6-K
GSK plc (GSK)
6-K
2022-07-27
For: 2022-07-27
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April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2022
Commission File Number 001-15170
GSK plc
(Translation of registrant's name into English)
980 Great West Road, Brentford, Middlesex, TW8 9GS
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F . . . .X. . . . Form 40-F . . . . . . . .
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
| Issued:<br>Wednesday, 27 July 2022, London U.K. | |
|---|---|
| GSK delivers strong Q2 2022 sales of £6.9 billion +19% at AER,<br>+13% at CER and Total EPS1<br>from continuing operations2<br>17.5p -42% AER, -58% CER; Adjusted EPS<br><br><br>of 34.7p +23% AER, +6% CER | |
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| Highlights | |
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| Strong commercial execution across Specialty Medicines, Vaccines<br>and General Medicines drives double-digit sales growth | |
| ● | Total<br>sales: 6.9 billion +19% AER, +13% CER, excluding COVID-19<br>solutions +16% AER, +10% CER |
| - | |
| - | |
| - | |
| Continued cost discipline supports delivery of improved adjusted<br>operating margin | |
| ● | Total<br>continuing operating margin 16%. Total EPS 20.8p -40% AER, -53%<br>CER; Total continuing EPS 17.5p -42% AER, -58% CER; primarily<br>reflecting increased contingent consideration charges driven by<br>exchange rates and adverse comparison<br>due to a credit for the revaluation of deferred tax in Q2<br>2021 |
| ● | Adjusted operating margin 29%. Adjusted operating profit growth<br>+22% AER, +7% CER. The impact on growth from lower margin COVID-19<br>solutions was approximately -16% AER, -14% CER |
| ● | Adjusted EPS 34.7p +23% AER, +6% CER. The impact on growth from<br>lower margin COVID-19 solutions was approximately -20% AER,<br>-18% CER |
| ● | Q2 2022 continuing cash generated from operations 1.6<br>billion. Free cash flow 0.3 billion |
| Strengthening late-stage R&D pipeline with positive data<br>read-outs and strategic business development | |
| ● | US FDA<br>approval for Priorix (MMR<br>vaccine); Vocabria plus<br>rilpivirine approval in Japan for HIV; Cervarix approval in China for<br>cancer-causing human papillomavirus |
| ● | Positive<br>phase III high-level results for respiratory syncytial virus<br>vaccine candidate in older adults. Full results to be presented at<br>an upcoming scientific meeting with regulatory submissions<br>anticipated in H2 2022 |
| ● | Proposed<br>acquisition of Affinivax provides access to next-generation phase<br>II 24-valent pneumococcal vaccine candidate and innovative<br>MAPSTM technology |
| ● | Promising<br>phase IIb interim data presented for bepirovirsen, a potential new<br>treatment for chronic hepatitis B. Phase III monotherapy trial is<br>anticipated to start in H1 2023 |
| ● | Completed acquisition of Sierra Oncology on 1 July 2022. Data from<br>momelotinib’s MOMENTUM phase III trial presented at 2022 ASCO<br>Annual Meeting; results showed a statistically significant and<br>clinically meaningful benefit on symptoms, splenic response, and<br>anaemia. NDA submitted to the US FDA |
| ● | Phase<br>III data readouts expected in H2 2022: pentavalent (MenABCWY)<br>meningitis vaccine candidate, otilimab in rheumatoid arthritis,<br>Jemperli in 1L endometrial<br>cancer, and Blenrep in 3L<br>multiple myeloma |
| Improving revenues and margin support confidence in full-year<br>outlooks | |
| ● | Expect<br>2022 sales growth of between 6% to 8% (previously 5% to 7%) and<br>Adjusted operating profit growth of between 13% to 15% (previously<br>12% to 14%); both at CER. Adjusted EPS expected to grow by around<br>1% lower than operating profit. 2022 guidance excludes any<br>contribution from COVID-19 solutions |
| ● | Dividend<br>of 16.25p/share (13p before Share Consolidation) declared for Q2<br>2022. No change to expected dividend of 61.25p/share (49p before<br>Share Consolidation) for FY 2022 |
| Successful demerger and listing of Haleon on 18 July, creating a<br>new global leader in consumer health | |
| ● | Balance<br>sheet strengthened for GSK, through dividend of more than 7<br>billion from Haleon |
All values are in British Pounds.
