales (Xevudy), which reduced
Adjusted Operating profit growth by 3% AER and CER and reduced the
Adjusted operating margin by approximately 1.4 percentage points
at AER and approximately 1.3 percentage points at CER. This was offset
by operating leverage from strong sales growth, mix benefit, lower
inventory adjustments and write offs and higher royalty income.
Contingent consideration cash payments made to Shionogi and other
companies reduce the balance sheet liability and hence are not recorded
in the income statement. Total contingent consideration cash payments
in 2022 amounted to GBP1,137 million (2021: GBP856 million). These
included cash payments made to Shionogi of GBP1,100 million (2021:
GBP826 million).
Adjusted operating profit by business
Commercial Operations operating profit was GBP 13,590 million, up
19% at AER and 10% at CER on a turnover increase of 13% at CER. The
operating margin of 46.3% was 0.1 percentage points lower at AER,
1.2 percentage points lower at CER than in 2021. This primarily reflected
strong sales of lower margin Xevudy, increased investment behind
launches in Specialty Medicines including HIV and Vaccines plus higher
commodity, freight and distribution costs as well as an adverse comparison
to a favourable legal settlement in 2021. This was partly offset
by leverage from strong sales growth, mix and lower inventory adjustments
and write-offs, continued tight control of ongoing costs, benefits
from continued restructuring and increased royalty income from Biktarvy
and Gardasil sales.
R&D segment operating expenses were GBP5,060 million, up 11% at AER,
5% at CER, primarily reflecting increased investment in Vaccines
including priority investments for mRNA, late stage portfolio and
expenditure from the acquisition of Affinivax and in Specialty Medicines
in early stage HIV and depemokimab. This was partly offset by decreases
related to the completion of several late-stage clinical development
programmes and reduced R&D investment in COVID-19 pandemic solutions
versus 2021.
Net finance costs
Total net finance costs were GBP 803 million compared with GBP755
million in 2021. Adjusted n et finance costs were GBP 791 million
compared with GBP 752 million in 2021. The increase is mainly driven
by costs associated with the Sterling Notes repurchase in Q4 2022
and higher interest on tax offset by increased interest income due
to higher interest rates and larger cash balances as a result of
the Consumer Healthcare demerger.
Share of after tax profits of associates and joint ventures
The share of after tax loss of associates and joint ventures was
GBP2 million (2021: GBP33 million share of profit). In 2021, the
Group also reported a net loss on disposal of interests in associates
of GBP36 million, primarily driven by a loss on disposal of our interest
in the associate Innoviva Inc. (Innoviva).
Taxation
The charge of GBP 707 million represented an effective tax rate on
Total results of 12.6% (2021: 2.3%) and reflected the different tax
effects of the various Adjusting items. Included in 2021 was a credit
of GBP430 million resulting from the revaluation of deferred tax
assets following enactment of the proposed change of UK corporation
tax rates from 19% to 25%. Tax on Adjusted profit amounted to GBP1,138
million and represented an effective Adjusted tax rate of 15.5% (2021:
15.9%).
Issues related to taxation are described in Note 14, 'Taxation' in
the Annual Report 2021. The Group continues to believe it has made
adequate provision for the liabilities likely to arise from periods
that are open and not yet agreed by relevant tax authorities. The
ultimate liability for such matters may vary from the amounts provided
and is dependent upon the outcome of agreements with relevant tax
authorities.
Non-controlling interests
The allocation of Total profit from continuing operations to non-controlling
interests amounted to GBP460 million (2021: GBP200 million). The
increase was primarily due to an increased allocation of ViiV Healthcare
profits of GBP416 million (2021: GBP197 million), including the Gilead
upfront settlement income partly offset by increased credits for
remeasurement of contingent consideration liabilities, as well as
higher net profits in some of the Group's other entities with non-controlling
interests.
The allocation of Adjusted earnings from continuing operations to
non-controlling interests amounted to GBP595 million (2021: GBP441
million). The increase in allocation primarily reflected an increased
allocation of ViiV Healthcare profits of GBP551 million (2021: GBP438
million), as well as higher net profits in some of the Group's other
entities with non-controlling interests.
Earnings per share from continuing operations
Total EPS from continuing operations was 110.8p compared with 82.9p
in 2021. This primarily reflected the GBP0.9 billion upfront income
received from the settlement with Gilead, increased profits on turnover
growth of 13% at CER and fair value gains on investments including
the retained stake in Haleon, partly offset by higher remeasurement
charges for contingent consideration liabilities and an unfavourable
comparison due to a credit of GBP325 million to Taxation in Q2 2021
resulting from the revaluation of deferred tax assets.
Adjusted EPS was 139.7p compared with 110.3p in 2021, up 27% at AER,
15% at CER on a 13% CER turnover increase. Operating leverage from
growth in sales of Specialty Medicines including HIV and Vaccines,
beneficial mix and lower inventory adjustments and write-offs, higher
royalty income and a lower effective tax rate was partly offset by
increased investment behind launches in Specialty Medicines including
HIV and Vaccines plus higher supply chain costs, freight and distribution
costs and higher non-controlling interests. Growth in lower margin
COVID-19 solutions sales reduced Adjusted EPS growth by 4% AER and
3% CER.
Profit and earnings per share from discontinued operations
Discontinued operations include the Consumer Healthcare business
and certain Corporate costs directly attributable to the Consumer
Healthcare business. Profit after taxation from discontinued operations
amounted to GBP10,700 million (2021: GBP1,580 million). This includes
GBP10,084 million for the gain arising on the demerger of Consumer
Healthcare split between the amount distributed to shareholders on
demerger of GBP7,651 million and profit after taxation on discontinued
operations for the retained stake of GBP2,433 million. In addition,
the Profit after taxation from discontinued operations for the Consumer
Healthcare business was GBP621 million (2021: GBP1,580 million).
EPS from discontinued operations was 260.6 p, compared with 26.7
p in 2021. The increase primarily reflected the gain arising on the
demerger of the Consumer Healthcare business. For further details
see page 55 , discontinued operations.
Total earnings per share
Total EPS was 371.4p compared with 109.6p in 2021. The increase primarily
reflected the profit after taxation for discontinued operations recognised
on the Consumer Healthcare business demerger, upfront income received
from the settlement with Gilead, increased profits and fair value
gains on investments, partly offset by higher remeasurement charges
for contingent consideration liabilities and an unfavourable comparison
due to a credit of GBP397 million to Taxation in 2021.
Currency impact on 2022 results
The results for 2022 are based on average exchange rates, principally
GBP1/$1.24, GBP1/EUR1.17 and GBP1/Yen 161. Comparative exchange rates
are given on page 52. The period-end exchange rates were GBP1/$1.20,
GBP1/EUR1.13 and GBP1/Yen 159.
In 2022, turnover was up 19% at AER and 13% at CER. Total EPS from
continuing operations was 110.8p compared with 82.9p in 2021. Adjusted
EPS was 139.7p compared with 110.3p in 2021, up 27% at AER and 15%
at CER. The favourable currency impact primarily reflected the weakening
of Sterling against the US Dollar, partly offset by strengthening
in Sterling against the Euro and Japanese Yen. Exchange gains or
losses on the settlement of intercompany transactions had a negligible
impact on the twelve percentage point favourable currency impact
on Adjusted EPS.
Adjusting items
The reconciliations between Total results and Adjusted results for
2022 and 2021 are set out below.
Year ended 31 December 2022
Divest-
ments,
Profit significant
from legal
discon- Intangible Intangible Major Trans- and
Total tinued amort- impair- restruct- action- other Adjusted
results operations isation ment uring related items results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Turnover 29,324 29,324
Cost of sales (9,554) 648 102 45 18 (8,741)
------- ----------- ----------- ---------- -------- ------------ ---------
Gross profit 19,770 648 102 45 18 20,583
Selling, general
and
administration (8,372) 180 13 51 (8,128)
Research and
development (5,488) 91 296 39 (5,062)
Royalty income 758 758
Other operating
income/(expense) (235) 1,692 (1,457) -
------- ----------- ----------- ---------- -------- ------------ ---------
Operating profit 6,433 739 296 321 1,750 (1,388) 8,151
Net finance cost (803) 2 10 (791)
Share of after
tax
losses and joint
of associates
ventures (2) (2)
Profit before
taxation 5,628 739 296 323 1,750 (1,378) 7,358
Taxation (707) (150) (64) (87) (242) 112 (1,138)
Tax rate % 12.6% 15.5%
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
continuing
operations 4,921 589 232 236 1,508 (1,266) 6,220
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
discontinued
operations
and other
gains/(losses)
from
the demerger 3,049 (3,049)
Remeasurement of
discontinued
operations
distributed
to
shareholders on
demerger 7,651 (7,651)
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
discontinued
operations 10,700 (10,700)
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
after
taxation
for the period 15,621 (10,700) 589 232 236 1,508 (1,266) 6,220
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Profit
attributable
to
non-controlling
interest from
continuing
operations 460 135 595
Profit
attributable
to shareholders
from continuing
operations 4,461 589 232 236 1,373 (1,266) 5,625
Profit
attributable
to
non-controlling
interest from
discontinued
operations 205 (205)
Profit
attributable
to shareholders
from
discontinued
operations 10,495 (10,495)
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
15,621 (10,700) 589 232 236 1,508 (1,266) 6,220
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
attributable
to
non-controlling
interests 665 (205) 135 595
Total profit
attributable
to
shareholders 14,956 (10,495) 589 232 236 1,373 (1,266) 5,625
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
15,621 (10,700) 589 232 236 1,508 (1,266) 6,220
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Earnings per
share
from continuing
operations 110.8p 14.6p 5.8p 5.9p 34.1p (31.5)p 139.7p
Earnings per
share
from
discontinued
operations 260.6p (260.6)p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total earnings
per
share 371.4p (260.6)p 14.6p 5.8p 5.9p 34.1p (31.5)p 139.7p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Weighted average
number
of shares
(millions) 4,026 4,026
------- ---------
Year ended 31 December 2021(a)
Divest-
ments,
Profit significant
from legal
discon- Intangible Intangible Major Trans- and
Total tinued amort- impair- restruct- action- other Adjusted
results operations isation ment uring related items results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Turnover 24,696 24,696
Cost of sales (8,163) 660 102 28 27 (7,346)
------- ----------- ----------- ---------- -------- ------------ ---------
Gross profit 16,533 660 102 28 27 17,350
Selling, general
and
administration (7,070) 277 9 35 (6,749)
Research and
development (5,019) 101 347 45 1 (4,525)
Royalty income 417 417
Other operating
income/(expense) (504) 1,106 (602) -
------- ----------- ----------- ---------- -------- ------------ ---------
Operating profit 4,357 761 347 424 1,143 (539) 6,493
Net finance cost (755) 2 1 (752)
Loss on disposal
of
interest
in associates (36) 36 -
Share of after
tax
losses and joint
of associates
ventures 33 33
Profit before
taxation 3,599 761 347 426 1,143 (502) 5,774
Taxation (83) (153) (81) (79) (179) (343) (918)
Tax rate % 2.3% 15.9%
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
continuing
operations 3,516 608 266 347 964 (845) 4,856
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
discontinued
operations
and other
gains/(losses)
from
the demerger 1,580 (1,580)
Remeasurement of
discontinued
operations
distributed
to
shareholders on
demerger - -
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
discontinued
operations 1,580 (1,580)
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
after
taxation
for the period 5,096 (1,580) 608 266 347 964 (845) 4,856
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Profit
attributable
to
non-controlling
interest from
continuing
operations 200 241 441
Profit
attributable
to shareholders
from continuing
operations 3,316 608 266 347 723 (845) 4,415
Profit
attributable
to
non-controlling
interest from
discontinued
operations 511 (511)
Profit
attributable
to shareholders
from
discontinued
operations 1,069 (1,069)
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
5,096 (1,580) 608 266 347 964 (845) 4,856
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
attributable
to
non-controlling
interests 711 (511) 241 441
Total profit
attributable
to
shareholders 4,385 (1,069) 608 266 347 723 (845) 4,415
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
5,096 (1,580) 608 266 347 964 (845) 4,856
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Earnings per
share
from continuing
operations 82.9p 15.2p 6.6p 8.7p 18.1p (21.2)p 110.3p
Earnings per
share
from
discontinued
operations 26.7p (26.7)p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total earnings
per
share 109.6p (26.7)p 15.2p 6.6p 8.7p 18.1p (21.2)p 110.3p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Weighted average
number
of shares
(millions) 4,003 4,003
------- ---------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34) and the impact of Share Consolidation implemented
on 18 July 2022 (see page 56).
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred
in 2022 were GBP321 million (2021: GBP424 million), analysed as follows:
2022 2021
---------------------- ----------------------
Non- Non-
Cash cash Total Cash cash Total
GBPm GBPm GBPm GBPm GBPm GBPm
------ ------ ------ ------ ------ ------
Separation Preparation
restructuring
programme 177 110 287 353 59 412
Significant acquisitions 20 - 20 - - -
Legacy programmes 9 5 14 32 (20) 12
------ ------ ------ ------ ------ ------
206 115 321 385 39 424
------ ------ ------ ------ ------ ------
Cash charges of GBP177 million under the Separation Preparation programme
primarily arose from the restructuring of some administrative functions
as well as Global Supply Chain, R&D functions and commercial. The
non-cash charges of GBP110 million primarily reflected the write-down
of assets in administrative and manufacturing locations and impairment
of IT assets.
Total cash payments made in 2022 were GBP388 million (2021: GBP551
million), GBP332 million (2021: GBP428 million) relating to the Separation
Preparation restructuring programme, GBP17 million relating to significant
acquisitions (2021: GBPnil) and GBP39 million (2021: GBP123 million)
relating to other legacy programmes including the settlement of certain
charges accrued in previous quarters.
The analysis of Major restructuring charges by Income statement line
was as follows:
2022 2021
GBPm GBPm
------ ------
Cost of sales 102 102
Selling, general and administration 180 277
Research and development 39 45
Total Major restructuring costs from continuing
operations 321 424
------ ------
The benefit in 2022 from restructuring programmes was GBP 0.5 billion,
primarily relating to the Separation Preparation restructuring programme.
The Group initiated in Q1 2020 a Separation Preparation programme
to prepare for the separation of GSK into two companies. The programme
aims to:
-- Drive a common approach to R&D with improved capital allocation
Align and improve the capabilities and efficiency of global support
-- functions to support GSK
Further optimise the supply chain and product portfolio, including
-- the divestment of non-core assets
-- Prepare Consumer Healthcare to operate as a standalone company
The programme has delivered GBP0.9 billion of annual savings by 2022
and targets to deliver GBP1.0 billion by 2023, with total costs estimated
at GBP2.4 billion, of which GBP1.6 billion is expected to be cash
costs. The proceeds of divestments have largely covered the cash
costs of the programme.
Materially all of the Separation Preparation restructuring programme
has been included as part of continuing operations. The legacy Consumer
Healthcare Joint Venture integration programme is included as part
of discontinued operations.
Transaction-related adjustments
Transaction-related adjustments from continuing operations resulted
is a net charge of GBP1,750 million (2021: GBP1,143 million). This
included a net GBP1,726 million accounting charge for the remeasurement
of contingent consideration liabilities and the liabilities for the
Pfizer put option and Pfizer and Shionogi preferential dividends
in ViiV Healthcare.
2022 2021
Charge/(credit) GBPm GBPm
------ ------
Contingent consideration on former Shionogi-ViiV
Healthcare joint Venture
(including Shionogi preferential dividends) 1,431 1,026
ViiV Healthcare put options and Pfizer preferential
dividends 85 48
Contingent consideration on former Novartis Vaccines
business 193 27
Contingent consideration on acquisition of Affinivax 17 -
Other adjustments 24 42
------ ------
Total transaction-related charges 1,750 1,143
------ ------
The GBP 1,431 million charge relating to the contingent consideration
for the former Shionogi-ViiV Healthcare joint venture represented
an increase in the valuation of the contingent consideration due
to Shionogi, as a result of the unwind of the discount for GBP 410
million and a charge of GBP 1,021 million primarily from exchange
rates as well as adjustments to sales forecasts. The GBP 85 million
charge relating to the ViiV Healthcare put option and Pfizer preferential
dividends represented an increase in the valuation of the put option
primarily as a result of updated exchange rates as well as adjustments
to sales forecasts.
The ViiV Healthcare contingent consideration liability is fair valued
under IFRS. An explanation of the accounting for the non-controlling
interests in ViiV Healthcare is set out on page 40.
Divestments, significant legal charges, and other items
Divestments, significant legal charges and other items primarily
included the GBP922 million upfront settlement income received from
Gilead, a fair value gain on investments including GBP229 million
on the retained stake in Haleon as well as milestone income and gains
from a number of asset disposals, partly offset by certain other
Adjusting items.
Discontinued operations
From Q2 2020, the Group started to report additional costs to prepare
for establishment of the Consumer Healthcare business as an independent
entity ("Separation costs"). These are now presented as part of discontinued
operations. Total separation costs incurred in 2022 were GBP366 million
(2021: GBP314 million). This includes GBP103 million relating to
transaction costs incurred in connection with the demerger and preparatory
admission costs related to the listing of Haleon.
Total separation costs to date were GBP748 million including GBP141
million relating to transaction costs.
Financial performance - Q4 2022
Total results
The Total results for the Group are set out below.
Q4 2022 Q4 2021(a) Growth Growth
GBPm GBPm GBP% CER%
-------- ----------- ------- -------
Continuing Operations
Turnover 7,376 7,076 4 (3)
Cost of sales (2,238) (2,785) (20) (21)
-------- ----------- ------- -------
Gross profit 5,138 4,291 20 9
Selling, general and administration (2,438) (2,193) 11 4
Research and development (1,797) (1,376) 31 23
Royalty income 206 137 50 48
Other operating income/(expense) 759 (367)
-------- ----------- ------- -------
Operating profit 1,868 492 >100 >100
Finance income 26 -
Finance expense (270) (187)
Share of after tax (losses)/profits
of associates and
joint ventures 2 (2)
-------- ----------- ------- -------
Profit before taxation 1,626 303 >100 >100
Taxation (1) 117
Tax rate % 0.1% (38.6%)
-------- ----------- ------- -------
Profit after taxation from continuing
operations 1,625 420 >100 >100
Profit after taxation from discontinued
operations and
other gains/(losses) from the demerger (5) 510
Profit after taxation from discontinued
operations (5) 510 >(100) >(100)
-------- ----------- ------- -------
Profit after taxation for the period 1,620 930 74 53
-------- ----------- ------- -------
Profit attributable to non-controlling
interest from
continuing operations 125 (6)
Profit attributable to shareholders
from continuing
operations 1,500 426
Profit attributable to non-controlling
interest from
discontinued operations - 187
Profit attributable to shareholders
from discontinued
operations (5) 323
-------- ----------- ------- -------
1,620 930 74 53
-------- ----------- ------- -------
Total profit attributable to non-controlling
interest 125 181
Total profit attributable to shareholders 1,495 749
-------- -----------
1,620 930 74 53
-------- ----------- ------- -------
Earnings per share from continuing
operations 37.2p 10.6p >100 >100
Earnings per share from discontinued
operations (0.1)p 8.1p >(100) >(100)
Total earnings per share 37.1p 18.7p 98 75
-------- ----------- ------- -------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34) and the impact of Share Consolidation implemented
on 18 July 2022 (see page 56).
Adjusted results
The Adjusted results for the Group are set out below. Adjusted results
are from continuing operations and exclude the Consumer Healthcare
business (see details on page 39 ). Reconciliations between Total
results and Adjusted results for Q4 2022 and Q4 2021 are set out
on pages 31 and 32 .
