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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Gsk Plc | LSE:GSK | London | Ordinary Share | GB00BN7SWP63 | ORD 31 1/4P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
12.50 | 0.76% | 1,653.00 | 1,654.00 | 1,655.00 | 1,655.50 | 1,634.00 | 1,638.50 | 3,577,329 | 16:35:15 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Pharmaceutical Preparations | 30.33B | 4.93B | 1.1970 | 13.82 | 68.12B |
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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FR BBMLTMTIJBRJ
(END) Dow Jones Newswires
February 01, 2023 02:00 ET (07:00 GMT)
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