| Emma Walmsley, Chief Executive Officer, GSK:<br><br><br>“This<br>is GSK’s first set of results as a newly focused biopharma<br>company, and we have delivered an excellent second quarter<br>performance, with strong growth in Specialty Medicines, including<br>HIV, and a record quarter for our shingles vaccine<br>Shingrix. With this momentum in sales and operating profit<br>growth, we have raised our full-year guidance and are confident in<br>delivering the long-term growth outlooks we set out for<br>shareholders last year. We continue to strengthen our pipeline,<br>notably with very positive high-level results from our late-stage<br>RSV vaccine candidate, together with targeted business development<br>acquisitions of Sierra Oncology and Affinivax. These improvements<br>in R&D and operating performance, together with a strengthened<br>post-demerger balance sheet, create new capacity and flexibility<br>for GSK to invest in growth and innovation for patients and<br>shareholders.” | ||||||||||||
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| The Total results<br>are presented in summary on page 2 and under ‘Financial<br>performance’ on pages 9 and 21 and Adjusted results<br>reconciliations are presented on pages 17, 18, 29 and 30. Adjusted<br>results are a non-IFRS measure excluding discontinued operations<br>that may be considered in addition to, but not as a substitute for,<br>or superior to, information presented in accordance with IFRS.<br>Adjusted results are defined on page 37 and £% or AER% growth,<br>CER% growth, free cash flow and other non-IFRS measures are defined<br>on page 68, COVID-19 solutions are also defined on page 68. GSK<br>provides guidance on an Adjusted results basis only, for the<br>reasons set out on page 37. All expectations, guidance and targets<br>regarding future performance and dividend payments should be read<br>together with ‘Guidance, assumptions and cautionary<br>statements’ on pages 69 and 70. | ||||||||||||
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| (1) | Earnings per share<br>have been retrospectively adjusted to reflect the GSK Share<br>Consolidation on 18 July 2022, see details on page 53. | |||||||||||
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| (2) | Consumer<br>Healthcare is now accounted for as a discontinued operation, see<br>details on page 20. | |||||||||||
| Q2 2022 results | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Q2 2022 | Growth | H1 2022 | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | |||||||
| Turnover | 6,929 | 19 | 13 | 14,119 | 28 | 25 | ||||||
| Total<br>continuing operating profit* | 1,081 | (15) | (35) | 3,374 | 36 | 26 | ||||||
| Total<br>EPS | 20.8p | (40) | (53) | 65.7p | 6 | (1) | ||||||
| Total<br>continuing EPS | 17.5p | (42) | (58) | 54.8p | 9 | - | ||||||
| Total<br>discontinued EPS* | 3.3p | (27) | (24) | 10.9p | (4) | (8) | ||||||
| Adjusted<br>operating profit | 2,008 | 22 | 7 | 3,951 | 33 | 26 | ||||||
| Adjusted<br>EPS | 34.7p | 23 | 6 | 67.0p | 36 | 27 | ||||||
| Cash<br>flow from operations attributable<br><br><br>to<br>continuing operations | 1,584 | 17 | 3,936 | >100 | ||||||||
| Free<br>cash flow | 264 | >100 | 1,741 | >100 | ||||||||
| (*) | The<br>amounts presented in the table above for continuing operations and<br>Adjusted results excludes the Consumer Healthcare business<br>discontinued operation. The amounts presented for discontinued EPS<br>are for the Consumer Healthcare business. The presentation of<br>continuing and discontinued operations under IFRS 5 are set out on<br>page 50. | |||||||||||
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| 2022 guidance | ||||||||||||