Q4 2022 % of Growth Growth
GBPm turnover GBP% CER%
-------- ---------- ------- -------
Turnover 7,376 100 4 (3)
Cost of sales (2,030) (27.5) (22) (23)
Selling, general and administration (2,435) (33.0) 21 13
Research and development (1,522) (20.6) 18 11
Royalty income 206 2.7 50 48
-------- ---------- ------- -------
Adjusted operating profit 1,595 21.6 21 5
Adjusted profit before tax 1,362 21 3
Adjusted profit after tax 1,190 13 (3)
Adjusted profit attributable
to shareholders 1,041 10 (6)
Adjusted earnings per share 25.8p 10 (6)
Operating profit by segment
Q4 2022 % of Growth Growth
GBPm turnover GBP% CER%
-------- ---------- ------- -------
Commercial Operations 3,219 43.6 19 8
Research and Development (1,512) 18 10
Segment profit 1,707 23.1 21 6
Corporate & other unallocated
costs (112)
-------- ---------- ------- -------
Adjusted operating profit 1,595 21.6 21 5
Turnover
Commercial Operations
Q4 2022
------------------------
Growth Growth
GBPm GBP% CER%
------ ------- -------
HIV 1,678 33 21
Oncology 157 19 11
Immuno-inflammation, respiratory and other 721 33 22
------ ------- -------
2,556 32 21
Pandemic 125 (85) (85)
------ ------- -------
Specialty Medicines 2,681 (3) (11)
------ ------- -------
Meningitis 228 18 11
Influenza 276 13 2
Shingles 769 29 18
Established Vaccines 743 9 4
------ ------- -------
2,016 17 9
Pandemic Vaccines 58 (37) (37)
------ ------- -------
Vaccines 2,074 15 7
------ ------- -------
Respiratory 1,682 9 2
Other General Medicines 939 (2) (3)
------ ------- -------
General Medicines 2,621 5 -
Commercial Operations 7,376 4 (3)
------ ------- -------
US 3,624 3 (10)
Europe 1,655 9 7
International 2,097 3 3
------ ------- -------
Commercial Operations by region 7,376 4 (3)
------ ------- -------
Total turnover in the quarter was GBP7,376 million, up 4% at AER,
down 3% at CER reflecting strong sales of COVID-19 solutions in Q4
2021. Turnover grew 17% at AER, 9% at CER excluding sales of COVID-19
solutions. Specialty Medicines saw double digit growth of all therapy
areas (excluding COVID-19 solutions). Vaccines growth reflected strong
Shingrix and Meningitis performance, partially offset by an unfavourable
comparison to pandemic adjuvant sales in Q4 2021. General Medicines
reflected strong performance of Trelegy in all regions and continued
recovery of the antibiotics market.
Specialty Medicines
Total Specialty Medicines sales in the quarter were GBP2,681 million
down 3% at AER, 11% at CER reflecting strong Xevudy sales in Q4 2021.
Specialty Medicines sales in the quarter excluding Xevudy were GBP2,556
million, up 32% at AER, 21% at CER, driven by consistent growth in
all therapy areas.
HIV
HIV sales were GBP1,678 million with growth up 33% at AER, 21% at
CER in the quarter. The performance benefited from strong patient
demand for new HIV products ( Dovato, Cabenuva, Juluca, Rukobia and
Apretude ), which contributed approximately half of the growth. US
year-end inventory build contributed one third of the growth with
favourable US pricing and International tender phasing delivering
the remainder.
New HIV products delivered quarterly sales of GBP806 million up 87%
at AER, 70% at CER, representing 48% of the total HIV portfolio compared
to 34% in the same quarter last year. The growth was primarily driven
by sales of Dovato and Cabenuva. Dovato recorded sales of GBP438
million and growth of 72% AER, and 59% CER. Cabenuva, the first long
acting injectable for the treatment of human immunodeficiency virus
type-1 (HIV-1) infection, recorded sales of GBP129 million. Apretude,
the first long acting injectable for the prevention of HIV-1, delivered
sales of GBP21 million.
Oncology
Oncology sales in the quarter were GBP157 million, up 19% at AER,
11% at CER. Zejula sales of GBP125 million, were up 16% at AER, 8%
at CER, and Blenrep sales of GBP27 million were up 23% at AER, 14%
at CER, including impact of withdrawal from the US market in Q4 2022.
Immuno-inflammation, Respiratory and Other
Immuno-inflammation, Respiratory and Other sales were GBP721 million
up 33% at AER, 22% at CER on strong performance of Benlysta and Nucala.
Benlysta sales were GBP326 million, up 34% at AER, 20% at CER including
strong underlying demand in US and worldwide. Nucala sales were GBP395
million, up 27% at AER, 18% at CER on continued strong demand in
all regions.
Pandemic
Sales of Xevudy were GBP125 million, down 85% AER and CER versus
Q4 2021. This reflects strong sales at the end of 2021. In Q4 2022,
the majority of sales were contracted volumes in the International
region.
Vaccines
Vaccine sales were GBP2,074 million, up 15% at AER, 7% at CER in
total and up 17% at AER, 9% at CER excluding pandemic adjuvant sales.
The performance benefitted from post-pandemic rebound and strong
commercial execution of Shingrix .
Meningitis
Meningitis vaccines sales grew 18% at AER, 11% at CER to GBP228 million
mainly driven by Menveo up 60% at AER, 50% at CER to GBP77 million
resulting from higher public demand and post-pandemic vaccination
catch-up in International.
Bexsero sales were up 18% AER, 13% CER to GBP150 million, mostly
due to the implementation of a Meningitis B national immunisation
programme in France and higher private market demand in International.
In the US, Menveo and Bexsero share gains were offset by unfavourable
CDC purchase patterns.
Shingles
Shingrix sales grew 29% at AER, 18% at CER to GBP769 million reflecting
post-pandemic rebound, strong commercial execution and new launch
uptake in Europe and International. US sales grew 6% at AER but decreased
7% at CER to GBP480 million mainly driven by expected wholesaler
destocking after higher than usual inventory levels in Q2 and Q3
2022, partly offset by non-retail demand growth.
Influenza
Fluarix/FluLaval sales grew by 13% AER, 2% CER to GBP276 million,
primarily due to a favourable prior period RAR adjustment and lower
expected returns in the US, partly offset by lower post-pandemic
demand and competitive pressures in Europe.
Established Vaccines
Established vaccines grew by 9% AER, 4% at CER to GBP743 million
mainly driven by increased sales of divested vaccines partly offset
by Synflorix lower tender demand in International.
Pandemic Vaccines
Pandemic vaccines decreased by 37% AER and CER due to Q4 2021 pandemic
adjuvant contracted volumes to the Canadian government. In Q4 2022,
pandemic vaccines sales represent GSK's share of contracted European
volumes related to the COVID-19 booster vaccine developed through
a collaboration with Sanofi.
General Medicines
General Medicines sales in the quarter were GBP2,621 million, up
5% at AER, stable at CER, with the impact of generic competition
in US and Europe offset by Trelegy growth in respiratory and the
post-pandemic rebound of the antibiotic market in Other General Medicines.
Overall, there was a 5 percentage point reduction in growth at AER
and CER due to high prior period RAR adjustments in the comparator.
Respiratory
Respiratory sales were GBP1,682 million, up 9% at AER, 2% at CER.
The performance was driven by Trelegy sales of GBP457 million, up
30% at AER, 19% at CER with strong growth in all regions. Advair/Seretide
sales of GBP330 million continued to be eroded by generic competition,
decreasing by 1% at AER, 6% at CER.
Other General Medicines
Other General Medicines sales were GBP939 million, down 2% at AER,
3% at CER. Augmentin sales were GBP167 million, up 28% at AER, 30%
at CER reflecting the rebound of the antibiotic market post pandemic.
This was offset by the ongoing adverse impact of generic competition.
By Region
US
In the US, sales were GBP3,624 million, up 3% at AER, down 10% at
CER. Sales adjusted for COVID-19 solutions were up 23% at AER, 8%
at CER. There were GBP10 million sales of Xevudy and none for vaccine
pandemic adjuvant in the quarter, but GBP586 million sales of Xevudy
in Q4 2021 caused a drag on growth of 20 percentage point AER and
18 percentage points CER in the quarter.
In Specialty Medicines, HIV sales of GBP1,163 million were up 45%
at AER, 28% at CER. Performance benefited from strong patient demand
for new products (Dovato, Cabenuva, Juluca, Apretude and Rukobia),
year-end inventory build and favourable net price. New HIV medicines
delivered sales of GBP581 million up >100% at AER, 82% at CER.
Nucala and Benlysta both continued to grow double digits reflecting
ongoing strong demand. In Oncology, Zejula continues to be impacted
by lower diagnosis and treatment rates and Blenrep sales of GBP11
million in the quarter reflected the impact of withdrawal from US
market in Q4 2022.
Vaccine sales were GBP988 million, up 16% at AER, 2% at CER. Sales
of flu vaccines were strong, including the favourable impact of RAR
movements and delivery phasing from Q3, while Shingrix sales reflected
expected wholesaler inventory reductions and Established Vaccines
sales reflected CDC phasing.
General Medicines sales were GBP873 million up 6% at AER, down 7%
at CER, with continuing Trelegy demand growth, and Flovent continuing
to grow. Overall, there was a 14 percentage point reduction in growth
of US General Medicines due to prior period RAR adjustments in the
quarter.
Europe
In Europe, sales were GBP1,655 million, up 9% at AER, 7% at CER.
Sales of COVID-19 solutions in the quarter of GBP76 million compare
with GBP68 million in Q4 2021, so have minimal impact on total growth
in the quarter.
In Specialty Medicines, HIV sales were GBP344 million up 8% at AER,
6% at CER. The performance predominantly reflected strong patient
demand for Dovato with sales of GBP136 million during the period.
Benlysta in immunology, Nucala in respiratory, and the Oncology therapy
area all delivered strong double-digit growth in the quarter. Xevudy
sales of GBP19 million in the quarter were down on the corresponding
quarter last year reducing total Europe Specialty sales by 11 percentage
points at AER and CER.
Vaccine sales were GBP579 million, up 28% at AER, 26% at CER. Shingrix
sales of GBP204 million, up 76% at AER, 72% at CER, drove the growth
on strong commercial execution and new launches uptake partly offset
by influenza vaccines lower post-pandemic demand and competitive
pressures. Pandemic adjuvant sales of GBP57 million in the quarter
contributed 13 percentage points of growth at AER and CER.
General Medicines sales were GBP552 million up 1% at AER, and down
1% at CER. Strong demand for Anoro and Trelegy was offset by ongoing
generic competitive pressures and the impact of higher government
clawback rates.
International
International sales were GBP2,097 million, up 3% at AER and CER.
This included a drag of 9 percentage points AER and 10 percentage
points CER related to sales of COVID-19 solutions at AER and CER
in the corresponding quarter last year.
In Specialty Medicines, HIV sales were GBP171 million up 23% at AER,
17% at CER driven by Tivicay tender phasing, and strong Dovato growth.
Combined Tivicay and Triumeq sales were GBP125 million, up 16% at
AER and 10% at CER. Nucala sales of GBP68 million grew 24% at AER
and 29% at CER reflecting strong market growth and patient uptake.
Benlysta sales of GBP32 million grew 39% at AER and CER reflecting
growth in biological market in Japan and inclusion on China's National
Reimbursement Drug List.
Vaccine sales were GBP507 million, flat at AER, down 3% at CER, as
a result of a 21 percentage point drag at AER and CER from COVID-19
vaccine adjuvant sales in Q4 2021. Growth excluding COVID-19 solutions
was driven by Shingrix post-pandemic sales rebound, strong commercial
execution and new launches partly offset by Synflorix lower tender
demand.
General Medicines sales were GBP1,196 million up 5% at AER and CER.
Respiratory sales of GBP530 million were up 14% at AER, 13% at CER
including Trelegy sales of GBP71 million up 42% at AER and CER reflecting
strong demand and inclusion on China's National Reimbursement Drug
List. Other General Medicines sales of GBP666 million, were down
1% at AER and flat at CER, reflecting generic competition and price
reductions in certain markets offset by strong growth of Augmentin
on rebound of the antibiotic market post the pandemic.
Operating performance
Cost of sales
Total cost of sales as a percentage of turnover was 30.3%, 9.0 percentage
points at AER and 7.4 percentage points in CER terms lower than Q4
2021.
Adjusted cost of sales as a percentage of turnover was 27.5%, down
9.1 percentage points AER and 7.6 percentage points at CER compared
with Q4 2021. This primarily reflected lower sales of lower margin
COVID-19 solutions (Xevudy) compared to Q4 2021, reducing cost of
sales margin by 5.3 percentage points at AER and CER and lower inventory
adjustments and write offs in Vaccines as well as a favourable mix.
This was partly offset by increased supply chain costs including
the impact of increased commodity prices and freight costs.
Selling, general and administration
Total SG&A costs as a percentage of turnover were 33.1%, 2.1 percentage
points higher at AER and 2.2 percentage points higher at CER than
in Q4 2021 primarily reflected increased investment in the launch
of innovative vaccines and medicines partially offset by higher sales.
Adjusted SG&A costs as a percentage of turnover were 33.0%, 4.5 percentage
points higher at AER and 4.6 percentage points higher at CER. Adjusted
SG&A costs increased 21% at AER, 13% at CER to GBP2,435 million which
primarily reflected an increased level of launch investment in Specialty
Medicines particularly HIV and Vaccines including Shingrix to drive
post-pandemic recovery demand and support market expansion. The growth
in Adjusted SG&A also reflected increased freight and distribution
costs. This growth was partly offset by the continuing benefit of
restructuring and tight control of ongoing costs.
Research and development
Total R&D expenditure was GBP1,797 million up 31% at AER, 23% at
CER. This included amortisation and impairments.
Adjusted R&D expenditure increased in the quarter by 18% at AER and
11% at CER, to GBP1,522 million. We continue to see increased investment
in the Vaccines clinical development portfolio, particularly in our
mRNA technology platforms, RSV older adult vaccine candidate and
Men ABCWY, our Phase III meningitis programme, as well as in relation
to our recent acquisition of Affinivax.
I n the Specialty Medicines portfolio, there was increased investment
in Jemperli as we ramp up for new phase II/III trials in rectal and
colon cancer and in our early-stage immuno-oncology assets. In addition,
there was increased investment in our phase III respiratory programme
for depemokimab, a potential new medicine to treat severe asthma,
and in bepirovirsen, our study in chronic hepatitis B. This quarter
also reflects the impact of our recent decision to end our investment
in Cell and Gene therapy. These increases in investment were partly
offset by decreases related to the completion of several late-stage
clinical development programmes and reduced R&D investment in COVID-19
pandemic solutions versus Q4 2021.
Royalty income
Royalty income was GBP206 million (Q4 2021: GBP137 million), up 50%
at AER, 48% at CER, primarily reflecting royalty income from Gilead
under the settlement and licensing agreement with Gilead and higher
sales of Gardasil.
Other operating income/(expense)
Net other operating income was GBP759 million (Q4 2021: GBP367 million
expense) primarily reflecting fair value gains in investments including
GBP605 million on the retained stake in Haleon and milestone income
from disposals. In addition, there was an accounting gain of GBP3
million (Q4 2021: GBP612 million accounting charge) arising from
the remeasurement of contingent consideration liabilities and the
liabilities for the Pfizer, Inc. (Pfizer) put option and Pfizer and
Shionogi & Co. Ltd. (Shionogi) preferential dividends in ViiV Healthcare.
This included a remeasurement charge of GBP8 million (Q4 2021: GBP528
million accounting charge) for the contingent consideration liability
due to Shionogi, reflecting the unwinding of the discount for GBP110
million, offset by a gain of GBP102 million primarily from exchange
rates movement as well as adjustments to sales forecasts.
Operating profit
Total operating profit from continuing operations was GBP1,868 million
compared with GBP492 million in Q4 2021. The increase primarily reflected
fair value gains on investments including GBP605 million on the retained
stake in Haleon, milestone income from disposals and lower remeasurement
charges for contingent consideration liabilities.
Adjusted operating profit was GBP1,595 million, up 21% at AER and
5% at CER on a turnover decrease of 3% at CER. The Adjusted operating
margin of 21.6% was higher by 3.0 percentage points at AER and 1.5
percentage points at CER than in Q4 2021. This reflected the impact
from lower sales of COVID-19 solutions which reduced Adjusted Operating
profit growth by approximately 17% at AER, 15% at CER but did not
materially impact the Adjusted operating margin. The increase in
Adjusted Operating margin reflected lower inventory adjustments and
write offs in Vaccines, a favourable mix and higher royalty income,
partly offset by increased launch investment in SG&A in Specialty
Medicines including HIV and Vaccines.
Contingent consideration cash payments made to Shionogi and other
companies reduce the balance sheet liability and hence are not recorded
in the income statement. Total contingent consideration cash payments
in Q4 2022 amounted to GBP273 million (Q4 2021: GBP225 million).
These included cash payments made to Shionogi of GBP257 million (Q4
2021: GBP211 million).
Adjusted operating profit by business
Commercial Operations adjusted operating profit was GBP3,219 million,
up 19% at AER and 8% at CER on a turnover decrease of 3% at CER.
The operating margin of 43.6% was 5.5 percentage points higher at
AER and 4.0 percentage points higher at CER than in Q4 2021. This
primarily reflected lower sales of COVID-19 solutions sales low margin
Xevudy and pandemic adjuvant. This also reflected lower inventory
adjustments and write offs in Vaccines as well as a favourable mix
and higher royalty income. This was partly offset by increased launch
investment in SG&A in Specialty Medicines including HIV and Vaccines.
R&D segment operating expenses were GBP1,512 million, up 18% at AER
and 10% at CER, primarily reflecting increased investment in Vaccines
including priority investments for mRNA and late stage portfolio
and Specialty Medicines in early stage HIV and depemokimab, as well
as the impact of our recent decision to end our investment in Cell
and Gene therapy. This was partly offset by the completion of several
late-stage clinical development programmes, and reduced R&D investment
in COVID-19 pandemic solutions compared to Q4 2021.
Net finance costs
Total net finance costs were GBP244 million compared with GBP187
million in Q4 2021. Adjusted net finance costs were GBP235 million
compared with GBP186 million in Q4 2021. The increase primarily reflected
the net cost associated with the Sterling Notes repurchase in Q4
2022 and higher interest on tax offset by increased interest income
due to higher interest rates and larger cash balances as a result
of the Consumer Healthcare demerger.
Taxation
The charge of GBP 1 million represented an effective tax rate on
Total results of 0.1% (Q4 2021: (38.6%)) and reflected the different
tax effects of the various Adjusting items. Tax on Adjusted profit
amounted to GBP172 million and represented an effective Adjusted
tax rate of 12.6% (Q4 2021: 6.8%).
Issues related to taxation are described in Note 14, 'Taxation' in
the Annual Report 2021. The Group continues to believe it has made
adequate provision for the liabilities likely to arise from periods
that are open and not yet agreed by relevant tax authorities. The
ultimate liability for such matters may vary from the amounts provided
and is dependent upon the outcome of agreements with relevant tax
authorities.
Non-controlling interests
The allocation of Total profit from continuing operations to non-controlling
interests amounted to GBP125 million (Q4 2021: GBP6 million loss).
The increase was primarily due to an increased allocation of ViiV
Healthcare profits of GBP124 million (Q4 2021: GBP8 million loss)
including reduced credits for remeasurement of contingent consideration
liabilities.
The allocation of Adjusted earnings to non-controlling interests
amounted to GBP149 million (Q4 2021: GBP109 million). The increase
in allocation primarily reflected an increased allocation of ViiV
Healthcare profits of GBP148 million (Q4 2021: GBP107 million).
Earnings per share from continuing operations
Total EPS from continuing operations was 37.2p compared with 10.6p
in Q4 2021. The increase primarily reflected higher fair value gains
on investments including GBP605 million on the retained stake in
Haleon and lower remeasurement charges for contingent consideration
liabilities.
Adjusted EPS was 25.8p compared with 23.6p in Q4 2021, up 10% at
AER, down 6% at CER, on a 5% CER increase in Adjusted operating profit
primarily reflecting the impact from lower sales of COVID-19 solutions,
higher interest costs and a higher effective tax rate compared to
Q4 2021.
Profit and earnings per share from discontinued operations
Discontinued operations include the Consumer Healthcare business
and certain Corporate costs directly attributable to the Consumer
Healthcare business. Loss after taxation from discontinued operations
amounted to GBP5 million (Q4 2021: profit of GBP510 million).
Loss per share from discontinued operations was (0.1)p , compared
with EPS of 8.1 p in Q4 2021. For further details see page 55 , discontinued
operations.
Total earnings per share
Total EPS was 37.1p compared with 18.7 p in Q4 2021. The increase
primarily reflected higher fair value gains on investments including
on the retained stake in Haleon and lower remeasurement charges for
contingent consideration liabilities.
Currency impact on Q4 2022 results
The results for Q4 2022 are based on average exchange rates, principally
GBP1/$1.19, GBP1/EUR1.15 and GBP1/Yen 165. Comparative exchange rates
are given on page 52. The period-end exchange rates were GBP1/$1.20,
GBP1/EUR1.13 and GBP1/Yen 159.
In Q4 2022, turnover was up 4% at AER and down 3% at CER. Total EPS
from continuing operations was 37.2p compared with 10.6p in Q4 2021.
Adjusted EPS was 25.8p compared with 23.6p in Q4 2021, up 10% at
AER and down 6% at CER. The favourable currency impact primarily
reflected the weakening of Sterling against the US Dollar and the
euro, partly offset by the strengthening in the Japanese Yen. Exchange
gains or losses on the settlement of intercompany transactions had
a negligible impact on the sixteen percentage point favourable currency
impact on Adjusted EPS.
Adjusting items
The reconciliations between Total results and Adjusted results for
Q4 2022 and Q4 2021 are set out below.
Three months ended 31 December 2022
Divest-
ments,
Profit significant
from legal
discon- Intangible Intangible Major Trans- and
Total tinued amort- impair- restruct- action- other Adjusted
results operations isation ment uring related items results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Turnover 7,376 7,376
Cost of sales (2,238) 147 42 10 9 (2,030)
------- ----------- ----------- ---------- -------- ------------ ---------
Gross profit 5,138 147 42 10 9 5,346
Selling, general
and
administration (2,438) - - 3 13 (13) (2,435)
Research and
development (1,797) 16 240 19 (1,522)
Royalty income 206 206
Other operating
income/(expense) 759 (1) (17) (741) -
------- ----------- ----------- ---------- -------- ------------ ---------
Operating profit 1,868 163 240 63 6 (745) 1,595
Net finance cost (244) 1 8 (235)
Share of after
tax
losses and joint
of associates
ventures 2 2
Profit before
taxation 1,626 163 240 64 6 (737) 1,362
Taxation (1) (31) (54) (36) (5) (45) (172)
Tax rate % 0.1% 12.6%
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
continuing
operations 1,625 132 186 28 1 (782) 1,190
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
discontinued
operations
and other
gains/(losses)
from
the demerger (5) 5 -
Profit after
taxation
from
discontinued
operations (5) 5 -
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
after
taxation
for the period 1,620 5 132 186 28 1 (782) 1,190
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Profit
attributable
to
non-controlling
interest from
continuing
operations 125 24 149
Profit
attributable
to shareholders
from continuing
operations 1,500 132 186 28 (23) (782) 1,041
Profit
attributable
to
non-controlling
interest from
discontinued
operations - -
Profit
attributable
to shareholders
from
discontinued
operations (5) 5 -
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
1,620 5 132 186 28 1 (782) 1,190
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
attributable
to
non-controlling
interests 125 - 24 149
Total profit
attributable
to
shareholders 1,495 5 132 186 28 (23) (782) 1,041
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
1,620 5 132 186 28 1 (782) 1,190
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Earnings per
share
from continuing
operations 37.2p 3.3p 4.6p 0.7p (0.6)p (19.4)p 25.8p
Earnings per
share
from
discontinued
operations (0.1)p 0.1p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total earnings
per
share 37.1p 0.1p 3.3p 4.6p 0.7p (0.6)p (19.4)p 25.8p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Weighted average
number
of shares
(millions) 4,034 4,034
------- ---------
Three months ended 31 December 2021(a)
Divest-
ments,
Profit significant
from legal
discon- Intangible Intangible Major Trans- and
Total tinued amort- impair- restruct- action- other Adjusted
results operations isation ment uring related items results
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Turnover 7,076 7,076
Cost of sales (2,785) 169 18 6 (2,592)
------- ----------- ----------- ---------- -------- ------------ ---------
Gross profit 4,291 169 18 6 4,484
Selling, general
and
administration (2,193) 138 9 28 (2,018)
Research and
development (1,376) 25 64 3 (1) (1,285)
Royalty income 137 137
Other operating
income/(expense) (367) 591 (224) -
------- ----------- ----------- ---------- -------- ------------ ---------
Operating profit 492 194 64 159 606 (197) 1,318
Net finance cost (187) 1 (186)
Share of after
tax
losses and joint
of associates
ventures (2) (2)
Profit before
taxation 303 194 64 160 606 (197) 1,130
Taxation 117 (46) (13) (23) (78) (34) (77)
Tax rate % (38.6%) 6.8%
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
continuing
operations 420 148 51 137 528 (231) 1,053
------- ----------- ----------- ---------- -------- ------------ ---------
Profit after
taxation
from
discontinued
operations
and other
gains/(losses)
from
the demerger 510 (510) -
Profit after
taxation
from
discontinued
operations 510 (510) -
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
after
taxation
for the period 930 (510) 148 51 137 528 (231) 1,053
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Profit
attributable
to
non-controlling
interest from
continuing
operations (6) 115 109
Profit
attributable
to shareholders
from continuing
operations 426 148 51 137 413 (231) 944
Profit
attributable
to
non-controlling
interest from
discontinued
operations 187 (187) -
Profit
attributable
to shareholders
from
discontinued
operations 323 (323) -
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
930 (510) 148 51 137 528 (231) 1,053
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total profit
attributable
to
non-controlling
interests 181 (187) 115 109
Total profit
attributable
to
shareholders 749 (323) 148 51 137 413 (231) 944
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
930 (510) 148 51 137 528 (231) 1,053
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Earnings per
share
from continuing
operations 10.6p 3.7p 1.3p 3.4p 10.4p (5.8)p 23.6p
Earnings per
share
from
discontinued
operations 8.1p (8.1)p -
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Total earnings
per
share 18.7p (8.1)p 3.7p 1.3p 3.4p 10.4p (5.8)p 23.6p
------- ---------- ----------- ----------- ---------- -------- ------------ ---------
Weighted average
number
of shares
(millions) 4,007 4,007
------- ---------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34) and the impact of Share Consolidation implemented
on 18 July 2022 (see page 56).
Major restructuring and integration
Total Major restructuring charges from continuing operations incurred
in Q4 2022 were GBP63 million (Q4 2021: GBP159 million), analysed
as follows:
Q4 2022 Q4 2021
---------------------- ----------------------
Non- Non-
Cash cash Total Cash cash Total
GBPm GBPm GBPm GBPm GBPm GBPm
------ ------ ------ ------ ------ ------
Separation Preparation
restructuring
programme 100 (54) 46 105 41 146
Significant acquisitions 10 - 10 - - -
Legacy programmes 6 1 7 10 3 13
------ ------ ------ ------ ------ ------
116 (53) 63 115 44 159
------ ------ ------ ------ ------ ------
Cash charges of GBP100 million under the Separation Preparation programme
primarily arose from the restructuring of some administrative functions
as well as some global Supply Chain and R&D functions and commercial.
The non-cash credit of GBP54 million primarily reflected the net
profit on sale of assets in an R&D site partly offset by write-downs
of assets in administrative locations.
Total cash payments made in Q4 2022 were GBP115 million (Q4 2021:
GBP134 million), GBP92 million (Q4 2021: GBP109 million) relating
to the Separation Preparation restructuring programme, GBP12 million
relating to significant acquisitions (Q4 2021: GBPnil) and GBP11
million (Q4 2021: GBP25 million) relating to other legacy programmes
including the settlement of certain charges accrued in previous quarters.
The analysis of Major restructuring charges by Income statement line
is as follows:
Q4 2022 Q4 2021
GBPm GBPm
-------- --------
Cost of sales 42 18
Selling, general and administration 3 138
Research and development 19 3
Other operating (expenses)/income (1) -
Total major restructuring costs from continuing
operations 63 159
Materially all of the Separation Preparation restructuring programme
has been included as part of continuing operations. The legacy Consumer
Healthcare Joint Venture integration programme is now included as
part of discontinued operations.
Transaction-related adjustments
Transaction-related adjustments resulted in a net charge of GBP6
million (Q4 2021: GBP606 million). This included a net GBP3 million
accounting gain for the remeasurement of contingent consideration
liabilities and the liabilities for the Pfizer put option and Pfizer
and Shionogi preferential dividends in ViiV Healthcare.
Q4 2022 Q4 2021
Charge/(credit) GBPm GBPm
-------- --------
Contingent consideration on former Shionogi-ViiV
Healthcare joint venture
(including Shionogi preferential dividends) 8 528
ViiV Healthcare put options and Pfizer preferential
dividends (116) 101
Contingent consideration - former Novartis Vaccines
business 93 (17)
Contingent consideration - Affinivax 12 -
Other adjustments 9 (6)
-------- --------
Total transaction-related charges 6 606
-------- --------
The GBP 8 million charge relating to the contingent consideration
for the former Shionogi-ViiV Healthcare joint venture represented
an increase in the valuation of the contingent consideration due
to Shionogi, as a result of the unwind of the discount for GBP 110
million offset by a credit of GBP 102 million primarily from a reduction
due to exchange rates partly offset by adjustments to sales forecasts.
The GBP 116 million gain relating to the ViiV Healthcare put option
and Pfizer preferential dividends represented a decrease in the valuation
of the put option primarily as a result of updated exchange rates
as well as adjustments to sales forecasts.
The ViiV Healthcare contingent consideration liability is fair valued
under IFRS. An explanation of the accounting for the non-controlling
interests in ViiV Healthcare is set out on page 40.
Divestments, significant legal charges, and other items
Divestments, significant legal charges and other items primarily
include fair value gains on investments including GBP605 million
on the retained stake in Haleon and milestone income on disposals
and certain other Adjusting items. There was no net charge for significant
legal items in the quarter (Q4 2021: GBP37 million).
Discontinued operations
GSK satisfied the criteria in IFRS 5 for treating Consumer Healthcare
as a 'discontinued operation' effective from 30 June 2022, as it
was then expected that the carrying amount of the disposal group
will be recovered principally through disposal and a distribution,
it was available for distribution in its present condition (subject
only to the steps to be completed that are usual and customary for
the demerger of a business) and it was considered highly probable.
The demerger was completed on 18 July 2022, resulting in Consumer
Healthcare being classified as a discontinued operation.
From Q2 2020, the Group started to report additional costs to prepare
for establishment of the Consumer Healthcare business as an independent
entity ("Separation costs") and these have been presented as part
of discontinued operations. Total separation costs incurred in Q4
2022 were GBP5 million (Q4 2021: GBP130 million). This includes GBP1
million relating to transaction costs incurred in connection with
the demerger and preparatory admission costs related to the listing
of Haleon.
Cash generation
Cash flow
2022 2021 Q4 2022
GBPm GBPm GBPm
--------- --------- ---------
Cash generated from operations attributable
to
continuing operations ( GBP m) 7,944 7,249 2,101
Cash generated from operations attributable
to
discontinued operations (GBPm) 932 1,994 4
--------- --------- ---------
Total cash generated from operations
(GBPm) 8,876 9,243 2,105
--------- --------- ---------
Net cash inflow from operating activities
from
continuing operations 6,634 6,277 1,901
Net cash inflow from operating activities
from
discontinued operations 769 1,675 4
--------- --------- ---------
Total net cash generated from operating
activities (GBPm) 7,403 7,952 1,905
--------- --------- ---------
Free cash inflow from continuing operations*
( GBP m) 3,348 3,301 895
Free cash flow from continuing operations
growth (%) 1% (10)% (62)%
Free cash flow conversion from continuing
operations* (%) 75% 100% 60%
Total net debt** (GBPm) (17,197) (19,838) (17,197)
--------- --------- ---------
Free cash flow from continuing operations and free cash flow conversion
* are defined on page 67.
** Net debt is analysed on page 57.
2022
Cash generated from operations attributable to continuing operations
for the year was GBP7,944 million (2021: GBP7,249 million). The increase
primarily reflected a significant increase in operating profit including
the upfront income from the settlement with Gilead, favourable exchange
impact and favourable timing of collections, partly offset by unfavourable
timing of profit share payments for Xevudy sales, increased cash
contribution to the UK defined benefit pension scheme, increased
contingent consideration payments reflecting the Gilead settlement
in February 2022 and a higher increase in inventory.
Cash generated from operations attributable to discontinued operations
for 2022 was GBP932 million (2021: GBP1,994 million).
Total cash payments to Shionogi in relation to the ViiV Healthcare
contingent consideration liability in 2022 were GBP1,100 million
(2021: GBP826 million), of which GBP1,031 million was recognised
in cash flows from operating activities and GBP69 million was recognised
in contingent consideration paid within investing cash flows. These
payments are deductible for tax purposes.
Free cash inflow from continuing operations was GBP3,348 million
for 2022 (2021: GBP3,301 million). The increase primarily reflected
a significant increase in operating profit including the upfront
income from the settlement with Gilead, favourable exchange, reduced
purchases of intangible assets and favourable timing of collections.
This was partly offset by unfavourable timing of profit share payments
for Xevudy sales, increased cash contributions to pensions, increased
contingent consideration payments reflecting the Gilead settlement
in February 2022, higher tax payments, lower proceeds from disposals,
higher capital expenditure and a higher increase in inventory.
Q4 2022
Cash generated from operations attributable to continuing operations
for the quarter was GBP2,101 million (Q4 2021: GBP3,329 million).
The decrease primarily reflected unfavourable timing of profit share
payments for Xevudy, increased cash contributions to the UK defined
benefit pension schemes and unfavourable timing of returns and rebates
partly offset by an increase in operating profit, including beneficial
exchange and favourable timing of collections. Cash generated from
operations attributable to discontinued operations for the quarter
was GBP4 million (Q4 2021: GBP872 million).
Total cash payments to Shionogi in relation to the ViiV Healthcare
contingent consideration liability in the quarter were GBP257 million
(Q4 2021: GBP211 million), all of which was recognised in cash flows
from operating activities. These payments are deductible for tax
purposes.
Free cash inflow from continued operations was GBP895 million for
the quarter (Q4 2021: GBP2,344 million). The reduction primarily
reflected unfavourable timing of profit share payments for Xevudy
sales, increased cash contribution to pensions, unfavourable timing
of returns and rebates and reduced proceeds from and increased purchases
of intangible assets, partly offset by the increase in operating
profit including beneficial exchange, reduced tax payments, and favourable
timing of collections.
Total Net debt
At 31 December 2022, net debt was GBP17,197 million, compared with
GBP19,838 million at 31 December 2021, comprising gross debt of GBP20,987
million and cash and liquid investments of GBP3,790 million.
Net debt reduced by GBP2,641 million primarily due to GBP3,348 million
free cash flow from continuing operations, GBP238 million disposals
of equity investments and GBP7,177 million decrease from discontinued
operations as a result of the demerger primarily reflecting GBP7,112
million of pre-separation dividends attributable to GSK funded by
Consumer Healthcare debt. This was partly offset by purchases of
businesses of GBP3,108 million, net of cash acquired, reflecting
the acquisitions of Sierra Oncology and Affinivax, dividends paid
to shareholders of GBP3,467 million, net adverse exchange impacts
of GBP1,386 million from the translation of non-Sterling denominated
debt and exchange on other financing items and GBP143 million purchases
of equity investments.
At 31 December 2022, GSK had short-term borrowings (including overdrafts
and lease liabilities) repayable within 12 months of GBP3,952 million
with loans of GBP1,713 million repayable in the subsequent year.
Returns to shareholders
Quarterly dividends
The Board has declared a fourth dividend for 2022 of 13.75p per share
(Q4 2021: 28.75p(1) per share retrospectively adjusted) for the Share
Consolidation.
On 23 June 2021, at the new GSK Investor Update, GSK set out that
from 2022 a progressive dividend policy will be implemented guided
by a 40 to 60 percent pay-out ratio through the investment cycle.
The dividend policy, the total expected cash distribution, and the
respective dividend pay-out ratios for GSK remain unchanged.
GSK has previously stated that it expected to declare a 27p per share
dividend for the first half of 2022, a 22p per share dividend for
the second half of 2022 and a 45p per share dividend for 2023, (before
the share consolidation) but that these targeted dividends per share
would increase in step with the Share Consolidation to maintain the
same aggregate dividend pay-out in absolute Pound Sterling terms.
Accordingly, using the consolidation ratio, GSK's expected dividend
for the fourth quarter of 2022 converts to 13.75p per new ordinary
share, this results in an expected total dividend for the second
half of 2022 of 27.5p per new ordinary share. The expected dividend
for 2023 is 56.5p per new ordinary share, in line with the original
expectation converted for the Share Consolidation and rounded up.
Payment of dividends
The equivalent interim dividend receivable by ADR holders will be
calculated based on the exchange rate on 11 April 2023. An annual
fee of $0.03 per ADS (or $0.0075 per ADS per quarter) is charged
by the Depositary. The ex-dividend date will be 23 February 2023,
with a record date of 24 February 2023 and a payment date of 13 April
2023 .
Pence Pence
per per
share/ share/
Paid/ pre share post share
Payable consolidation consolidation GBPm
--------------- --------------- --------------- ------
2022
First interim 1 July 2022 14 17.50 704
Second interim 6 October 2022 13 16.25 654
12 January
Third interim 2023 11 13.75 555
Fourth interim 13 April 2023 11 13.75 555
--------------- --------------- ------
49 61.25 2,468
--------------- --------------- ------
Pence Pence
per per
share/ share/
Paid/ pre share post share
Payable consolidation consolidation GBPm
---------------- --------------- --------------- ------
2021
First interim 8 July 2021 19 23.75 951
Second interim 7 October 2021 19 23.75 951
13 January
Third interim 2022 19 23.75 952
Fourth interim 7 April 2022 23 28.75 1,157
--------------- --------------- ------
80 100 4,011
--------------- --------------- ------
The demerger of the Consumer Healthcare business was implemented
by GSK declaring an interim dividend in specie of Haleon plc shares.
The fair value of the distribution was GBP15.5 billion.
Adjusted for the Share Consolidation on 18 July 2022. For details
1 of the Share Consolidation see page 56.
Weighted average number of shares
2022 2021
millions millions(a)
---------- -------------
Weighted average number of shares -
basic 4,026 4,003
Dilutive effect of share options and
share awards 58 49
---------- -------------
Weighted average number of shares -
diluted 4,084 4,052
---------- -------------
Weighted average number of shares
Q4 2022 Q4 2021
millions millions(a)
---------- -------------
Weighted average number of shares -
basic 4,034 4,007
Dilutive effect of share options and
share awards 57 50
---------- -------------
Weighted average number of shares -
diluted 4,091 4,057
---------- -------------
(a) See page 56 for details of the Share Consolidation.
At 31 December 2022, 4,034 million shares (2021: 4,007 million) were
in free issue (excluding Treasury shares and shares held by the ESOP
Trusts). GSK made no share repurchases during the period. The company
issued 1.7 million shares under employee share schemes in the period
for proceeds of GBP 25 million (2021: GBP 21 million).
At 31 December 2022, the ESOP Trusts held 59.6 million GSK shares
against the future exercise of share options and share awards. The
carrying value of GBP353 million has been deducted from other reserves.
The market value of these shares was GBP861 million.
At 31 December 2022, the company held 217.1 million Treasury shares
at a cost of GBP3,797 million which has been deducted from retained
earnings.
Total and Adjusted results
Total reported results represent the Group's overall performance.
GSK also uses a number of adjusted, non-IFRS, measures to report
the performance of its business. Adjusted results and other non-IFRS
measures may be considered in addition to, but not as a substitute
for or superior to, information presented in accordance with IFRS.
Adjusted results are defined below and other non-IFRS measures are
defined on page 67 .
GSK believes that Adjusted results, when considered together with
Total results, provide investors, analysts and other stakeholders
with helpful complementary information to understand better the financial
performance and position of the Group from period to period, and
allow the Group's performance to be more easily compared against
the majority of its peer companies. These measures are also used
by management for planning and reporting purposes. They may not be
directly comparable with similarly described measures used by other
companies.