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| With the momentum from the business performance to date,<br>GSK now expects 2022 sales to increase<br>between 6 to 8 per cent and Adjusted operating profit to increase<br>between 13 to 15 per cent, excluding any contributions from<br>COVID-19 solutions. Adjusted Earnings per share is expected to grow<br>around 1 per cent lower than Operating Profit. We have delivered<br>first half performance ahead of our full year guidance, slightly<br>better than expected, informed by strong business delivery and the<br>dynamics of prior year comparators.<br><br><br><br><br><br>Predominantly reflecting a more challenging H2 2021 sales<br>comparator as well as an expected increase in R&D spend, we<br>expect lower reported growth in the second half. Key external<br>factors that will influence the second half of 2022 include the<br>continued risk from COVID-19 dynamics and possible developments in<br>the current uncertain global economic environment.<br><br><br><br><br><br><br><br><br>Notwithstanding<br>uncertain economic conditions across many markets in which we<br>operate, we observe evidence of healthcare systems recovering and<br>continue to expect full year sales of Specialty Medicines to grow<br>approximately 10% CER and sales of General Medicines to show a<br>slight decrease, primarily reflecting the increased genericisation<br>of established Respiratory medicines. Vaccines sales are now<br>expected to grow at a low to mid-teens percentage at CER for the<br>year. Specifically for Shingrix, we continue to expect strong<br>double-digit growth and record annual sales in 2022, based on<br>strong demand in existing markets and continued geographical<br>expansion, however we do expect sales in the second half to be<br>slightly lower than in H1 2022 due to some channel stocking in the<br>first half in the US.<br><br><br><br><br><br>From Q2<br>2022, the Group presents the Haleon plc (Haleon) business as a<br>discontinued operation according to IFRS 5. Adjusted results<br>excludes profits from discontinued operations. Comparatives have<br>been restated to reflect adjusted results from continuing<br>operations, and guidance is provided on this basis.<br><br><br><br><br><br>Dividend<br>policies and expected pay-out ratios are unchanged for GSK, but the<br>dividends per share have been adjusted for the GSK Share<br>Consolidation completed on 18 July 2022. The future dividend<br>policies and guidance in relation to the expected dividend pay-out<br>in 2022 for GSK are provided on page 35.<br><br><br><br><br><br>2022 COVID-19 solutions expectations<br><br><br>The<br>majority of expected COVID-19 solutions sales for 2022 have been<br>achieved in the first half of this year. Based on known binding<br>agreements with governments, we expect that sales of COVID-19<br>solutions will be substantially lower in the second half. Compared<br>with 2021, sales will be at a reduced profit contribution due to<br>the increased proportion of lower margin Xevudy sales. Given the higher than<br>expected sales achieved in the year to date we now expect this to<br>reduce Adjusted Operating profit growth (including COVID-19<br>solutions in both years) by between 4% to 6%. We continue to<br>discuss future opportunities to support governments, healthcare<br>systems, and patients whereby our COVID-19 solutions can address<br>the emergence of any new COVID-19 variant of concern.<br><br><br><br><br><br>All<br>expectations, guidance and targets regarding future performance and<br>dividend payments should be read together with ‘Guidance,<br>assumptions and cautionary statements’ on page 69. If<br>exchange rates were to hold at the closing rates on 30 June 2022<br>($1.21/£1, €1.16/£1 and Yen 165/£1) for the<br>rest of 2022, the estimated positive impact on 2022 Sterling<br>turnover growth for GSK would be 5% and if exchange gains or losses<br>were recognised at the same level as in 2021, the estimated<br>positive impact on 2022 Sterling Adjusted Operating Profit growth<br>for GSK would be 9%. | ||||||||||||
| Demerger of Consumer Healthcare | ||||||||||||
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| On 18<br>July 2022, GSK plc separated its Consumer Healthcare business from<br>the GSK Group to form Haleon, an independent listed company. The<br>separation was effected by way of a demerger of 80.1% of<br>GSK’s 68% holding in the Consumer Healthcare business to GSK<br>shareholders. Following the demerger, 54.5% of Haleon is held in<br>aggregate by GSK Shareholders, 6.0% is held by GSK (including<br>shares received by GSK’s consolidated ESOT trusts) and 7.5%<br>is held by certain Scottish limited partnerships (SLPs) set up to<br>provide a funding mechanism pursuant to which GSK will provide<br>additional funding for GSK’s UK Pension Schemes. The<br>aggregate ownership by GSK (including ownership by the ESOT trusts<br>and SLPs) after the demerger of 13.5% will be initially measured at<br>fair value with changes through profit or loss. Pfizer continues to<br>hold 32% of Haleon after the demerger.<br><br><br><br><br><br>The<br>gain on demerger distribution will be recognised in Q3 2022. The<br>asset distributed was the 54.5% ownership of the Consumer<br>Healthcare business. The assets distributed were reduced by<br>Consumer Healthcare transactions up to 18 July 2022 that included<br>pre-separation dividends declared and settled after the end of Q2<br>2022 and before 18 July 2022. Those dividends included: £10.4<br>billion (£7.1 billion attributable to GSK) of dividends funded<br>by Consumer Healthcare debt that was partially on-lent during Q1<br>2022 and dividends of £0.6 billion (£0.4 billion<br>attributable to GSK) from available cash balances. GSK’s<br>share of the pre-separation dividends funded by debt will result in<br>a reduction of net debt for GSK on demerger (GSK’s share of<br>the pre-separation dividends and loans are eliminated in the<br>consolidated financial statements until demerger). | ||||||||||||
| Share consolidation | ||||||||||||
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| Following<br>completion of the Consumer Healthcare business demerger on 18 July<br>2022, GSK plc Ordinary shares were consolidated in order to<br>maintain share price comparability before and after demerger on 18<br>July 2022. Shareholders of GSK plc received 4 new Ordinary shares<br>for every 5 existing Ordinary shares. Earnings per share, diluted<br>earnings per share, adjusted earnings per share and dividends per<br>share have been retrospectively adjusted to reflect the Share<br>Consolidation in all the periods presented. | ||||||||||||
| Results presentation | ||||||||||||
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| A<br>conference call and webcast for investors and analysts of the<br>half-year and Q2 2022 results will be hosted by Emma Walmsley, CEO,<br>at 12pm BST on 27 July 2022. Presentation materials will be<br>published on www.gsk.com prior to the webcast and a transcript of<br>the webcast will be published subsequently.<br><br><br><br><br><br>Information<br>available on GSK’s website does not form part of, and is not<br>incorporated by reference into, this Results<br>Announcement. | ||||||||||||
| The<br>amounts below are from continuing operations unless otherwise<br>specified. | ||||||||||||
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| Operating performance – Q2 2022 | ||||||||||||
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| Turnover | Q2 2022 | |||||||||||
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| £m | Growth<br><br><br>£% | Growth<br><br><br>CER% | ||||||||||
| Specialty<br>Medicines | 2,704 | 44 | 35 | |||||||||
| Vaccines | 1,715 | 9 | 3 | |||||||||
| General<br>Medicines | 2,510 | 5 | 2 | |||||||||
| Commercial<br>Operations | 6,929 | 19 | 13 | |||||||||