GSK encourages investors and analysts not to rely on any single financial
measure but to review GSK's quarterly results announcements, including
the financial statements and notes, in their entirety.
GSK is committed to continuously improving its financial reporting,
in line with evolving regulatory requirements and best practice.
In line with this practice, GSK expects to continue to review and
refine its reporting framework.
Adjusted results exclude the profits from discontinued operations
from the Consumer Healthcare business (see details on page 34) and
the following items in relation to our continuing operations from
Total results, together with the tax effects of all of these items:
amortisation of intangible assets (excluding computer software
-- and capitalised development costs)
impairment of intangible assets (excluding computer software) and
-- goodwill
-- major restructuring costs, which include impairments of tangible
assets and computer software, (under specific Board approved programmes
that are structural, of a significant scale and where the costs
of individual or related projects exceed GBP25 million), including
integration costs following material acquisitions
transaction-related accounting or other adjustments related to
-- significant acquisitions
-- proceeds and costs of disposal of associates, products and businesses;
significant settlement income; significant legal charges (net of
insurance recoveries) and expenses on the settlement of litigation
and government investigations; other operating income other than
royalty income, and other items
Costs for all other ordinary course smaller scale restructuring and
legal charges and expenses from continuing operations are retained
within both Total and Adjusted results.
As Adjusted results include the benefits of Major restructuring programmes
but exclude significant costs (such as significant legal, major restructuring
and transaction items) they should not be regarded as a complete
picture of the Group's financial performance, which is presented
in Total results. The exclusion of other Adjusting items may result
in Adjusted earnings being materially higher or lower than Total
earnings. In particular, when significant impairments, restructuring
charges and legal costs are excluded, Adjusted earnings will be higher
than Total earnings.
GSK has undertaken a number of Major restructuring programmes in
response to significant changes in the Group's trading environment
or overall strategy or following material acquisitions. Within the
Pharmaceuticals sector, the highly regulated manufacturing operations
and supply chains and long lifecycle of the business mean that restructuring
programmes, particularly those that involve the rationalisation or
closure of manufacturing or R&D sites are likely to take several
years to complete. Costs, both cash and non-cash, of these programmes
are provided for as individual elements are approved and meet the
accounting recognition criteria. As a result, charges may be incurred
over a number of years following the initiation of a Major restructuring
programme.
Significant legal charges and expenses are those arising from the
settlement of litigation or government investigations that are not
in the normal course and materially larger than more regularly occurring
individual matters. They also include certain major legacy matters.
Reconciliations between Total and Adjusted results, providing further
information on the key Adjusting items, are set out on pages 18,
19, 31 and 32.
GSK provides earnings guidance to the investor community on the basis
of Adjusted results. This is in line with peer companies and expectations
of the investor community, supporting easier comparison of the Group's
performance with its peers. GSK is not able to give guidance for
Total results as it cannot reliably forecast certain material elements
of the Total results, particularly the future fair value movements
on contingent consideration and put options that can and have given
rise to significant adjustments driven by external factors such as
currency and other movements in capital markets.
ViiV Healthcare
ViiV Healthcare is a subsidiary of the Group and 100% of its operating
results (turnover, operating profit, profit after tax) are included
within the Group income statement.
Earnings are allocated to the three shareholders of ViiV Healthcare
on the basis of their respective equity shareholdings (GSK 78.3%,
Pfizer 11.7% and Shionogi 10%) and their entitlement to preferential
dividends, which are determined by the performance of certain products
that each shareholder contributed. As the relative performance of
these products changes over time, the proportion of the overall earnings
allocated to each shareholder also changes. In particular, the increasing
proportion of sales of dolutegravir and cabotegravir-containing products
has a favourable impact on the proportion of the preferential dividends
that is allocated to GSK. Adjusting items are allocated to shareholders
based on their equity interests. GSK was entitled to approximately
83 % of the Total earnings and 82 % of the Adjusted earnings of ViiV
Healthcare for 2022.
As consideration for the acquisition of Shionogi's interest in the
former Shionogi-ViiV Healthcare joint venture in 2012, Shionogi received
the 10% equity stake in ViiV Healthcare and ViiV Healthcare also
agreed to pay additional future cash consideration to Shionogi, contingent
on the future sales performance of the products being developed by
that joint venture, dolutegravir and cabotegravir. Under IFRS 3 'Business
combinations', GSK was required to provide for the estimated fair
value of this contingent consideration at the time of acquisition
and is required to update the liability to the latest estimate of
fair value at each subsequent period end. The liability for the contingent
consideration recognised in the balance sheet at the date of acquisition
was GBP659 million. Subsequent remeasurements are reflected within
other operating income/(expense) and within Adjusting items in the
income statement in each period.
On 1 February 2022, ViiV Healthcare reached agreement with Gilead
to settle the global patent infringement litigation relating to the
commercialisation of Gilead's Biktarvy. Under the terms of the global
settlement and licensing agreement, Gilead made an upfront payment
of $1.25 billion to ViiV Healthcare in February 2022. In addition,
Gilead will also pay a 3% royalty on all future US sales of Biktarvy
and in respect of the bictegravir component of any other future bictegravir-containing
products sold in the US. These royalties will be payable by Gilead
to ViiV Healthcare from 1 February 2022 until the expiry of ViiV
Healthcare's US Patent No. 8,129,385 on 5 October 2027. Gilead's
obligation to pay royalties does not extend into any period of regulatory
paediatric exclusivity, if awarded .
Cash payments to settle the contingent consideration are made to
Shionogi by ViiV Healthcare each quarter, based on the actual sales
performance and other income of the relevant products in the previous
quarter. These payments reduce the balance sheet liability and hence
are not recorded in the income statement. The cash payments made
to Shionogi by ViiV Healthcare in 2022 were GBP1,100 million.
As the liability is required to be recorded at the fair value of
estimated future payments, there is a significant timing difference
between the charges that are recorded in the Total income statement
to reflect movements in the fair value of the liability and the actual
cash payments made to settle the liability.
Further explanation of the acquisition-related arrangements with
ViiV Healthcare are set out on pages 57 and 58 of the Annual Report
2021.
Financial information
Income statements
2022 2021(a) Q4 2022 Q4 2021(a)
GBPm GBPm GBPm GBPm
-------- -------- -------- -----------
TURNOVER 29,324 24,696 7,376 7,076
(9,554
Cost of sales ) (8,163) (2,238) (2,785)
-------- -------- -------- -----------
Gross profit 19,770 16,533 5,138 4,291
Selling, general and administration (8,372) (7,070) (2,438) (2,193)
Research and development (5,488) (5,019) (1,797) (1,376)
Royalty income 758 417 206 137
Other operating (expense)/income (235) (504) 759 (367)
-------- -------- -------- -----------
OPERATING PROFIT 6,433 4,357 1,868 492
Finance income 76 14 26 1
Finance expense (879) (769) (270) (188)
Loss on disposal of interests
in associates - (36) - -
Share of after tax (losses)/profits
of associates
and joint ventures (2) 33 2 (2)
-------- -------- -------- -----------
PROFIT BEFORE TAXATION 5,628 3,599 1,626 303
Taxation (707) (83) (1) 117
Tax rate % 12.6% 2.3% 0.1% (38.6%)
-------- -------- -------- -----------
PROFIT AFTER TAXATION FROM CONTINUING
OPERATIONS 4,921 3,516 1,625 420
-------- -------- -------- -----------
Profit after taxation from discontinued
operations
and other gains from the demerger 3,049 1,580 (5) 510
Remeasurement of discontinued
operations
distributed to shareholders on
demerger 7,651 - - -
PROFIT AFTER TAXATION FROM
DISCONTINUED OPERATIONS (b) 10,700 1,580 (5) 510
-------- -------- -------- -----------
PROFIT AFTER TAXATION FOR THE
PERIOD 15,621 5,096 1,620 930
-------- -------- -------- -----------
Profit attributable to non-controlling
interests
from continuing operations 460 200 125 (6)
Profit attributable to shareholders
from
continuing operations 4,461 3,316 1,500 426
Profit attributable to non-controlling
interests
from discontinued operations 205 511 - 187
Profit attributable to shareholders
from
discontinued operations 10,495 1,069 (5) 323
-------- -------- -------- -----------
15,621 5,096 1,620 930
-------- -------- -------- -----------
Profit attributable to non-controlling
interests 665 711 125 181
Profit attributable to shareholders 14,956 4,385 1,495 749
-------- -------- -------- -----------
15,621 5,096 1,620 930
-------- -------- -------- -----------
EARNINGS PER SHARE FROM CONTINUING
OPERATIONS 110.8p 82.9p 37.2p 10.6p
EARNINGS PER SHARE FROM DISCONTINUED
OPERATIONS 260.6p 26.7p (0.1)p 8.1p
-------- -------- -------- -----------
TOTAL EARNINGS PER SHARE 371.4p 109.6p 37.1p 18.7p
-------- -------- -------- -----------
Diluted earnings per share from
continuing
operations 109.2p 81.8p 36.6p 10.5p
Diluted earnings per share from
discontinued
operations 257.0p 26.4p (0.1)p 8.0p
Total diluted earnings per share 366.2p 108.2p 36.5p 18.5p
-------- -------- -------- -----------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34) and the impact of Share Consolidation implemented
on 18 July 2022 (see page 56).
(b) See page 56 for further details on profit after tax from discontinued
operations.
Statement of comprehensive income
2022 2021(a) Q4 2022 Q4 2021(a)
GBPm GBPm GBPm GBPm
-------- -------- -------- -----------
Total profit for the year 15,621 5,096 1,620 930
Items that may be reclassified
subsequently to continuing operations
income statement:
Exchange movements on overseas
net assets
and net investment hedges 113 (339) 218 (130)
Reclassification of exchange
movements on
liquidation or disposal of overseas
subsidiaries
and associates 2 (25) (8) (15)
Fair value movements on cash
flow hedges (18) 5 (31) 9
Reclassification of cash flow
hedges to income
statement 14 12 2 1
Deferred tax on fair value movements
on cash
flow hedges 9 (8) (8) (7)
120 (355) 173 (142)
-------- -------- -------- -----------
Items that will not be reclassified
to continuing operations income
statement:
Exchange movements on overseas
net assets
of non-controlling interests (28) (20) (23) (19)
Fair value movements on equity
investments (754) (911) (106) (616)
Tax on fair value movements on
equity
investments 56 131 (5) 33
Remeasurement (losses)/gains
on defined benefit plans (786) 940 (104) 606
Tax on remeasurement losses/(gains)
on defined
benefit plans 211 (223) 34 (158)
Fair value movements on cash
flow hedges (6) - (6) -
-------- -------- -------- -----------
(1,307) (83) (210) (154)
-------- -------- -------- -----------
Other comprehensive expense for
the
period from continuing operations (1,187) (438) (37) (296)
Other comprehensive income for
the
period from discontinued operations 356 101 23 1
-------- -------- -------- -----------
Total comprehensive income for
the period 14,790 4,759 1,606 635
-------- -------- -------- -----------
Total comprehensive income for
the year attributable to:
Shareholders 14,153 4,068 1,504 473
Non-controlling interests 637 691 102 162
-------- -------- -------- -----------
14,790 4,759 1,606 635
-------- -------- -------- -----------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34).
Specialty Medicines turnover - year ended 31 December 2022
Total US Europe International
------------------ ----------------- ----------------- -----------------
Growth Growth Growth Growth
---------- ---------- ---------- ----------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
HIV 5,749 20 12 3,756 30 17 1,310 10 10 683 - (3)
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Dolutegravir
products 5,191 14 6 3,311 19 8 1,239 8 8 641 - (3)
Tivicay 1,381 - (7) 823 8 (3) 273 (5) (4) 285 (14) (19)
Triumeq 1,799 (4) (11) 1,217 2 (8) 361 (20) (19) 221 (8) (9)
Juluca 636 23 14 494 26 13 127 14 15 15 15 8
Dovato 1,375 75 65 777 82 64 478 58 59 120 >100 >100
Rukobia 82 82 64 79 84 65 3 50 50 - - -
Cabenuva 340 >100 >100 294 >100 >100 40 >100 >100 6 >100 >100
Apretude 41 - - 41 - - - - - - - -
Other 95 (25) (29) 31 (37) (45) 28 (22) (22) 36 (14) (17)
Oncology 602 23 17 313 14 3 253 30 31 36 80 75
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Zejula 463 17 12 235 11 - 194 19 20 34 70 75
Blenrep 118 33 25 66 8 (3) 52 86 86 - - -
Jemperli 21 >100 >100 13 >100 >100 8 >100 >100 - - -
Other - - - (1) - - (1) - - 2 - -
Immuno-
inflammation,
respiratory
and other 2,609 29 20 1,830 29 16 366 13 13 413 45 47
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Benlysta 1,146 31 20 949 31 18 83 22 22 114 44 43
Nucala 1,423 25 18 881 28 15 300 17 17 242 24 28
Other 40 >100 >100 - - - (17) - - 57 >100 >100
Specialty
Medicines
excluding
pandemic 8,960 23 15 5,899 29 16 1,929 13 13 1,132 14 13
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Pandemic 2,309 >100 >100 828 38 24 456 >100 >100 1,025 >100 >100
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Xevudy 2,309 >100 >100 828 38 24 456 >100 >100 1,025 >100 >100
Specialty
Medicines 11,269 37 29 6,727 30 17 2,385 34 35 2,157 69 70
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Specialty Medicines turnover - three months ended 31 December 2022
Total US Europe International
----------------- ----------------- ------------------ -----------------
Growth Growth Growth Growth
---------- ---------- ------------ ----------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
HIV 1,678 33 21 1,163 45 28 344 8 6 171 23 17
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
Dolutegravir
products 1,482 24 13 998 31 16 320 5 3 164 26 21
Tivicay 373 16 5 235 17 3 69 (3) (6) 69 38 28
Triumeq 479 1 (8) 340 10 (3) 83 (25) (26) 56 (3) (5)
Juluca 192 34 22 155 41 25 32 7 7 5 67 33
Dovato 438 72 59 268 89 68 136 46 43 34 79 79
Rukobia 26 73 47 25 79 57 1 - - - - -
Cabenuva 129 >100 >100 112 >100 >100 15 >100 >100 2 100 >100
Apretude 21 - - 21 - - - - - - - -
Other 20 (35) (35) 7 (42) (42) 8 (27) (18) 5 (38) (50)
Oncology 157 19 11 78 15 - 67 29 27 12 - 8
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
Zejula 125 16 8 63 24 6 52 16 11 10 (17) 8
Blenrep 27 23 14 11 (35) (47) 16 >100 >100 - - -
Jemperli 5 >100 >100 5 >100 >100 - (100) (100) - - -
Other - - - (1) - - (1) - - 2 - -
Immuno-
inflammation,
respiratory
and other 721 33 22 512 31 16 94 11 9 115 77 78
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
Benlysta 326 34 20 271 33 18 23 28 22 32 39 39
Nucala 395 27 18 242 28 13 85 27 22 68 24 29
Other - >100 >100 (1) - - (14) - - 15 >100 >100
Specialty
Medicines
excluding
pandemic 2,556 32 21 1,753 39 23 505 11 9 298 38 35
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
Pandemic 125 (85) (85) 10 (98) (99) 19 (72) (74) 96 (45) (41)
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
Xevudy 125 (85) (85) 10 (98) (99) 19 (72) (74) 96 (45) (41)
Specialty
Medicines 2,681 (3) (11) 1,763 (5) (16) 524 - (2) 394 1 1
----- ---- ---- ----- ---- ---- ---- ----- ----- ----- ---- ----
Vaccines turnover - year ended 31 December 2022
Total US Europe International
----------------- ------------------- ----------------- -----------------
Growth Growth Growth Growth
---------- ------------ ---------- ----------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Meningitis 1,116 16 11 573 26 14 362 2 3 181 18 20
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Bexsero 753 16 12 333 32 19 337 3 4 83 20 23
Menveo 345 27 18 240 20 8 20 (5) (10) 85 67 71
Other 18 (54) (54) - - - 5 - - 13 (62) (62)
Influenza 714 5 (4) 549 20 9 57 (44) (44) 108 (11) (16)
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Fluarix, FluLaval 714 5 (4) 549 20 9 57 (44) (44) 108 (11) (16)
Shingles 2,958 72 60 1,964 46 32 688 >100 >100 306 >100 >100
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Shingrix 2,958 72 60 1,964 46 32 688 >100 >100 306 >100 >100
Established
Vaccines 3,085 4 - 1,157 18 7 720 3 4 1,208 (7) (8)
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Infanrix,
Pediarix 594 9 3 327 8 (3) 131 13 13 136 10 6
Boostrix 594 14 7 360 33 20 138 (1) (1) 96 (14) (15)
Hepatitis 571 24 16 343 28 15 142 30 31 86 5 (1)
Rotarix 527 (3) (3) 95 (14) (23) 122 3 5 310 (1) 1
Synflorix 305 (15) (15) - - - 34 (24) (22) 271 (13) (14)
Priorix, Priorix
Tetra, Varilrix 188 (28) (29) 10 - - 97 (22) (22) 81 (40) (43)
Cervarix 117 (15) (20) - - - 22 (12) (8) 95 (16) (22)
Other 189 26 26 22 (8) (17) 34 55 45 133 28 32
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Vaccines
excluding
pandemic 7,873 24 17 4,243 31 18 1,827 27 28 1,803 8 6
Pandemic vaccines 64 (86) (86) - (100) (100) 57 - - 7 (97) (97)
Pandemic adjuvant 64 (86) (86) - (100) (100) 57 - - 7 (97) (97)
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Vaccines 7,937 17 11 4,243 22 10 1,884 31 32 1,810 (3) (5)
----- ---- ---- ----- ----- ----- ----- ---- ---- ----- ---- ----
Vaccines turnover - three months ended 31 December 2022
Total US Europe International
----------------- ------------------ ---------------- ------------------
Growth Growth Growth Growth
---------- ------------ ---------- ------------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Meningitis 228 18 11 73 16 (2) 101 17 15 54 20 22
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Bexsero 150 18 13 36 3 (14) 92 19 18 22 47 47
Menveo 77 60 50 37 32 14 8 - (13) 32 >100 >100
Other 1 (95) (95) - - - 1 - - - (100) (100)
Influenza 276 13 2 217 67 48 29 (63) (64) 30 (17) (22)
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Fluarix, FluLaval 276 13 2 217 67 48 29 (63) (64) 30 (17) (22)
Shingles 769 29 18 480 6 (7) 204 76 72 85 >100 >100
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Shingrix 769 29 18 480 6 (7) 204 76 72 85 >100 >100
Established
Vaccines 743 9 4 218 7 (6) 188 9 7 337 10 8
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Infanrix,
Pediarix 111 (3) (10) 48 (17) (31) 30 20 16 33 3 6
Boostrix 131 15 5 73 33 15 31 (3) (3) 27 - (4)
Hepatitis 126 12 2 64 3 (10) 36 9 3 26 44 39
Rotarix 147 4 1 21 (22) (30) 32 - - 94 13 11
Synflorix 68 (26) (28) - - - 10 (23) (23) 58 (27) (29)
Priorix, Priorix
Tetra, Varilrix 50 (7) (13) 9 - - 24 (14) (18) 17 (35) (38)
Cervarix 26 13 9 - - - 7 >100 >100 19 (5) (15)
Other 84 >100 >100 3 >100 >100 18 >100 >100 63 >100 >100
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Vaccines excluding
pandemic 2,016 17 9 988 17 2 522 15 13 506 21 18
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Pandemic vaccines 58 (37) (37) - (100) (100) 57 - - 1 (99) (100)
Pandemic adjuvant 58 (37) (37) - (100) (100) 57 - - 1 (99) (100)
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
Vaccines 2,074 15 7 988 16 2 579 28 26 507 - (3)
----- ---- ---- ---- ----- ----- ---- ---- ---- ---- ----- -----
General Medicines turnover - year ended 31 December 2022
Total US Europe International
------------------ ----------------- ----------------- -----------------
Growth Growth Growth Growth
---------- ---------- ---------- ----------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Respiratory 6,548 8 3 3,209 10 (1) 1,384 3 3 1,955 10 9