| Total turnover in the quarter was £6,929 million, up 19% at<br>AER, 13% at CER, reflecting strong performance in all three product<br>groups. Commercial Operations turnover excluding pandemic sales<br>grew 16% at AER, 10% at CER.<br><br><br><br><br><br>Specialty Medicines<br><br><br>Specialty<br>Medicines sales in the quarter were £2,704 million, up 44% at<br>AER, 35% at CER, driven by consistent growth in all therapy areas.<br>Specialty Medicines excluding sales of Xevudy were £2,238 million up 20%<br>at AER, 13% at CER. In the quarter, HIV sales were £1,404<br>million with growth up 14% at AER, 7% at CER. Oncology sales in the<br>quarter were £154 million, up 29% at AER, 23% at CER.<br>Immuno-inflammation, Respiratory and Other sales were £680<br>million up 32% at AER, 24% at CER.<br><br><br><br><br><br>Vaccines<br><br><br>Vaccine sales were £1,715 million, up 9% at AER, 3% at CER in<br>total and up 31% at AER, 24% at CER excluding unrepeated 2021<br>pandemic adjuvant sales. The performance reflected a favourable<br>comparator to Q2 2021, which was impacted by COVID-19 related<br>disruptions in several markets, and the strong commercial execution<br>of Shingrix. The growth, however, was partially offset by<br>lower paediatric and adolescent vaccine sales that reflected the<br>normalisation of the US Center for Disease Control (CDC) purchasing<br>patterns.<br><br><br><br><br><br>General Medicines<br><br><br>General<br>Medicines sales in the quarter were £2,510 million, up 5% at<br>AER, 2% at CER, with the impact of generic competition in US,<br>Europe, and Japan offset by Trelegy growth in respiratory and the<br>post-pandemic rebound of the antibiotic market since Q3 2021 in<br>Other General Medicines. General medicines includes £33<br>million (Q2 2021: £34 million) of turnover between GSK and<br>Haleon recorded in continuing operations with an offsetting amount<br>recorded in discontinuing operations.<br><br><br><br><br><br>Operating profit<br><br><br>Total<br>operating profit was £1,081 million compared with £1,275<br>million in Q2 2021. The reduction primarily reflected the higher<br>re-measurement charges for contingent consideration liabilities,<br>partly offset by increased profits on turnover growth of 13% at CER<br>and increased milestone income.<br><br><br><br><br><br>Adjusted<br>operating profit was £2,008 million, 22% higher than Q2 2021<br>at AER and 7% at CER on a turnover increase of 13% at CER. The<br>Adjusted operating margin of 29.0% was 0.9% percentage points<br>higher at AER and 1.5% percentage points lower at CER than in Q2<br>2021. This primarily reflected higher COVID-19 solutions sales at<br>low margin, which reduced Adjusted Operating profit growth by<br>approximately 16% at AER, 14% at CER and reduced the Adjusted<br>operating margin by approximately 4.5 percentage points at AER and<br>4.4 percentage points at CER. This was offset by leverage from<br>strong sales growth across all product groups, beneficial mix, and<br>higher royalty income.<br><br><br><br><br><br>Earnings per share (adjusted to reflect the Share Consolidation on<br>18 July 2022)<br><br><br>Total<br>EPS was 17.5p compared with 30.3p in Q2 2021. The reduction<br>primarily reflects increased charges for remeasurement of<br>contingent consideration liabilities as well as an unfavourable<br>comparison due to a credit of £325 million to Taxation in Q2<br>2021. Adjusted EPS was 34.7p compared with 28.2p in Q2 2021, up 23%<br>at AER, 6% at CER, on a 7% CER increase in Adjusted operating<br>profit. This primarily reflected higher COVID-19 solutions sales at<br>low margin with the reduction to growth from COVID-19 solutions<br>being approximately 20% at AER, 18% at CER. Leverage from growth in<br>sales of Specialty Medicines, beneficial mix, higher royalty income<br>and a lower effective tax rate was partly offset by higher supply<br>chain, freight and distribution costs and higher non-controlling<br>interests.<br><br><br><br><br><br>Cash flow<br><br><br>Cash<br>generated from operations attributable to continuing operations for<br>the quarter was £1,584 million (Q2 2021: £1,357 million).<br>The increase primarily reflected the increase in operating profit<br>including beneficial exchange and favourable timing of collections<br>partly offset by increased contingent consideration payments,<br>adverse timing of profit share payments for Xevudy sales, a higher seasonal<br>increase in inventory and adverse timing of returns and<br>rebates. | ||||||||||||