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Arnuity Ellipta 56 19 9 48 20 10 - - - 8 14 -
Anoro Ellipta 483 (4) (9) 233 (16) (24) 165 11 11 85 10 10
Avamys/Veramyst 321 8 6 - - - 65 - 2 256 10 8
Flixotide/Flovent 545 23 15 353 28 16 74 7 7 118 18 16
Incruse Ellipta 196 (4) (10) 104 (5) (14) 64 (9) (7) 28 8 -
Relvar/Breo
Ellipta 1,145 2 (2) 498 2 (8) 347 4 4 300 - 2
Seretide/Advair 1,159 (15) (17) 308 (37) (43) 287 (11) (11) 564 3 1
Trelegy Ellipta 1,729 42 32 1,253 47 32 236 18 19 240 47 48
Ventolin 771 7 2 411 5 (5) 116 7 8 244 11 10
Other Respiratory 143 4 6 1 - - 30 11 7 112 2 5
Other General
Medicines 3,570 (1) (2) 363 10 (1) 695 (14) (13) 2,512 1 2
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
Dermatology 376 (6) (5) (1) - - 107 (18) (18) 270 - 1
Augmentin 576 35 38 - - - 151 22 23 425 41 44
Avodart 330 (1) (3) - - - 107 (9) (8) 223 5 -
Lamictal 511 7 1 265 14 3 109 (3) (3) 137 2 -
Other 1,777 (10) (10) 99 - (9) 221 (31) (31) 1,457 (7) (6)
General Medicines 10,118 5 1 3,572 10 (1) 2,079 (3) (3) 4,467 5 5
------ ---- ---- ----- ---- ---- ----- ---- ---- ----- ---- ----
General Medicines turnover - three months ended 31 December 2022
Total US Europe International
----------------- ---------------- ---------------- -----------------
Growth Growth Growth Growth
---------- ---------- ---------- ----------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
----- ---- ---- ---- ---- ---- ---- ---- ---- ----- ---- ----
Respiratory 1,682 9 2 778 5 (7) 374 7 5 530 14 13
----- ---- ---- ---- ---- ---- ---- ---- ---- ----- ---- ----
Arnuity Ellipta 11 (15) (23) 9 (25) (33) - - - 2 100 100
Anoro Ellipta 138 12 5 68 8 (5) 47 21 18 23 10 10
Avamys/Veramyst 82 15 11 - - - 14 (7) - 68 21 14
Flixotide/Flovent 134 25 15 75 34 18 22 - (5) 37 28 24
Incruse Ellipta 39 (20) (27) 16 (41) (48) 16 - - 7 17 -
Relvar/Breo
Ellipta 249 (11) (15) 72 (38) (47) 94 9 6 83 8 10
Seretide/Advair 330 (1) (6) 105 (13) (23) 75 (4) (5) 150 9 7
Trelegy Ellipta 457 30 19 321 29 14 65 20 20 71 42 42
Ventolin 206 12 4 111 16 1 33 6 3 62 9 11
Other Respiratory 36 - - 1 - - 8 14 - 27 (10) (3)
Other General
Medicines 939 (2) (3) 95 8 (5) 178 (10) (11) 666 (1) -
----- ---- ---- ---- ---- ---- ---- ---- ---- ----- ---- ----
Dermatology 99 (2) (2) (1) - - 28 (10) (13) 72 1 3
Augmentin 167 28 30 - - - 44 16 13 123 34 37
Avodart 82 4 (1) - - - 26 (10) (10) 56 12 4
Lamictal 132 8 - 71 15 2 29 7 4 32 (3) (6)
Other 459 (12) (12) 25 (7) (19) 51 (29) (29) 383 (10) (9)
General Medicines 2,621 5 - 873 6 (7) 552 1 (1) 1,196 5 5
----- ---- ---- ---- ---- ---- ---- ---- ---- ----- ---- ----
Commercial Operations turnover
Total US Europe International
------------------ ------------------ ----------------- -----------------
Growth Growth Growth Growth
---------- ---------- ---------- ----------
GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER% GBPm GBP% CER%
------ ---- ---- ------ ---- ---- ----- ---- ---- ----- ---- ----
Year ended
31 December
2022 29,324 19 13 14,542 22 10 6,348 18 19 8,434 14 14
------ ---- ---- ------ ---- ---- ----- ---- ---- ----- ---- ----
Three months
ended
31 December
2022 7,376 4 (3) 3,624 3 (10) 1,655 9 7 2,097 3 3
------ ---- ---- ------ ---- ---- ----- ---- ---- ----- ---- ----
Balance sheet
31 December 31 December
2022 2021
GBPm GBPm
----------- -----------
ASSETS
Non-current assets
Property, plant and equipment 8,933 9,932
Right of use assets 687 740
Goodwill 7,046 10,552
Other intangible assets 14,318 30,079
Investments in associates and joint ventures 74 88
Other investments 1,467 2,126
Deferred tax assets 5,658 5,218
Derivative financial instruments - 18
Other non-current assets 1,194 1,676
----------- -----------
Total non-current assets 39,377 60,429
----------- -----------
Current assets
Inventories 5,146 5,783
Current tax recoverable 405 486
Trade and other receivables 7,053 7,860
Derivative financial instruments 190 188
Current equity investments 4,087 -
Liquid investments 67 61
Cash and cash equivalents 3,723 4,274
Assets held for sale 98 22
----------- -----------
Total current assets 20,769 18,674
----------- -----------
TOTAL ASSETS 60,146 79,103
----------- -----------
LIABILITIES
Current liabilities
Short-term borrowings (3,952) (3,601)
Contingent consideration liabilities (1,289) (958)
Trade and other payables (16,263) (17,554)
Derivative financial instruments (183) (227)
Current tax payable (471) (489)
Short-term provisions (652) (841)
Total current liabilities (22,810) (23,670)
----------- -----------
Non-current liabilities
Long-term borrowings (17,035) (20,572)
Corporation tax payable (127) (180)
Deferred tax liabilities (289) (3,556)
Pensions and other post-employment benefits (2,579) (3,113)
Other provisions (532) (630)
Derivative financial instruments - (1)
Contingent consideration liabilities (5,779) (5,118)
Other non-current liabilities (899) (921)
----------- -----------
Total non-current liabilities (27,240) (34,091)
----------- -----------
TOTAL LIABILITIES (50,050) (57,761)
----------- -----------
NET ASSETS 10,096 21,342
----------- -----------
EQUITY
Share capital 1,347 1,347
Share premium account 3,440 3,301
Retained earnings 4,363 7,944
Other reserves 1,448 2,463
----------- -----------
Shareholders' equity 10,598 15,055
Non-controlling interests (502) 6,287
----------- -----------
TOTAL EQUITY 10,096 21,342
----------- -----------
Statement of changes in equity
Share- Non-
Share Share Retained Other holder's controlling Total
capital premium earnings reserves equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------- --------- ---------- ---------- ---------- ------------- ---------
At 1 January 2022 1,347 3,301 7,944 2,463 15,055 6,287 21,342
Profit for the year 14,956 14,956 665 15,621
Other comprehensive
income/(expense)
for
the year (89) (714) (803) (28) (831)
---------- ---------- ---------- ------------- ---------
Total comprehensive
income/(expense)
for the year 14,867 (714) 14,153 637 14,790
---------- ---------- ---------- ------------- ---------
Distributions to
non-controlling
interests (1,409) (1,409)
Non-cash distribution
to non-controlling
interest (2,960) (2,960)
Contributions from
non-controlling
interests 8 8
Changes to
non-controlling
interest (20) (20)
Deconsolidation of
former subsidiaries (3,045) (3,045)
Dividends to
shareholders (3,467) (3,467) (3,467)
Non-cash dividend to
shareholder (15,526) (15,526) (15,526)
Realised after tax
losses on disposal
or liquidation of
equity investments 14 (14) -
Share of associates
and joint ventures
realised profits on
disposal of equity
investments 7 (7) -
Shares issued - 25 25 25
Write-down on shares
held by ESOP
Trusts (911) 911 -
Shares acquired by
ESOP Trusts 114 1,086 (1,200) -
Share-based incentive
plans 357 357 357
Tax on share-based
incentive plans (8) (8) (8)
Hedging gain/loss
after
taxation transferred
to non-financial
assets 9 9 9
At 31 December 2022 1,347 3,440 4,363 1,448 10,598 (502) 10,096
--------- --------- ---------- ---------- ---------- ------------- ---------
At 1 January 2021 1,346 3,281 6,755 3,205 14,587 6,221 20,808
Profit for the year 4,385 4,385 711 5,096
Other comprehensive
(expense)/
income for the year 454 (771) (317) (20) (337)
---------- ---------- ---------- ------------- ---------
Total comprehensive
income for the
year 4,839 (771) 4,068 691 4,759
---------- ---------- ---------- ------------- ---------
Distributions to
non-controlling
interests (642) (642)
Contributions from
non-controlling
interests 7 7
Dividends to
shareholders (3,999) (3,999) (3,999)
Shares issued 1 20 21 21
Realised after tax
profits on disposal
of equity
investments 132 (132) -
Share of associates
and joint ventures
realised profits on
disposal of equity
investments 7 (7) -
Write-down on shares
held by ESOP
Trusts (168) 168 -
Share-based incentive
plans 367 367 367
Transaction with
non-controlling
interests 10 10
Tax on share-based
incentive plans 11 11 11
At 31 December 2021 1,347 3,301 7,944 2,463 15,055 6,287 21,342
--------- --------- ---------- ---------- ---------- ------------- ---------
Cash flow statement - year ended 31 December 2022
(amounts presented are from continuing operations unless otherwise
specified)
2022 2021(a)
GBPm GBPm
-------- --------
Profit after tax from continuing operations 4,921 3,516
Tax on profits 707 83
Share of after tax losses/(profits) of associates
and joint ventures 2 (33)
Loss on disposal of interests in associates - 36
Net finance expense 803 755
Depreciation, amortisation and other adjusting
items 2,298 2,247
Decrease/(Increase) in working capital 67 (500)
Contingent consideration paid (1,058) (742)
Increase in other net liabilities (excluding
contingent consideration paid) 204 1,887
-------- --------
Cash generated from operations attributable
to continuing operations 7,944 7,249
Taxation paid (1,310) (972)
-------- --------
Net cash inflow from continuing operating
activities 6,634 6,277
-------- --------
Cash generated from operations attributable
to discontinued operations 932 1,994
Taxation paid from discontinued operations (163) (319)
-------- --------
Net operating cash flows attributable to discontinued
operations 769 1,675
-------- --------
Total net cash inflows from operating activities 7,403 7,952
-------- --------
Cash flow from investing activities
Purchase of property, plant and equipment (1,143) (950)
Proceeds from sale of property, plant and equipment 146 132
Purchase of intangible assets (1,115) (1,704)
Proceeds from sale of intangible assets 196 641
Purchase of equity investments (143) (162)
Purchase of business net of cash acquired (3,108) -
Proceeds from sale of equity investments 238 202
Contingent consideration paid (79) (114)
Disposal of businesses (43) (17)
Investment in associates and joint ventures (1) (1)
Proceeds from disposal of associates and joint
ventures - 277
Interest received 64 14
Decrease in liquid investments 1 18
Dividends from associates and joint ventures 6 9
-------- --------
6 9
Net cash outflow from continuing investing
activities (4,981) (1,655)
Net investing cash flows attributable to discontinued
operations (3,791) (122)
-------- --------
Total net cash outflow from investing activities (8,772) (1,777)
-------- --------
Cash flow from financing activities
Issue of share capital 25 20
Decrease in long-term loans (569) -
Net repayment of short-term loans (4,053) (2,003)
Repayment of lease liabilities (202) (181)
Interest paid (848) (772)
Dividends paid to shareholders (3,467) (3,999)
Distributions to non-controlling interests (521) (239)
Contributions from non-controlling interests 8 7
Other financing items 376 41
-------- --------
Net cash outflow from continuing financing
activities (9,251) (7,126)
Net financing cash flows attributable to discontinued
operations 10,074 (463)
-------- --------
Total net cash inflow/(outflow) from financing
activities 823 (7,589)
-------- --------
Increase/(decrease) in cash and bank overdrafts
in the year (546) (1,414)
-------- --------
Cash and bank overdrafts at beginning of the
year 3,819 5,262
Exchange adjustments 152 (30)
Increase/(decrease) in cash and bank overdrafts (546) (1,414)
-------- --------
Cash and bank overdrafts at end of the year 3,425 3,818
-------- --------
Cash and bank overdrafts at end of the year
comprise:
Cash and cash equivalents 3,723 4,274
3,723 4,274
Overdrafts (298) (456)
3,425 3,818
-------- --------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger
of the Consumer Healthcare business
(see page 34).
Segment information
Operating segments are reported based on the financial information
provided to the Chief Executive Officer and the responsibilities
of the GSK Leadership Team (GLT). GSK has revised its operating segments
from Q1 2022 and from Q2 2022. Previously, GSK reported results under
four segments: Pharmaceuticals; Pharmaceuticals R&D; Vaccines and
Consumer Healthcare. For the first quarter 2022, GSK reported results
under three segments: Commercial Operations; Total R&D and Consumer
Healthcare. From Q2 2022, GSK reports results under two segments
from continuing operations as the demerger of the Consumer Healthcare
segment was completed on 18 July 2022. Members of the GLT are responsible
for each segment. Comparative information in this announcement has
been retrospectively restated on a consistent basis. The Consumer
Healthcare segment is presented entirely as discontinued operations
and therefore no segment information is presented.
R&D investment is essential for the sustainability of the business.
However, for segment reporting the Commercial operating profits exclude
allocations of globally funded R&D.
The Total R&D segment is the responsibility of the Chief Scientific
Officer and is reported as a separate segment. The operating costs
of this segment includes R&D activities across Specialty Medicines,
including HIV and Vaccines. It include R&D and some SG&A costs relating
to regulatory and other functions.
The Group's management reporting process allocates intra-Group profit
on a product sale to the market in which that sale is recorded, and
the profit analyses below have been presented on that basis.
Turnover by segment
2022 2021 Growth Growth
GBPm GBPm GBP% CER%
------- ------- ------- -------
Commercial Operations (total
turnover) 29,324 24,696 19 13
------- ------- ------- -------
Operating profit by segment
2022 2021(a) Growth Growth
GBPm GBPm GBP% CER%
-------- -------- ------- -------
Commercial Operations 13,590 11,467 19 10
Research and Development (5,060) (4,567) 11 5
Segment profit 8,530 6,900 24 13
Corporate and other unallocated
costs (379) (407)
-------- -------- ------- -------
Adjusted operating profit 8,151 6,493 26 14
Adjusting items (1,718) (2,136)
-------- -------- ------- -------
Total operating profit 6,433 4,357 48 31
Finance income 76 14
Finance costs (879) (769)
Loss on disposal of interests
in associates - (36)
Share of after tax (losses)/profits
of
associates and joint ventures (2) 33
Profit before taxation from
continuing operations 5,628 3,599 56 37
-------- -------- ------- -------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34).
Adjusting items reconciling segment profit and operating profit comprise
items not specifically allocated to segment profit. These include
impairment and amortisation of intangible assets, major restructuring
costs, which include impairments of tangible assets and computer
software, transaction-related adjustments related to significant
acquisitions, proceeds and costs of disposals of associates, products
and businesses, significant legal charges and expenses on the settlement
of litigation and government investigations, other operating income
other than royalty income and other items.
Turnover by segment
Q4 2022 Q4 2021 Growth Growth
GBPm GBPm GBP% CER%
-------- -------- ------- ----------------
Commercial Operations (total
turnover) 7,376 7,076 4 (3)
-------- -------- ------- ----------------
Operating profit by segment
Q4 2022 Q4 2021(a) Growth Growth
GBPm GBPm GBP% CER%
-------- ----------- ------- ----------------
Commercial Operations 3,219 2,697 19 8
Research and Development (1,512) (1,281) 18 10
Segment profit 1,707 1,416 21 6
Corporate and other unallocated
costs (112) (98)
-------- ----------- ------- ----------------
Adjusted operating profit 1,595 1,318 21 5
Adjusting items 273 (826)
-------- ----------- ------- ----------------
Total operating profit 1,868 492 >100 >100
Finance income 26 1
Finance costs (270) (188)
Share of after tax (losses)/profits
of
associates and joint ventures 2 (2)
Profit before taxation from
continuing operations 1,626 303 >100 >100
-------- ----------- ------- ----------------
(a) The 2021 comparative results have been restated on a consistent
basis from those previously published to reflect the demerger of
the Consumer Healthcare business
(see page 34).
Legal matters
The Group is involved in significant legal and administrative proceedings,
principally product liability, intellectual property, tax, anti-trust,
consumer fraud and governmental investigations, which are more fully
described in the 'Legal Proceedings' note in the Annual Report 2021.
At 31 December 2022, the Group's aggregate provision for legal and
other disputes (not including tax matters described on page 16 was
GBP0.2 billion (31 December 2021: GBP0.2 billion).
The Group may become involved in significant legal proceedings in
respect of which it is not possible to meaningfully assess whether
the outcome will result in a probable outflow, or to quantify or
reliably estimate the liability, if any, that could result from ultimate
resolution of the proceedings. In these cases, the Group would provide
appropriate disclosures about such cases, but no provision would
be made.
The ultimate liability for legal claims may vary from the amounts
provided and is dependent upon the outcome of litigation proceedings,
investigations and possible settlement negotiations. The Group's
position could change over time, and, therefore, there can be no
assurance that any losses that result from the outcome of any legal
proceedings will not exceed by a material amount the amount of the
provisions reported in the Group's financial accounts.
Significant legal developments since the date of the Q3 2022 results:
Zantac
On 6 December 2022, the court presiding over the federal Multi-District
Litigation (MDL) proceeding granted Defendants' Daubert motions,
finding that Plaintiffs' experts' causation opinions regarding whether
Zantac can cause the five cancers at issue in the MDL (liver, bladder,
pancreatic, esophageal, and stomach) are unreliable and thus inadmissible.
Without expert causation opinions, the MDL Court granted summary
judgment to GSK and the other brand defendants. The MDL Court found
that "there is no scientist outside this litigation who concluded
ranitidine causes cancer, and the plaintiffs' scientists within this
litigation systemically utilized unreliable methodologies," and failed
to use "consistent, objective, science-based standards for the even-handed
evaluation of data." This ruling effectively dismissed approximately
2,200 filed cases in the MDL and is binding on the 46,697 claimants
in the registry (32,970 mapped to GSK).
A 13th additional epidemiologic study (Joung et al. 2022) was recently
released. When comparing ranitidine users to other H2 receptor antagonist
(H2RA) users, Joung found no association with overall cancer or any
individual cancer studied (esophageal, gastric, colorectal, liver,
pancreatic, lung, kidney, bladder, and thyroid) and no evidence of
dose-response.
GSK will continue to defend itself vigorously against all claims
brought at the state level.
In the California Zantac litigation Cases JCCP 5150 (JCCP), the Court
will hold a Sargon hearing on 16 February 2023 regarding the admissibility
of expert witness testimony, including the testimony of general causation
expert witnesses, for the first bellwether trial. The first bellwether
trial is expected to start on 27 February 2023 in the California
JCCP.
Given the complex ownership and marketing of Zantac prescription
and over-the-counter (OTC) medicine over many years, numerous claims
involve several defendants. As a result, some defendants have served
one another, including GSK, with notice of potential indemnification
claims about possible liabilities connected particularly with Zantac
OTC. Given the early stage of the proceedings, GSK cannot meaningfully
assess what liability, if any, it may have, nor can it meaningfully
assess the liability of other parties under relevant indemnification
provisions.
Further information regarding the litigation can be found in GSK's
11 August 2022, 16 August 2022, and 7 December 2022 statements. These
are available on www.gsk.com/en-gb/.
Zofran
On 1 June 2021, the Court overseeing the Zofran Multidistrict Litigation
(MDL) in the District of Massachusetts granted GSK's motion for summary
judgment on federal pre-emption grounds. At that time, the District
Court granted judgment for GSK in all cases pending in the MDL (approximately
431 cases) and closed the MDL proceeding. Plaintiffs appealed this
decision and, on 9 January 2023, the United States Court of Appeals
for the First Circuit affirmed the district court's decision in favour
of GSK. There remains one state court case and four proposed class
actions in Canada.