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| Operating performance – H1 2022 | ||||||||||||
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| Turnover | H1 2022 | |||||||||||
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| £m | Growth<br><br><br>£% | Growth<br><br><br>CER% | ||||||||||
| Specialty<br>Medicines | 5,839 | 69 | 63 | |||||||||
| Vaccines | 3,384 | 21 | 17 | |||||||||
| General<br>Medicines | 4,896 | 3 | 2 | |||||||||
| Commercial<br>Operations | 14,119 | 28 | 25 | |||||||||
| Total<br>turnover in the half year was £14,119 million, up 28% at AER,<br>25% at CER, reflecting strong performance in all three product<br>groups. Commercial Operations turnover, excluding pandemic sales,<br>grew 15% at AER, 12% at CER.<br><br><br><br><br><br>Specialty Medicines<br><br><br>Specialty Medicines sales were £5,839 million, up 69% at AER,<br>63% at CER, driven by consistent growth in all therapy areas.<br>Specialty Medicines, excluding sales of Xevudy, were £4,066 million up 18% at AER, 14% at<br>CER. HIV sales were £2,585 million with growth of 14% at<br>AER,10% at CER. Oncology sales were £281 million, up 23% at<br>AER, 19% at CER. Immuno-inflammation, Respiratory and Other sales<br>were £1,200 million up 26% at AER, 21% at<br>CER.<br><br><br><br><br><br>Vaccines<br><br><br>Vaccines<br>turnover was £3,384 million, up 21% at AER, 17% at CER.<br>Excluding unrepeated 2021 pandemic adjuvant sales, vaccine sales<br>increased 33% at AER, 30% at CER, reflecting a favourable<br>comparator to H1 2021, which was adversely impacted by COVID-19 related disruptions in several markets,<br>and the strong commercial execution of Shingrix, particularly in the US and<br>Europe.<br><br><br><br><br><br>General Medicines<br><br><br>General<br>Medicines sales in the half year were £4,896 million, up 3% at<br>AER, 2% at CER, with the impact of generic competition in US,<br>Europe and Japan offset by Trelegy growth in respiratory and the<br>post-pandemic rebound of the antibiotic market since H2 2021 in<br>Other General Medicines. General medicines includes £76<br>million (H1 2021: £79 million) of turnover between GSK and<br>Haleon recorded in continuing operations with an offsetting amount<br>recorded in discontinued operations.<br><br><br><br><br><br>Operating profit<br><br><br>Total<br>operating profit was £3,374 million compared with £2,485<br>million in H1 2021. This included the £0.9 billion upfront<br>income received from the settlement with Gilead Sciences, Inc.<br>(Gilead) and increased profits on turnover growth of 25% at CER,<br>partly offset by higher re-measurement charges for contingent<br>consideration liabilities.<br><br><br><br><br><br>Adjusted<br>operating profit was £3,951 million, 33% higher at AER and 26%<br>at CER than H1 2021 on a turnover increase of 25% at CER. The<br>Adjusted operating margin of 28.0% was 1.0 percentage points higher<br>at AER and stable at CER compared to H1 2021. This primarily<br>reflected the impact from low margin COVID-19 solutions sales<br>(Xevudy), which reduced<br>Adjusted Operating profit growth by approximately 2% at AER, 1% at<br>CER and reduced the Adjusted operating margin by approximately 3.3<br>percentage points at AER and at CER. This was offset by operating<br>leverage from strong sales growth, beneficial mix, and higher<br>royalty income.