Additional information
Disposal group and discontinued operations accounting policy
Disposal groups are classified as held for distribution if their
carrying amount will be recovered principally through a distribution
to shareholders rather than through continuing use, they are available
for distribution in their present condition and the distribution
is considered highly probable. They are measured at the lower of
their carrying amount and fair value less costs to distribute.
Non-current assets included as part of a disposal group are not depreciated
or amortised while they are classified as held for distribution.
The assets and liabilities of a disposal group classified as held
for distribution are presented separately from the other assets and
liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been
disposed of or distributed or is classified as held for distribution
and that represents a separate major line of business. The results
of discontinued operations are presented separately in the statement
of profit or loss and comparatives are restated on a consistent basis.
Accounting policies and basis of preparation
This unaudited Results Announcement contains condensed financial
information for the year-end and three months ended 31 December 2022
and should be read in conjunction with the Annual Report 2021, which
was prepared in accordance with United Kingdom adopted International
Financial Reporting Standards . This Results Announcement has been
prepared applying consistent accounting policies to those applied
by the Group in the Annual Report 2021.
The Group has not identified any changes to its key sources of accounting
judgements or estimations of uncertainty compared with those disclosed
in the Annual Report 2021.
This Results Announcement does not constitute statutory accounts
of the Group within the meaning of sections 434(3) and 435(3) of
the Companies Act 2006. The full Group accounts for 2021 were published
in the Annual Report 2021, which has been delivered to the Registrar
of Companies and on which the report of the independent auditor was
unqualified and did not contain a statement under section 498 of
the Companies Act 2006.
COVID-19 pandemic
The potential impact of the COVID-19 pandemic on GSK's trading performance
and all its principal risks is continually assessed, with appropriate
mitigation plans put in place on an as-needed basis. In 2022, GSK
was encouraged by the uptake of its vaccines and medicines. The company
remains confident in the underlying demand for its vaccines and medicines,
especially given the significant number of COVID-19 vaccinations
and boosters administered worldwide. However, the pandemic remains
a significant ongoing risk, with the World Health Organization continuing
to monitor the emergence of new variants. The current rate of infection
is predominantly driven by the circulation of the BA.5 subvariant
and its descendent lineages, which are still the dominant subvariants
of Omicron globally. While COVID-19 vaccines are being updated with
Omicron variants to provide broader immunity against circulating
and emerging variants, these subvariants and potential future variants
of concern could potentially impact GSK's trading results, clinical
trials, supply continuity and its employees materially.
Exchange rates
GSK operates in many countries and earns revenues and incurs costs
in many currencies. The results of the Group, as reported in Sterling,
are affected by movements in exchange rates between Sterling and
other currencies. Average exchange rates, as modified by specific
transaction rates for large transactions, prevailing during the period,
are used to translate the results and cash flows of overseas subsidiaries,
associates and joint ventures into Sterling. Period-end rates are
used to translate the net assets of those entities. The currencies
which most influenced these translations and the relevant exchange
rates were:
2022 2021 Q4 2022 Q4 2021
----- ------ -------- --------
Average rates:
US$/GBP 1.24 1.38 1.19 1.36
Euro/GBP 1.17 1.16 1.15 1.18
Yen/GBP 161 151 165 154
Period-end rates:
US$/GBP 1.20 1.35 1.20 1.35
Euro/GBP 1.13 1.19 1.13 1.19
Yen/GBP 159 155 159 155
Net assets
The book value of net assets decreased by GBP11,246 million from
GBP 21,342 million at 31 December 2021 to GBP 10,096 million at 31
December 2022. This primarily reflected the demerger of the Consumer
Healthcare business and dividends paid to shareholders partially
offset by Total comprehensive income for the period.
The retained stake in Haleon of GBP4,087 million is recognised as
a current equity investment.
The carrying value of investments in associates and joint ventures
at 31 December 2022 was GBP 74 million (31 December 2021: GBP88 million),
with a market value of GBP 74 million (31 December 2021: GBP88 million).
At 31 December 2022, the net deficit on the Group's pension plans
was GBP1,355 million compared with GBP1,129 million at 31 December
2021. This increase in the net deficit is primarily related to lower
asset values, an increase in the US cash balance credit rate from
2.0% to 3.9%, Eurozone inflation rates from 2.1% to 2.4% and an actuarial
experience adjustment for higher inflation than expected in pension
increases of approximately GBP800 million. These are partially offset
by increases in the long term UK discount rate from 2.0% to 4.8%,
Eurozone discount rates from 1.3% to 3.7%, the US discount rate from
2.7% to 5.3%, lower UK inflation rate from 3.2% to 3.1% and cash
contributions of approximately GBP700 million made to the UK pension
schemes.
The estimated present value of the potential redemption amount of
the Pfizer put option related to ViiV Healthcare, recorded in Other
payables in Current liabilities, was GBP 1,093 million (31 December
2021: GBP1,008 million).
Contingent consideration amounted to GBP 7,068 million at 31 December
2022 (31 December 2021: GBP6,076 million), of which GBP 5,890 million
(31 December 2021: GBP5,559 million) represented the estimated present
value of amounts payable to Shionogi relating to ViiV Healthcare,
GBP 673 million (31 December 2021: GBP479 million) represented the
estimated present value of contingent consideration payable to Novartis
related to the Vaccines acquisition and GBP 501 million (31 December
2021: GBPnil) represented the estimated present value of contingent
consideration payable to Affinivax.
Of the contingent consideration payable (on a post-tax basis) to
Shionogi at 31 December 2022, GBP 940 million (31 December 2021:
GBP937 million) is expected to be paid within one year.
Movements in contingent consideration are as follows :
ViiV
Healthcare Group
2022 GBPm GBPm
------------ --------
Contingent consideration at beginning of the period 5,559 6,076
Remeasurement through income statement and other
movements 1,431 2,129
Cash payments: operating cash flows (1,031) (1,058)
Cash payments: investing activities (69) (79)
Contingent consideration at end of the period 5,890 7,068
------------ --------
ViiV
Healthcare Group
2021 GBPm GBPm
------------ ------
Contingent consideration at beginning of the period 5,359 5,869
Remeasurement through income statement and other
movements 1,026 1,063
Cash payments: operating cash flows (721) (742)
Cash payments: investing activities (105) (114)
Contingent consideration at end of the period 5,559 6,076
------------ ------
The liabilities for the Pfizer put option and the contingent consideration
at 31 December 2022 have been calculated based on the period-end
exchange rates, primarily US$1.20/GBP1 and EUR1.13 /GBP1. Sensitivity
analyses for the Pfizer put option and each of the largest contingent
consideration liabilities are set out below for the following scenarios:
Shionogi- Novartis
ViiV ViiV Healthcare Vaccines Affinivax
Healthcare contingent contingent contingent
put option consideration consideration consideration
Increase/(decrease) in liability GBPm GBPm GBPm GBPm
------------- ----------------- --------------- ---------------
10% increase in sales forecasts* 100 556 103 n/a
10% decrease in sales forecasts* (99) (555) (103) n/a
10% increase in probability
milestone success n/a n/a 20 82
10% decrease in probability
milestone success n/a n/a (10) (82)
1% (100 basis points) increase
in discount rate (32) (200) (55) (7)
1% (100 basis points) decrease
in discount rate 35 215 65 7
10 cent appreciation of US
Dollar 66 411 22 45
10 cent depreciation of US
Dollar (56) (347) (19) (38)
10 cent appreciation of Euro 29 109 23 n/a
10 cent depreciation of Euro (24) (91) (19) n/a
* The sales forecast is for ViiV Healthcare sales only in respect
of the ViiV Healthcare put option and the Shionogi-ViiV Healthcare
contingent consideration.
Contingent liabilities
There were contingent liabilities at 31 December 2022 in respect
of guarantees and indemnities entered into as part of the ordinary
course of the Group's business. No material losses are expected to
arise from such contingent liabilities. Provision is made for the
outcome of legal and tax disputes where it is both probable that
the Group will suffer an outflow of funds and it is possible to make
a reliable estimate of that outflow. Descriptions of the significant
legal disputes to which the Group is a party are set out on page
51 and on pages 248 and 249 of the Annual Report 2021.
Business acquisitions
On 1 July 2022, GSK completed the acquisition of 100% of Sierra Oncology,
Inc. a California-based, late-stage biopharmaceutical company focused
on targeted therapies for the treatment of rare forms of cancer,
for $1.9 billion (GBP1.6 billion). The main asset is momelotinib
which targets the medical needs of myelofibrosis patients with anaemia
.
On 15 August 2022, GSK completed the acquisition of 100% of Affinivax,
Inc. (Affinivax), a clinical-stage biopharmaceutical company based
in Cambridge, Boston, Massachusetts focused on pneumococcal vaccine
candidates. The consideration for the acquisition comprised an upfront
payment of $2.2 billion (GBP1.8 billion) as adjusted for working
capital acquired paid upon closing and two potential milestone payments
of $0.6 billion (GBP0.5 billion) each to be paid upon the achievement
of certain paediatric clinical development milestones. The estimated
fair value of the contingent consideration payable was GBP 482 million.
The values are provisional and are subject to change.
Since acquisition no sales arising from the Sierra Oncology or Affinivax
businesses have been included in Group turnover and no revenue is
expected until regulatory approval is received on the acquired assets.
GSK continues to support the ongoing development of the acquired
assets and consequently these assets will be loss making until regulatory
approval on the assets is received. The development of these assets
has been integrated into the Groups' existing R&D activities, so
it is impracticable to quantify the development costs for the period.
The fair values of the net assets acquired, including goodwill, are
as follows:
Sierra Oncology Affinivax
GBPm GBPm
---------------- ----------
Net assets acquired:
Intangible assets 1,497 1,467
Inventory 60 -
Other net assets/(liabilities) 137 76
Deferred tax liabilities (259) (236)
---------------- ----------
1,435 1,307
Goodwill 162 965
---------------- ----------
Total consideration 1,597 2,272
---------------- ----------
Discontinued operations
Consumer Healthcare has been presented as a discontinued operation
from Q2 2022. The demerger of Haleon was completed on 18 July 2022.
Financial information relating to the operations of Consumer Healthcare
for the period until demerger on 18 July 2022 is set out below. The
Group Income Statement and Group Cash Flow Statement distinguish
discontinued operations from continuing operations. Comparative figures
have been restated on a consistent basis.
This financial information differs both in purpose and basis of preparation
from the Historical Financial Information and the Interim Financial
Information included in the Haleon prospectus and from that which
will be published by Haleon on 2 March 2023. As a result, whilst
the two sets of financial information are similar, they are not the
same because of certain differences in accounting and disclosure
under IFRS.
2022 2021 Q4 2022 Q4 2021
Total Results GBPm GBPm GBPm GBPm
-------- -------- -------- --------
Turnover 5,581 9,418 - 2,451
Other income/(expenses) (4,730) (7,575) (5) (2,048)
-------- -------- -------- --------
Profit before tax 851 1,843 (5) 403
Taxation (235) (263) - 107
Tax rate% 27.6% 14.3% - (26.6%)
-------- -------- -------- --------
(Loss)/profit after taxation from
discontinued
operations: Consumer Healthcare 616 1,580 (5) 510
Other gains/(losses) from the
demerger 2,433 - - -
Remeasurement of discontinued
operations
distributed to shareholders on
demerger 7,651 - - -
-------- -------- -------- --------
Profit after taxation from discontinued
operations 10,700 1,580 (5) 510
-------- -------- -------- --------
Non-controlling interest in discontinued
operations 205 511 - 187
Earnings attributable to shareholders
from
discontinued operations 10,495 1,069 (5) 323
-------- -------- -------- --------
Earnings per share from discontinued
operations 260.6p 26.7p (0.1)p 8.1p
-------- -------- -------- --------
The profit after taxation from discontinued operations for Consumer
Healthcare of GBP 616 million in full-year 2022 includes separation
and transaction costs of GBP 366 million.
Divestments
On 18 July 2022, GSK plc separated its Consumer Healthcare business
from the GSK Group to form Haleon, an independent listed company.
The separation was effected by way of a demerger of 80.1% of GSK's
68% holding in the Consumer Healthcare business to GSK shareholders.
Following the demerger, 54.5% of Haleon was held in aggregate by
GSK Shareholders, 6.0% remains held by GSK (including shares received
by GSK's consolidated ESOP trusts) and 7.5% remains held by certain
Scottish limited partnerships (SLPs) set up to provide collateral
for a funding mechanism pursuant to which GSK will provide additional
funding for GSK's UK defined benefit Pension Schemes. The aggregate
ownership by GSK (including ownership by the ESOP trusts and SLPs)
after the demerger of 13.5% is measured at fair value with changes
through profit or loss. Pfizer held 32% of Haleon after the demerger.
Under IFRIC 17 'Distributions of Non-cash Assets to Owners' a liability
and an equity distribution are measured at the fair value of the
assets to be distributed when the dividend is appropriately authorised
and it is no longer at the entity's discretion. The liability and
equity movement, and associated gain on distribution was recognised
in Q3 2022 when the demerger distribution was authorised and occurred.
The asset distributed was the 54.5% ownership of the Consumer Healthcare
business. The net carrying value of the Consumer Healthcare business
in the consolidated financial statements, including the retained
13.5% and net of the amount attributable to the non-controlling interest,
was approximately GBP11.5 billion at the end of June. GSK's GBP6.3
billion share of the shareholder loans made in Q1 2022 in advance
of the pre-separation dividends was eliminated in the consolidated
financial statements. The assets distributed were reduced by Consumer
Healthcare transactions up to 18 July that principally included pre-separation
dividends declared and settled after the end of Q2 2022 and before
18 July 2022. Those dividends included: GBP10.4 billion (GBP7.1 billion
attributable to GSK) of dividends funded by Consumer Healthcare debt
that was partially on-lent during Q1 2022 and dividends of GBP0.6
billion (GBP0.4 billion attributable to GSK) from available cash
balances.
The fair value of the 54.5% ownership of the Consumer Healthcare
business distributed was GBP15.5 billion. This was measured by reference
to the quoted average Haleon share price over the first five days
of trading, this being a fair value measured with observable inputs
which is considered to be representative of the fair value at the
distribution date. A gain on distribution of this fair value less
book value of the attributable net assets of the Consumer Healthcare
business of GBP7.7 billion was recorded in the Income Statement in
the full-year 2022. There was an additional gain of GBP2.4 billion
to remeasure the retained 13.5% from its book value to fair value
of GBP3.9 billion using the same fair value methodology as used for
the distributed shares in the full-year 2022. The gain on distribution
and on remeasurement of the retained stake upon demerger is presented
as part of discontinued operations. In addition, there was a reclassification
of the Group's share of cumulative exchange differences arising on
translation of the foreign currency net assets of the divested subsidiaries
and offsetting net investment hedges from reserves into the Income
Statement of GBP0.6 billion. The total gain on the demerger of Consumer
Healthcare was GBP10.1 billion in the full-year 2022.
Following finalisation of the demerger accounting, an adjustment
of GBP0.5 billion to increase the gain on the demerger of Consumer
Healthcare as disclosed in Q3 2022 from GBP9.6 billion to GBP10.1
billion for the full-year has been recorded. This gain relates to
an adjustment for deferred profit in inventory. These transactions
are presented in profit from discontinued operations (adjusting items)
in the full-year 2022 results. The adjustment has been recorded retrospectively
within the Q3 2022 results and will be reflected in the comparator
for disclosure in the Q3 2023 results. These transactions are presented
in profit from discontinued operations (adjusting items) in the full-year
2022.
Any future gains or losses on the retained stake of 13.5% in Haleon
will be recognised in adjusting items in continuing operations.
2022
GBPbn
-------
Fair value of the Consumer Healthcare business distributed
(54.5%) 15.5
Fair value of the retained ownership in Haleon (13.5%) 3.9
-------
Total fair value 19.4
Carrying amount of the net assets and liabilities distributed/derecognised (12.9)
Carrying amount of the non-controlling interest de-recognised 3.0
-------
Gain on demerger before exchange movements and transaction
costs 9.5
Reclassification of exchange movements on disposal of overseas
subsidiaries 0.6
Total gain on the demerger of Consumer Healthcare 10.1
-------
Total transaction costs incurred in Q4 2022 were GBP 1 million and
GBP 103 million in the year ended 2022. These transaction costs were
incurred in connection with the demerger and preparatory admission
costs related to the listing of Haleon and are reported as part of
the profit from discontinued operations in the Total to Adjusted
presentation on page 18 .
Share Consolidation
Following completion of the Consumer Healthcare business demerger
on 18 July 2022, GSK plc Ordinary shares were consolidated to maintain
share price comparability before and after demerger. The consolidation
was approved by GSK shareholders at a General Meeting held on 6 July
2022. Shareholders received 4 new Ordinary shares with a nominal
value of 31 1/4 pence each for every 5 existing Ordinary share which
had a nominal value of 25 pence each. Earnings per share, diluted
earnings per share, adjusted earnings per share and dividends per
share were retrospectively adjusted to reflect the Share Consolidation
in all the periods presented.
Related party transactions
Details of GSK's related party transactions are disclosed on page
221 of our 2021 Account Report and Accounts.
Reconciliation of cash flow to movements in net debt
2022 2021
GBPm GBPm
--------- ---------
Total Net debt at beginning of the period (19,838) (20,780)
Decrease in cash and bank overdrafts (7,598) (2,504)
Decrease in liquid investments (1) (18)
Net decrease in short-term loans 4,053 2,003
Net decrease in long-term loans 569 -
Repayment of lease liabilities 202 181
Debt of subsidiary undertaking acquired (24) -
Exchange adjustments (1,530) 314
Other non-cash movements (207) (134)
--------- ---------
Decrease/(increase) in net debt from continuing
operations (4,536) (158)
Decrease/(increase) in net debt from discontinued
operations 7,177 1,100
Total Net debt at end of the period (17,197) (19,838)
--------- ---------
Net debt analysis
2022 2021
GBPm GBPm
--------- ---------
Liquid investments 67 61
Cash and cash equivalents 3,723 4,274
Short-term borrowings (3,952) (3,601)
Long-term borrowings (17,035) (20,572)
Total Net debt at the end of the period (17,197) (19,838)
--------- ---------
Free cash flow reconciliation from continuing operations
2022 2021 Q4 2022
GBPm GBPm GBPm
-------- -------- --------
Net cash inflow from continuing operating
activities 6,634 6,277 1,901
Purchase of property, plant and equipment (1,143) (950) (438)
Proceeds from sale of property, plant
and equipment 146 132 133
Purchase of intangible assets (1,115) (1,704) (313)
Proceeds from disposals of intangible
assets 196 641 70
Net finance costs (784) (758) (329)
Dividends from joint ventures and associates 6 9 6
Contingent consideration paid (reported
in investing
activities) (79) (114) (4)
Distributions to non-controlling interests (521) (239) (131)
Contributions from non-controlling
interests 8 7 -
Free cash inflow from continuing operations 3,348 3,301 895
R&D commentary
Pipeline overview
Medicines and vaccines 18 Infectious Diseases (8)
in phase III development
(including major lifecycle
innovation or under
regulatory review)
-- Bexsero infants vaccine (US)
-- SKYCovione (SK) COVID-19
-- MenABCWY (1st gen) vaccine candidate
-- RSV older adult vaccine candidate
-- bepirovirsen (HBV ASO) hepatitis
B virus
-- gepotidacin (bacterial topoisomerase
inhibitor) uncomplicated urinary
tract infection and urogenital
gonorrhoea
-- tebipenem pivoxil (antibacterial
carbapenem) complicated urinary
tract infection
-- Xevudy (sotrovimab/VIR-7831) COVID-19
Oncology (5)
-- Blenrep (anti-BCMA ADC) multiple
myeloma
-- cobolimab (anti-TIM-3) non-small
cell lung cancer
-- Jemperli (anti-PD-1) 1L endometrial
cancer
-- momelotinib (JAK1, JAK2 and ACVR1
inhibitor) myelofibrosis with anaemia
-- Zejula (PARP inhibitor) 1L ovarian,
lung and breast cancer
Immunology (3)
-- depemokimab (long acting anti-IL5)
severe eosinophilic asthma, eosinophilic
granulomatosis with polyangiitis,
chronic rhinosinusitis with nasal
polyps, hyper-eosinophilic syndrome
-- latozinemab (AL001, anti-sortilin)
frontotemporal dementia
-- Nucala chronic obstructive pulmonary
disease
Opportunity driven (2)
-- daprodustat (HIF-PHI) anaemia of
chronic kidney disease
-- linerixibat (IBATi) cholestatic
pruritus in primary biliary cholangitis
Total vaccines and medicines
in all phases of clinical
development 69
---
Total projects in clinical
development (inclusive
of all phases and indications) 89
--- -----------------------------------------------
Our key growth assets by therapy area
The following outlines several key vaccines and medicines by therapy
area that will help drive growth for GSK to meet its outlooks and
ambition for 2021-2026 and beyond.
Infectious Diseases
bepirovirsen (HBV ASO)
Bepirovirsen is a potential new treatment option for people with
chronic hepatitis B as either a monotherapy or combination therapy
with both existing and novel treatments. Two randomised, double-blind,
placebo-controlled phase III trials (B-Well 1 and B-Well 2) evaluating
the safety and efficacy of bepirovirsen have started and are actively
recruiting patients.
In June 2022, GSK announced promising interim results from the B-Clear
phase IIb trial showing that bepirovirsen reduced levels of hepatitis
B surface antigen (HBsAg) and hepatitis B virus (HBV) DNA, which
together are key measures of efficacy, after 24 weeks treatment in
people with chronic hepatitis B (CHB). These data were presented
in an oral late-breaker session at the European Association for the
Study of the Liver's International Liver Congress (ILC) in June 2022
in London, UK. The final, B-Clear end of study results showed that
treatment with bepirovirsen resulted in sustained seroclearance of
hepatitis B surface antigen (HBsAg) and hepatitis B virus (HBV) DNA
both in patients on concurrent NA therapy and patients not-on-NA
therapy. The final results were presented at the American Association
for the Study of Liver Diseases (AASLD) Liver Meeting in November
2022, and simultaneously published in the New England Journal of
Medicine.
In December 2022, GSK entered into an exclusive license agreement
with biopharma company Zhimeng for CB06-036, a TLR8 agonist. Subject
to successful completion of phase I, the agreement will allow GSK
to develop, manufacture and commercialise CB06-036. If successful,
CB06-036 could be used in combination, or as a sequential treatment
with bepirovirsen, to potentially achieve functional cure in more
patients.
Key trials for bepirovirsen:
Trial name Phase Design Timeline Status
(population)
B-Well 1 bepirovirsen III A multi-centre, randomised, Trial Start: Recruiting
in nucleos(t)ide double-blind, placebo-controlled Q1 2023
treated patients study to confirm the efficacy
(chronic hepatitis and safety of treatment with
B) bepirovirsen in participants
with chronic hepatitis B
NCT05630807 virus
------ ---------------------------------- ------------- ----------------
B-Well 2 bepirovirsen III A multi-centre, randomised, Trial Start: Recruiting
in nucleos(t)ide double-blind, placebo-controlled Q1 2023
treated patients study to confirm the efficacy
(chronic hepatitis and safety of treatment with
B) bepirovirsen in participants
with chronic hepatitis B
NCT05630820 virus
------ ---------------------------------- ------------- ----------------
B-Clear bepirovirsen IIb A multi-centre, randomised, Trial start: Complete;
monotherapy partial-blind parallel cohort Q3 2020 full data
(chronic hepatitis trial to assess the efficacy presented
B) and safety of treatment with
bepirovirsen in participants
NCT04449029 with chronic hepatitis B
virus
------ ---------------------------------- ------------- ----------------
B-Together bepirovirsen II A multi-centre, randomised, Trial start: Active,
sequential combination open label trial to assess Q1 2021 not recruiting
therapy with the efficacy and safety of
Peg-interferon sequential treatment with
phase II (chronic bepirovirsen followed by
hepatitis B) Pegylated Interferon Alpha
2a in participants with chronic
NCT04676724 hepatitis B virus
------ ---------------------------------- ------------- ----------------
bepirovirsen II A trial on the safety, efficacy Trial start: Recruiting
sequential combination and immune response following Q2 2022
therapy with sequential treatment with
targeted immunotherapy an anti-sense oligonucleotide
(chronic hepatitis against chronic hepatitis
B) B (CHB) and chronic hepatitis
B targeted immunotherapy
NCT05276297 (CHB-TI) in CHB patients
receiving nucleos(t)ide analogue
(NA) therapy
------ ---------------------------------- ------------- ----------------
gepotidacin (bacterial topoisomerase inhibitor)
In November 2022, GSK announced that the pivotal phase III EAGLE-2
and EAGLE-3 trials evaluating gepotidacin, an investigational treatment
for uncomplicated urinary tract infection (uUTI) in female adults
and adolescents, would stop enrolment early for efficacy following
a recommendation by the Independent Data Monitoring Committee (IDMC).
This decision was based on a pre-specified interim analysis of efficacy
and safety data in over 3000 patients across the trials. The full
phase III results will also be submitted for presentation at a scientific
congress and for publication in a peer-reviewed journal in 2023.
GSK is working with regulatory authorities to commence regulatory
filings for gepotidacin in H1 2023.
Key phase III trials for gepotidacin:
Trial name Phase Design Timeline Status
(population)
EAGLE-1 (uncomplicated III A randomised, multi-centre, Trial start: Recruiting
urogenital gonorrhoea) open-label trial in adolescent Q4 2019
and adult participants comparing
NCT04010539 the efficacy and safety of
gepotidacin to ceftriaxone
plus azithromycin in the
treatment of uncomplicated
urogenital gonorrhoea caused
by Neisseria gonorrhoeae
------ ---------------------------------- ------------- -----------
EAGLE-2 (females III A randomised, multi-centre, Trial start: Complete;
with uUTI / parallel-group, double-blind, Q4 2019 primary
acute cystitis) double-dummy trial in adolescent endpoint
and adult female participants met
NCT04020341 comparing the efficacy and
safety of gepotidacin to
nitrofurantoin in the treatment
of uncomplicated urinary
tract infection (acute cystitis)
------ ---------------------------------- ------------- -----------
EAGLE-3 (females III A randomised, multi-centre, Trial start: Complete;
with uUTI / parallel-group, double-blind, Q2 2020 primary
acute cystitis) double-dummy trial in adolescent endpoint
and adult female participants met
NCT04187144 comparing the efficacy and
safety of gepotidacin to
nitrofurantoin in the treatment
of uncomplicated urinary
tract infection (acute cystitis)
------ ---------------------------------- ------------- -----------
MenABCWY vaccine candidate
GSK is developing two MenABCWY pentavalent (5-in-1) vaccines. The
first generation is in late-stage development and the second generation
is in phase II clinical development. The goal is to prevent disease
caused by meningococcal bacteria serogroups A, B, C, W, and Y. Testing
for the phase III trial of our first generation MenABCWY candidate
vaccine is being finalised, with the read out anticipated for H1
2023 and US Food and Drug Administration (FDA) filing expected later
in the year.
Key trials for MenABCWY vaccine candidate:
Trial name Phase Design Timeline Status
(population)
MenABCWY - 019 IIIb A randomised, controlled, Trial start: Active,
observer-blind trial to evaluate Q1 2021 not recruiting
NCT04707391 safety and immunogenicity
of GSK's meningococcal ABCWY
vaccine when administered
in healthy adolescents and
adults, previously primed
with meningococcal ACWY vaccine
------ ------------------------------------- ------------- ----------------
MenABCWY - V72 III A randomised, controlled, Trial start: Complete
72 observer-blind trial to demonstrate Q3 2020
effectiveness, immunogenicity,
NCT04502693 and safety of GSK's meningococcal
Group B and combined ABCWY
vaccines when administered
to healthy adolescents and
young adults
------ ------------------------------------- ------------- ----------------
RSV vaccine candidates
In November 2022, GSK submitted a New Drug Submission (NDS) to Health
Canada for its respiratory syncytial virus (RSV) older adult vaccine
candidate. GSK's RSV older adult vaccine candidate is also under
regulatory review by the US FDA, the European Medicines Agency (EMA)
and the Japanese Ministry of Health, Labour and Welfare (MHLW) with
decisions anticipated throughout 2023.
In Q4 2022, GSK began a phase III trial to assess the RSV older adult
vaccine candidate in adults 50-59 years of age, including adults
at increased risk of RSV lower respiratory tract disease, compared
to older adults >=60 years of age. GSK also began two new trials
to evaluate the vaccine candidate when co-administered with adjuvanted
and high dose influenza vaccines in adults aged 65 years and above.
Key phase III trials for RSV older adult and maternal vaccine candidates:
Trial name Phase Design Timeline Status
(population)
RSV OA=ADJ-004 III A randomised, open-label, Trial start: Active,
(Adults >= 60 multi-country trial to evaluate Q1 2021 not recruiting;
years old) the immunogenicity, safety, primary
reactogenicity and persistence endpoint
NCT04732871 of a single dose of the met
RSVPreF3 OA investigational
vaccine and different revaccination
schedules in adults aged
60 years and above
------ -------------------------------------- ------------------ -----------------
RSV OA=ADJ-006 III A randomised, placebo-controlled, Trial start: Active,
(ARESVI-006; observer-blind, multi-country Q2 2021 not recruiting;
Adults >= 60 trial to demonstrate the primary
years old) efficacy of a single dose endpoint
of GSK's RSVPreF3 OA investigational met
NCT04886596 vaccine in adults aged 60
years and above
------ -------------------------------------- ------------------ -----------------
RSV OA=ADJ-007 III An open-label, randomised, Trial start: Complete;
(Adults >= 60 controlled, multi-country Q2 2021 primary
years old) trial to evaluate the immune endpoint
response, safety and reactogenicity met
NCT04841577 of RSVPreF3 OA investigational
vaccine when co-administered
with FLU-QIV vaccine in
adults aged 60 years and
above
------ -------------------------------------- ------------------ -----------------
RSV OA=ADJ-008 III A phase III, open-label, Trial start: Active,
randomised, controlled, Q4 2022 not recruiting
(Adults >= 65 multi country study to evaluate
years old) the immune response, safety
and reactogenicity of RSVPreF3
NCT05559476 OA investigational vaccine
when co-administered with
FLU HD vaccine in adults
aged 65 years and above
------ -------------------------------------- ------------------ -----------------
RSV OA=ADJ-009 III A randomised, double-blind, Trial start: Complete;
(Adults >= 60 multi-country trial to evaluate Q4 2021 primary
years old) consistency, safety, and endpoint
reactogenicity of 3 lots met
NCT05059301 of RSVPreF3 OA investigational
vaccine administrated as
a single dose in adults
aged 60 years and above
------ -------------------------------------- ------------------ -----------------
RSV OA=ADJ-017 III A phase III, open-label, Trial start: Active,
(Adults >= 65 randomised, controlled, Q4 2022 not recruiting
years old) multi-country study to evaluate
the immune response, safety
NCT05568797 and reactogenicity of an
RSVPreF3 OA investigational
vaccine when co-administered
with FLU aQIV (inactivated
influenza vaccine - adjuvanted)
in adults aged 65 years
and above
------ -------------------------------------- ------------------ -----------------
RSV OA=ADJ-018 III A phase III, observer-blind, Trial start: Recruiting
randomised, placebo controlled
study to evaluate the non
inferiority of the immune
response and safety of the
RSVPreF3 OA investigational
vaccine in adults 50 59
years of age, including
adults at increased risk
of respiratory syncytial
virus lower respiratory
tract disease, compared
to older adults >=60 years
of age.
(Adults 50-59 Q4 2022
years)
NCT05590403
------ -------------------------------------- ------------------ -----------------
GRACE (pregnant III A randomised, double-blind, Trial start: Stopped
women aged 18-49 placebo-controlled multi-country Q4 2020 enrolment
years old) trial to demonstrate efficacy and vaccination
of a single dose of unadjuvanted Trial stopped
NCT04605159 RSV maternal vaccine, administered enrolment
IM to pregnant women 18 and vaccination:
to 49 years of age, for Q1 2022
prevention of RSV associated
LRTIs in their infants up
to 6 months of age
------ -------------------------------------- ------------------ -----------------
HIV
cabotegravir
ViiV Healthcare presented 12-month findings from the CARISEL study
(Cabotegravir And Rilpivirine Implementation Study in European Locations),
at the 30th HIV Glasgow Conference in Glasgow, Scotland from 23-26
October, which evaluated the perspectives of people living with HIV
and healthcare teams through surveys and interviews in addition to
evaluating clinical effectiveness. The study demonstrated that ViiV
Healthcare's Vocabria (cabotegravir injection) and Janssen Pharmaceutical
Companies of Johnson and Johnson's Rekambys (rilpivirine long-acting
injectable suspension) were successfully implemented across a range
of European healthcare settings. The study also reported that 81%
of people living with HIV found the complete long-acting regimen
less stigmatising than daily oral treatment reinforcing the importance
of continued research in HIV long-acting regimens.
Key phase III trials for cabotegravir:
Trial name Phase Design Timeline Status
(population)
HPTN 083 IIb/III A double-blind safety and Trial start: Active;
(HIV uninfected efficacy trial of injectable Q4 2016 not recruiting;
cisgender men cabotegravir compared to primary
and transgender daily oral tenofovir disoproxil endpoint
women who have fumarate/emtricitabine (TDF/FTC), met (superiority)
sex with men) for Pre-Exposure Prophylaxis
in HIV-uninfected cisgender
NCT02720094 men and transgender women
who have sex with men
-------- ----------------------------------- ------------- -----------------------
HPTN 084 III A double-blind safety and Trial start: Active;
(HIV uninfected efficacy trial of long-acting Q4 2017 not recruiting;
women who are injectable cabotegravir compared primary
at high risk to daily oral TDF/FTC for endpoint
of acquiring Pre-Exposure Prophylaxis met (superiority)
HIV) in HIV-Uninfected women
NCT03164564
-------- ----------------------------------- ------------- -----------------------
ATLAS III A randomised, multi-centre, Trial start: Active;
parallel-group, non-inferiority, Q4 2016 not recruiting;
NCT02951052 open-label trial evaluating primary
the efficacy, safety, and endpoint
tolerability of switching met (non-inferiority)
to long-acting cabotegravir
plus long-acting rilpivirine
from current INI- NNRTI-,
or PI-based antiretroviral
regimen in HIV-1-infected
adults who are virologically
suppressed
-------- ----------------------------------- ------------- -----------------------
ATLAS-2M IIIb A randomised, multi-centre, Trial start: Active;
parallel-group, non-inferiority, Q4 2017 not recruiting;
NCT03299049 open-label trial evaluating primary
the efficacy, safety, and endpoint
tolerability of long-acting met (non-inferiority)
cabotegravir plus long-acting
rilpivirine administered
every 8 weeks or every 4
weeks in HIV-1-infected adults
who are virologically suppressed
-------- ----------------------------------- ------------- -----------------------
FLAIR III A randomised, multi-centre, Trial start: Active;
parallel-group, open-label Q4 2016 not recruiting;
NCT02938520 trial evaluating the efficacy, primary
safety, and tolerability endpoint
of long-acting intramuscular met (non-inferiority)
cabotegravir and rilpivirine
for maintenance of virologic
suppression following switch
from an integrase inhibitor
single tablet regimen in
HIV-1 infected antiretroviral
therapy naïve adult
participants
-------- ----------------------------------- ------------- -----------------------
Oncology
Blenrep (belantamab mafodotin)
In November 2022, GSK announced it has initiated the process for
withdrawal of the US marketing authorisation for Blenrep following
the request of the US FDA. This request was based on the outcome
of the DREAMM-3 phase III confirmatory trial, which did not meet
the requirements of the US FDA Accelerated Approval regulations.
Additional studies within the DREAMM (DRiving Excellence in Approaches
to Multiple Myeloma) clinical trial programme are ongoing, evaluating
belantamab mafodotin in earlier lines of therapy and in combination.
We anticipate data from DREAMM-7 and DREAMM-8 in the second-line
setting in the second half of 2023.
In December, data presented at the American Society of Hematology
(ASH) Annual Meeting and Exposition featured new findings from clinical
trials of belantamab mafodotin in relapsed/refractory and newly diagnosed
multiple myeloma, focusing on the potential of combination approaches
for belantamab mafodotin through our investigator-sponsored studies
and supported collaborative studies. Updated results from ALGONQUIN
evaluating the combination of belantamab mafodotin with pomalidomide
and dexamethasone in relapsed/refractory patients who received two
or more prior lines of treatment demonstrated a significantly longer
progression-free survival compared with a historical control cohort.
Additionally, results from BelaRd, a dose and schedule evaluation
study to investigate the safety and clinical activity of belantamab
mafodotin in combination with lenalidomide and dexamethasone in patients
with transplant-ineligible newly diagnosed multiple myeloma, showed
a strong efficacy and a manageable safety profile.
In addition, a presentation of the f inal analysis of the long-term
safety and efficacy data for the DREAMM-2 trial showed deep and durable
response of belantamab mafodotin for the treatment of patients with
relapsed or refractory multiple myeloma who have received at least
three prior therapies including an anti-CD38 monoclonal antibody,
a proteasome inhibitor, and an immunomodulatory agent.
Key phase III trials for Blenrep:
Trial name Phase Design Timeline Status
(population)
DREAMM-3 (3L/4L+ III An open-label, randomised Trial start: Active,
MM pts who have trial to evaluate the efficacy Q2 2020 not recruiting;
failed Len + and safety of single-agent primary
PI) belantamab mafodotin compared endpoint
to pomalidomide plus low not met
NCT04162210 dose dexamethasone (pom/dex)
in participants with relapsed/refractory
multiple myeloma
------ ------------------------------------------ ------------- -----------------
DREAMM-7 (2L+ III A multi-centre, open-label, Trial start: Active,
MM pts) randomised trial to evaluate Q2 2020 not recruiting
the efficacy and safety of
NCT04246047 the combination of belantamab
mafodotin, bortezomib, and
dexamethasone (B-Vd) compared
with the combination of daratumumab,
bortezomib and dexamethasone
(D-Vd) in participants with
relapsed/refractory multiple
myeloma
------ ------------------------------------------ ------------- -----------------
DREAMM-8 (2L+ III A multi-centre, open-label, Trial start: Enrolment
MM pts) randomised trial to evaluate Q4 2020 complete
the efficacy and safety of
NCT04484623 belantamab mafodotin in combination
with pomalidomide and dexamethasone
(B-Pd) versus pomalidomide
plus bortezomib and dexamethasone
(P-Vd) in participants with
relapsed/refractory multiple
myeloma
------ ------------------------------------------ ------------- -----------------
Jemperli (dostarlimab)
In December, GSK announced positive headline results from the planned
interim analysis of Part 1 of the RUBY/ENGOT-EN6/GOG3031/NSGO phase
III trial investigating Jemperli (dostarlimab) plus standard-of-care
chemotherapy (carboplatin-paclitaxel) followed by Jemperli compared
to chemotherapy plus placebo followed by placebo in adult patients
with primary advanced or recurrent endometrial cancer. The trial
met its primary endpoint of investigator-assessed progression-free
survival (PFS) and showed a statistically significant and clinically
meaningful benefit in the prespecified mismatch repair deficient
(dMMR)/microsatellite instability-high (MSI-H) patient subgroup and
in the overall population. The safety and tolerability profile of
dostarlimab in the RUBY phase III trial was consistent with clinical
trials of similar regimens .
While the overall survival (OS) data were immature at the time of
this analysis, a favourable trend was observed in the overall population,
including both the dMMR/MSI-H and MMRp/MSS subgroups. Full results
from the trial will be published in a medical journal and presented
at an upcoming scientific meeting.