<br><br><br><br><br><br>Earnings per share (adjusted to reflect the Share Consolidation on<br>18 July 2022)<br><br><br>Total<br>EPS from continuing operations was 54.8p compared with 50.3p in H1<br>2021. This primarily reflected the £0.9 billion upfront income<br>received from the settlement with Gilead and increased profits on<br>turnover growth of 25% at CER, partly offset by higher<br>re-measurement charges for contingent consideration liabilities as<br>well as an unfavourable comparison due to a credit of £325<br>million to Taxation in Q2 2021. Adjusted EPS was 67.0p compared<br>with 49.3p in H1 2021, up 36% at AER, 27% at CER, on a 26% CER<br>increase in Adjusted operating profit. This included higher<br>COVID-19 solutions sales at low margin with the reduction to growth<br>from COVID-19 solutions being approximately 2% at AER, 2% at CER.<br>Leverage from growth in sales of Specialty Medicines, beneficial<br>mix, higher royalty income and a lower effective tax rate was<br>partly offset by higher supply chain, freight and distribution<br>costs, lower associate income and higher non-controlling<br>interests.<br><br><br><br><br><br>Cash flow<br><br><br>Cash generated from operations attributable to continuing<br>operations for H1 was £3,936 million (H1 2021: £1,759<br>million). The increase primarily reflected a significant increase<br>in operating profit including the upfront income from the<br>settlement with Gilead, favourable exchange and favourable timing<br>of collections and profit share payments for Xevudy sales, partly offset by increased contingent<br>consideration payments reflecting the Gilead settlement and a<br>higher seasonal increase in inventory. | ||||||||||||
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| Q2 2022 pipeline<br>highlights<br>(since 27 April 2022) | ||||||||||||
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| Medicine/vaccine | Trial (indication, presentation) | Event | ||||||||||
| --- | --- | --- | --- | |||||||||
| Regulatory approvals or other regulatory action | Nucala | Severe eosinophilic asthma,<br><br><br>40mg prefilled syringe for<br><br><br>6-11 year olds | Regulatory approval (EU) | |||||||||
| Vocabria/Rekambys (cabotegravir/rilpivirine) | HIV | Regulatory approval (Japan) | ||||||||||
| Priorix | Measles-mumps-rubella | Regulatory approval (US) | ||||||||||
| Cervarix | Human papillomavirus, two-dose vaccine schedule for girls aged 9-14<br>years | Regulatory approval (China) | ||||||||||
| Regulatory submissions or acceptances | momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory submission (US) | |||||||||
| Shingrix | Shingles, at-risk adults aged 18+ years | Regulatory acceptance (Japan) | ||||||||||
| Phase III data readouts or other significant events | bepirovirsen | B-Clear (hepatitis B virus) | Positive phase IIb interim data | |||||||||
| RSV older adult vaccine candidate | RSV, older adults aged 60+ years | Positive phase III data | ||||||||||
| COVID-19 vaccine candidate (SK Bioscience) | COVID-19 | Positive phase III data | ||||||||||
| Anticipated news flow | ||||||||||||
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| Timing | Medicine/vaccine | Trial (indication, presentation) | Event | |||||||||
| --- | --- | --- | --- | |||||||||
| H2 2022 | otilimab | contRAst programme (rheumatoid arthritis) | Phase III data readout | |||||||||
| Blenrep | DREAMM-3 (3L+ multiple myeloma) | Phase III data readout | ||||||||||
| Blenrep | DREAMM-3 (3L+ multiple myeloma) | Regulatory submission (US, EU) | ||||||||||
| Jemperli | RUBY (1L endometrial cancer) | Phase III data readout (interim analysis) | ||||||||||
| Jemperli | PERLA (non-small cell lung cancer) | Phase II data readout | ||||||||||
| momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory submission (EU) | ||||||||||
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Phase III data readout (interim analysis) | ||||||||||
| MenABCWY (gen 1) vaccine candidate | Meningitis ABCWY | Phase III data readout | ||||||||||
| RSV older adult vaccine candidate | RSV, older adults aged 60+ years | Regulatory submission (US) | ||||||||||