GSK also announced full results of the PERLA phase II trial at the
European Society for Medical Oncology (ESMO) Immuno-Oncology Congress
2022 in Geneva, Switzerland. The trial evaluated dostarlimab in combination
with chemotherapy versus pembrolizumab in combination with chemotherapy
in first-line patients with metastatic non-squamous non-small cell
lung cancer (NSCLC).
The PERLA phase II trial is a randomised, double-blind trial of 243
patients and is the largest global head-to-head trial of PD-1 inhibitors
in this population. The confirmed objective response rate was 46%
in patients treated with investigational dostarlimab combination
versus 37% in the pembrolizumab combination. The k ey secondary endpoint
of median progression-free survival was 8.8 months in the dostarlimab
treatment arm versus 6.7 months in the pembrolizumab treatment arm.
Key trials for Jemperli:
Trial name Phase Design Timeline Status
(population)
RUBY III A randomised, double-blind, Trial start: Active,
ENGOT-EN6 multi-centre trial of dostarlimab Q3 2019 not recruiting
GOG-3031 (1L (TSR-042) plus carboplatin-paclitaxel
Stage III or with and without niraparib
IV endometrial maintenance versus placebo
cancer) plus carboplatin-paclitaxel
in patients with recurrent
NCT03981796 or primary advanced endometrial
cancer
------ --------------------------------------- ------------- -----------------
PERLA (1L metastatic II A randomised, double-blind Trial start: Active,
non-small cell study to evaluate the efficacy Q4 2020 not recruiting;
lung cancer) of dostarlimab plus chemotherapy primary
versus pembrolizumab plus endpoint
NCT04581824 chemotherapy in metastatic met
non-squamous non-small cell
lung cancer
------ --------------------------------------- ------------- -----------------
GARNET I/II A multi-center, open-label, Trial start: Active,
first-in-human study evaluating Q1 2016 recruiting
dostarlimab (TSR-042) in
participants with advanced
solid tumors who have limited
available treatment options
------ --------------------------------------- ------------- -----------------
momelotinib (JAK1/2 and ACVR1/ALK2 inhibitor)
In January 2023, 24-week data from the MOMENTUM phase III trial,
that evaluated momelotinib in patients with myelofibrosis who were
symptomatic and anaemic and had been previously treated with an FDA-approved
JAK inhibitor, were published in The Lancet. Treatment with momelotinib,
compared with danazol, resulted in clinically significant improvements
in myelofibrosis-associated symptoms, anaemia measures, and spleen
response, with favourable safety. These findings support the potential
use of momelotinib as an effective treatment in patients with myelofibrosis,
especially in those with anaemia.
At ASH 2022, GSK presented 7 abstracts for momelotinib including
the 48-week data from the MOMENTUM trial. In this updated analysis,
momelotinib maintained 24-week symptom, transfusion independence
and spleen responses with continued favourable safety. Momelotinib
is the only agent to demonstrate this outcome in a key pivotal trial.
GSK also announced that the EMA validated the marketing authorisation
application (MAA) for momelotinib, a potential new oral treatment
for myelofibrosis. A Committee for Medicinal Products for Human Use
(CHMP) regulatory action is anticipated by year-end 2023, and a New
Drug Application for momelotinib is currently under regulatory review
with the US FDA.
Key phase III trial for momelotinib:
Trial name Phase Design Timeline Status
(population)
MOMENTUM (myelofibrosis) III A randomised, double-blind, Trial start: Active,
active control phase III Q1 2020 not recruiting;
NCT04173494 trial intended to confirm primary
the differentiated clinical endpoint
benefits of the investigational met
drug momelotinib (MMB) versus
danazol (DAN) in symptomatic
and anaemic subjects who
have previously received
an approved Janus kinase
inhibitor (JAKi) therapy
for myelofibrosis (MF)
------ --------------------------------- ------------- -----------------
Zejula (niraparib)
In November, GSK provided an update that at the request of the US
FDA it will restrict the second-line maintenance indication for Zejula
(niraparib) to only the patient population with deleterious or suspected
deleterious germline BRCA mutations (gBRCAmut). The US first-line
indication of Zejula remains unchanged for the maintenance treatment
of adult patients with advanced epithelial ovarian, fallopian tube,
or primary peritoneal cancer who have a complete or partial response
to platinum-based chemotherapy.
GSK received a favourable opinion from the CHMP of the EMA supporting
the existing indication for Zejula in the relapsed ovarian cancer
maintenance setting, based on a review of all available clinical
data. Zejula continues to be an important maintenance treatment option
for appropriate patients in the second-line or later setting and
for patients who are in complete or partial response to first-line
platinum-based chemotherapy.
Key phase III trials for Zejula:
Trial name Phase Design Timeline Status
(population)
ZEAL-1L (maintenance III A randomised, double-blind, Trial start: Active,
for 1L advanced placebo-controlled, multi-centre Q4 2020 not recruiting
NSCLC) trial comparing niraparib
plus pembrolizumab versus
NCT04475939 placebo plus pembrolizumab
as maintenance therapy in
participants whose disease
has remained stable or responded
to first-line platinum-based
chemotherapy with pembrolizumab
for Stage IIIB/IIIC or IV
non-small cell lung cancer
------ ----------------------------------- ------------- ----------------
ZEST (Her2- III A randomised double-blinded Trial start: Recruiting
with BRCA-mutation, trial comparing the efficacy Q2 2021
or TNBC) and safety of niraparib to
placebo in participants with
NCT04915755 either HER2-negative BRCA-mutated
or triple-negative breast
cancer with molecular disease
based on presence of circulating
tumour DNA after definitive
therapy
------ ----------------------------------- ------------- ----------------
FIRST (1L ovarian III A randomised, double-blind, Trial start: Active,
cancer maintenance) comparison of platinum-based Q4 2018 not recruiting
therapy with dostarlimab
NCT03602859 (TSR-042) and niraparib versus
standard of care platinum-based
therapy as first-line treatment
of stage III or IV non-mucinous
epithelial ovarian cancer
------ ----------------------------------- ------------- ----------------
Immunology
depemokimab (ultra-long-acting anti-IL5)
The phase III programme for our ultra-long-acting IL5 inhibitor,
depemokimab continues to make progress across a range of eosinophil-driven
diseases. Phase III trials of depemokimab began this year in eosinophilic
granulomatosis with polyangiitis (EGPA), chronic rhinosinusitis with
nasal polyps (CRSwNP) and hypereosinophilic syndrome (HES). Trials
of depemokimab in severe eosinophilic asthma which started in 2021
continued throughout 2022 with the open label extension of these
studies starting recruitment in Q1 of 2022. Depemokimab is a unique
and distinct monoclonal antibody developed specifically for its affinity
for IL-5 and long duration of inhibition.
Key phase III trials for depemokimab:
Trial name Phase Design Timeline Status
(population)
SWIFT-1 (severe III A 52-week, randomised, double-blind, Trial start: Recruiting
eosinophilic placebo-controlled, parallel-group, Q1 2021
asthma; SEA) multi-centre trial of the
efficacy and safety of depemokimab
NCT04719832 adjunctive therapy in adult
and adolescent participants
with severe uncontrolled
asthma with an eosinophilic
phenotype
---------------- ------------------------------------------- ------------- -----------
SWIFT-2 (SEA) III A 52-week, randomised, double-blind, Trial start: Recruiting
placebo-controlled, parallel-group, Q1 2021
NCT04718103 multi-centre trial of the
efficacy and safety of depemokimab
adjunctive therapy in adult
and adolescent participants
with severe uncontrolled
asthma with an eosinophilic
phenotype
---------------- ------------------------------------------- ------------- -----------
AGILE (SEA) III (extension) A 52-week, open label extension Trial start: Recruiting
phase of SWIFT-1 and SWIFT-2 Q1 2022
NCT05243680 to assess the long-term safety
and efficacy of depemokimab
adjunctive therapy in adult
and adolescent participants
with severe uncontrolled
asthma with an eosinophilic
phenotype
---------------- ------------------------------------------- ------------- -----------
NIMBLE (SEA) III A 52-week, randomised, double-blind, Trial start: Recruiting
double-dummy, parallel group, Q1 2021
NCT04718389 multi-centre, non-inferiority
trial assessing exacerbation
rate, additional measures
of asthma control and safety
in adult and adolescent severe
asthmatic participants with
an eosinophilic phenotype
treated with depemokimab
compared with mepolizumab
or benralizumab
---------------- ------------------------------------------- ------------- -----------
ANCHOR-1 (CRSwNP) III Efficacy and safety of depemokimab Trial start: Recruiting
in participants with CRSwNP Q2 2022
NCT05274750
---------------- ------------------------------------------- ------------- -----------
ANCHOR-2 (CRSwNP) III Efficacy and safety of depemokimab Trial start: Recruiting
in participants with CRSwNP Q2 2022
NCT05281523
---------------- ------------------------------------------- ------------- -----------
OCEAN (EGPA) III Efficacy and safety of depemokimab Trial start: Recruiting
compared with mepolizumab Q3 2022
NCT05263934 in adults with relapsing
or refractory EGPA
---------------- ------------------------------------------- ------------- -----------
DESTINY (HES) III A 52-week, randomised, placebo-controlled, Trial start: Recruiting
double-blind, parallel group, Q4 2022
NCT05334368 multicentre trial of depemokimab
in adults with uncontrolled
HES receiving standard of
care (SoC) therapy
---------------- ------------------------------------------- ------------- -----------
Opportunity driven
daprodustat (oral hypoxia-inducible factor prolyl hydroxylase inhibitor)
Daprodustat is currently under regulatory review with the US FDA
and EMA. Regulatory decisions are anticipated in the first half of
2023.
When left untreated or undertreated, anaemia of CKD is associated
with poor clinical outcomes and leads to a substantial burden on
patients and healthcare systems. There remains an unmet need for
convenient treatment options with efficacy and safety comparable
to current treatments.
Key phase III trials for daprodustat:
Trial name Phase Design Timeline Status
(population)
ASC-D (Dialysis III A randomised, open-label Reported Complete;
subjects with (sponsor-blind), active-controlled, primary
anaemia of CKD) parallel-group, multi-centre, endpoint
event driven trial in dialysis met
NCT02879305 subjects with anaemia associated
with chronic kidney disease
to evaluate the safety and
efficacy of daprodustat compared
to recombinant human erythropoietin,
following a switch from erythropoietin-stimulating
agents
------ ---------------------------------------------------- --------- ----------
ASC-ID (Incident III A 52-week open-label (sponsor-blind), Reported Complete;
Dialysis subjects randomised, active-controlled, primary
with anaemia parallel-group, multi-centre endpoint
of CKD) trial to evaluate the efficacy met
and safety of daprodustat
NCT03029208 compared to recombinant human
erythropoietin in subjects
with anaemia of chronic kidney
disease who are initiating
dialysis
------ ---------------------------------------------------- --------- ----------
ASC-TD (Dialysis III A randomised, double-blind, Reported Complete;
subjects with active-controlled, parallel-group, primary
anaemia of CKD) multi-centre trial in haemodialysis endpoint
participants with anaemia met
NCT03400033 of chronic kidney disease
to evaluate the efficacy,
safety, and pharmacokinetics
of three-times weekly dosing
of daprodustat compared to
recombinant human erythropoietin,
following a switch from recombinant
human erythropoietin or its
analogues
------ ---------------------------------------------------- --------- ----------
ASC-ND (Non-dialysis III A randomised, open-label Reported Complete;
subjects with (sponsor-blind), active-controlled, primary
anaemia of CKD) parallel-group, multi-centre, endpoint
event driven trial in non-dialysis met
NCT02876835 subjects with anaemia of
chronic kidney disease to
evaluate the safety and efficacy
of daprodustat compared to
darbepoetin alfa
------ ---------------------------------------------------- --------- ----------
ASC-NHQ (Non-dialysis III A 28-week, randomised, double-blind, Reported Complete;
subjects with placebo-controlled, parallel-group, primary
anaemia of CKD) multi-centre, trial in recombinant endpoint
human erythropoietin (rhEPO) met
NCT03409107 naïve non-dialysis participants
with anaemia of chronic kidney
disease to evaluate the efficacy,
safety, and effects on quality
of life of daprodustat compared
to placebo
------ ---------------------------------------------------- --------- ----------
Reporting definitions
Total, Continuing and Adjusted results
Total reported results represent the Group's overall performance
including discontinued operations. Continuing results represents
performance excluding discontinued operations.
GSK also uses a number of adjusted, non-IFRS, measures to report
the performance of its business. Adjusted results and other non-IFRS
measures may be considered in addition to, but not as a substitute
for or superior to, information presented in accordance with IFRS.
Adjusted results are defined on page 39 and other non-IFRS measures
are defined below and are based on continuing operations.
Free cash flow from continuing operations
Free cash flow is defined as the net cash inflow/outflow from continuing
operating activities less capital expenditure on property, plant
and equipment and intangible assets, contingent consideration payments,
net finance costs, and dividends paid to non-controlling interests,
contributions from non-controlling interests plus proceeds from the
sale of property, plant and equipment and intangible assets, and
dividends received from joint ventures and associates (all attributable
to continuing operations). It is used by management for planning
and reporting purposes and in discussions with and presentations
to investment analysts and rating agencies. Free cash flow growth
is calculated on a reported basis. A reconciliation of net cash inflow
from continuing operations to free cash flow from continuing operations
is set out on page 57 .
Free cash flow conversion
Free cash flow conversion is free cash flow from continuing operations
as a percentage of profit attributable to shareholders from continuing
operations.
Working capital
Working capital represents inventory and trade receivables less trade
payables.
CER and AER growth
In order to illustrate underlying performance, it is the Group's
practice to discuss its results in terms of constant exchange rate
(CER) growth. This represents growth calculated as if the exchange
rates used to determine the results of overseas companies in Sterling
had remained unchanged from those used in the comparative period.
CER% represents growth at constant exchange rates. GBP% or AER% represents
growth at actual exchange rates.
Total Net debt
Net debt is defined as total borrowings less cash, cash equivalents,
liquid investments, and short-term loans to third parties that are
subject to an insignificant risk of change in value.
Share Consolidation
Shareholders received 4 new Ordinary shares with a nominal value
of 31 1/4 pence each for every 5 existing Ordinary share which had
a nominal value of 25 pence each. Earnings per share, diluted earnings
per share, adjusted earnings per share and dividends per share were
retrospectively adjusted to reflect the Share Consolidation in all
the periods presented.
Earnings per share
Earnings per share has been retrospectively adjusted for the Share
Consolidation on 18 July 2022, applying a ratio of 4 new Ordinary
shares for every 5 existing Ordinary shares.
Total Earnings per share
Unless otherwise stated, Total earnings per share refers to Total
basic earnings per share.
Total Operating Margin
Total Operating margin is operating profit divided by turnover.
COVID-19 solutions
COVID-19 solutions include the sales of pandemic adjuvant and other
COVID-19 solutions including vaccine manufacturing and Xevudy and
the associated costs but does not include reinvestment in R&D. This
categorisation is used by management and we believe is helpful to
investors through providing clarity on the results of the Group by
showing the contribution to growth from COVID-19 solutions .
General Medicines
General Medicines are usually prescribed in the primary care or community
settings by general healthcare practitioners. For GSK, this includes
medicines in inhaled respiratory, dermatology, antibiotics and other
diseases.
Specialty Medicines
Specialty Medicines are typically prescription medicines used to
treat complex or rare chronic conditions. For GSK, this comprises
medicines in infectious diseases, HIV, oncology, immunology and respiratory.
Brand names and partner acknowledgements
Brand names appearing in italics throughout this document are trademarks
of GSK or associated companies or used under licence by the Group.
Guidance, assumptions and cautionary statements
2023 guidance
GSK expects 2023 turnover to increase between 6 to 8 per cent, Adjusted
operating profit to increase between 10 to 12 per cent and Adjusted
earnings per share to increase between 12 to 15 per cent. T his guidance
is provided at CER and excludes any contributions from COVID-19 solutions.
Assumptions related to 2023 guidance
In outlining the guidance for 2023, the Group has made certain assumptions
about the healthcare sector, the different markets in which the Group
operates and the delivery of revenues and financial benefits from
its current portfolio, pipeline and restructuring programmes. Due
to the phasing of quarterly results in 2022 and the resulting comparators,
GSK expects turnover and Adjusted operating profit growth to be slightly
lower in the first half of 2023 including a challenging comparator
in Q1 2022 and somewhat higher in the second half, relative to full-year
expectations. Despite the recovery of healthcare systems, uncertain
economic conditions prevail across many markets in which GSK operates
and we continue to expect to see variability in performance between
quarters.
We expect sales of Specialty Medicines to increase mid to high single-digit
per cent, sales of Vaccines to increase mid-teens per cent and sales
of General Medicines to decrease slightly.
These planning assumptions as well as operating profit guidance and
dividend expectations assume no material interruptions to supply
of the Group's products, no material mergers, acquisitions or disposals,
no material litigation or investigation costs for the Company (save
for those that are already recognised or for which provisions have
been made) and no change in the Group's shareholdings in ViiV Healthcare.
The assumptions also assume no material changes in the healthcare
environment or unexpected significant changes in pricing as a result
of government or competitor action. The 2023 guidance factors in
all divestments and product exits announced to date.
The Group's guidance assumes successful delivery of the Group's integration
and restructuring plans. Material costs for investment in new product
launches and R&D have been factored into the expectations given.
Given the potential development options in the Group's pipeline,
the outlook may be affected by additional data-driven R&D investment
decisions. The guidance is given on a constant currency basis.
Assumptions and cautionary statement regarding forward-looking statements
The Group's management believes that the assumptions outlined above
are reasonable, and that the guidance, outlooks, ambitions and expectations
described in this report are achievable based on those assumptions.
However, given the forward-looking nature of these guidance, outlooks,
ambitions and expectations, they are subject to greater uncertainty,
including potential material impacts if the above assumptions are
not realised, and other material impacts related to foreign exchange
fluctuations, macro-economic activity, the impact of outbreaks, epidemics
or pandemics, such as the COVID-19 pandemic and ongoing challenges
and uncertainties posed by the COVID-19 pandemic for businesses and
governments around the world, changes in legislation, regulation,
government actions or intellectual property protection, product development
and approvals, actions by our competitors, and other risks inherent
to the industries in which we operate.
This document contains statements that are, or may be deemed to be,
"forward-looking statements".
Forward-looking statements give the Group's current expectations
or forecasts of future events. An investor can identify these statements
by the fact that they do not relate strictly to historical or current
facts. They use words such as 'anticipate', 'estimate', 'expect',
'intend', 'will', 'project', 'plan', 'believe', 'target' and other
words and terms of similar meaning in connection with any discussion
of future operating or financial performance. In particular, these
include statements relating to future actions, prospective products
or product approvals, future performance or results of current and
anticipated products, sales efforts, expenses, the outcome of contingencies
such as legal proceedings, dividend payments and financial results.
Other than in accordance with its legal or regulatory obligations
(including under the Market Abuse Regulation, the UK Listing Rules
and the Disclosure and Transparency Rules of the Financial Conduct
Authority), the Group undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise. The reader should, however, consult any additional
disclosures that the Group may make in any documents which it publishes
and/or files with the SEC. All readers, wherever located, should
take note of these disclosures. Accordingly, no assurance can be
given that any particular expectation will be met and investors are
cautioned not to place undue reliance on the forward-looking statements.
All outlooks, ambitions and expectations should be read together
with pages 5-7 of the Stock Exchange announcement relating to an
update to investors dated 23 June 2021, paragraph 19 of Part 7 of
the Circular to shareholders relating to the demerger of Haleon dated
1 June 2022 and the Guidance, assumptions and cautionary statements
in this Q4 2022 earnings release.
Forward-looking statements are subject to assumptions, inherent risks
and uncertainties, many of which relate to factors that are beyond
the Group's control or precise estimate. The Group cautions investors
that a number of important factors, including those in this document,
could cause actual results to differ materially from those expressed
or implied in any forward-looking statement. Such factors include,
but are not limited to, those discussed under Item 3.D 'Risk Factors'
in the Group's Annual Report on Form 20-F for 2021 and any impacts
of the COVID-19 pandemic. Any forward looking statements made by
or on behalf of the Group speak only as of the date they are made
and are based upon the knowledge and information available to the
Directors on the date of this report.
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END
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