| Menveo | Invasive meningococcal disease, liquid formulation | Regulatory decision (US) | ||||||||||
| Rotarix | Rotavirus, liquid formulation | Regulatory decision (US) | ||||||||||
| COVID-19 vaccine candidate (SK Bioscience) | COVID-19 | Regulatory submission (EU) | ||||||||||
| COVID-19 vaccine candidate (SK Bioscience) | COVID-19 | Regulatory decision (EU) | ||||||||||
| COVID-19 vaccine candidate (Sanofi) | COVID-19 | Regulatory submission (US) | ||||||||||
| COVID-19 vaccine candidate (Sanofi) | COVID-19 | Regulatory decision (US) | ||||||||||
| H1 2023 | bepirovirsen | B-Together (hepatitis B virus) | Phase IIb data readout | |||||||||
| daprodustat | ASCEND (anaemia of chronic kidney disease) | Regulatory decision (US, EU) | ||||||||||
| momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory decision (US) | ||||||||||
| Blenrep | DREAMM-8 (2L+ multiple myeloma) | Phase III data readout | ||||||||||
| Blenrep | DREAMM-7 (2L+ multiple myeloma) | Phase III data readout | ||||||||||
| Jemperli | RUBY (1L endometrial cancer) | Regulatory submission (US, EU) | ||||||||||
| letetresgene-autoleucel | IGNYTE-ESO (2L+ synovial sarcoma) | Phase II data readout | ||||||||||
| RSV older adult vaccine candidate | RSV, older adults aged 60+ years | Regulatory decision (US) | ||||||||||
| MenABCWY (gen 1) vaccine candidate | Meningitis ABCWY | Regulatory submission (US) | ||||||||||
| Malaria (fractional dose) vaccine | Malaria | Phase II data readout | ||||||||||
| Covifenz (Medicago) | COVID-19 | Regulatory submission (US) | ||||||||||
| Covifenz (Medicago) | COVID-19 | Regulatory decision (US) | ||||||||||
| H2 2023 | otilimab | contRAst programme (rheumatoid arthritis) | Regulatory submission (US, EU) | |||||||||
| linerixibat | GLISTEN (cholestatic pruritus in primary biliary<br>cholangitis) | Phase III data readout | ||||||||||
| Blenrep | DREAMM-3 (3L+ multiple myeloma) | Regulatory decision (US, EU) | ||||||||||
| Blenrep | DREAMM-8 (2L+ multiple myeloma) | Regulatory submission (US, EU) | ||||||||||
| Blenrep | DREAMM-7 (2L+ multiple myeloma) | Regulatory submission (US, EU) | ||||||||||
| Jemperli | RUBY (1L endometrial cancer) | Regulatory decision (US) | ||||||||||
| momelotinib | MOMENTUM (myelofibrosis with anaemia) | Regulatory decision (EU) | ||||||||||
| Zejula | FIRST (1L maintenance ovarian cancer) | Phase III data readout | ||||||||||
| gepotidacin | EAGLE (uncomplicated urinary tract infection) | Regulatory submission (US, EU) | ||||||||||
| Refer<br>to pages 59 to 66 for further details on several key medicines and<br>vaccines in development by therapy area. | ||||||||||||
| --- | ||||||||||||
| Contents | Page | |||||||||||
| --- | --- | |||||||||||
| Q2 2022<br>R&D pipeline highlights | 2 | |||||||||||
| Financial<br>performance – Q2 2022 | 9 | |||||||||||
| Financial<br>performance – H1 2022 | 21 | |||||||||||
| Cash<br>generation | 33 | |||||||||||
| Returns<br>to shareholders | 35 | |||||||||||
| Total<br>and Adjusted results | 37 | |||||||||||
| Income<br>statement – three months and six months ended 30 June<br>2022 | 39 | |||||||||||
| Statement<br>of comprehensive income – three months and six months ended<br>30 June 2022 | 40 | |||||||||||
| Balance<br>sheet | 44 | |||||||||||
| Statement<br>of changes in equity | 45 | |||||||||||
| Cash<br>flow statement – six months ended 30 June 2022 | 46 | |||||||||||
| Segment<br>information | 47 | |||||||||||
| Legal<br>matters | 49 | |||||||||||
| Additional<br>information | 50 | |||||||||||
| Reconciliation<br>of cash flow to movements in net debt | 58 | |||||||||||
| Net<br>debt analysis | 58 | |||||||||||
| Free<br>cash flow reconciliation | 58 | |||||||||||
| R&D<br>commentary | 59 | |||||||||||
| Principal<br>risks and uncertainties | 67 | |||||||||||
| Reporting<br>definitions | 68 | |||||||||||
| Guidance,<br>assumptions and cautionary statements | 69 | |||||||||||
| Directors’<br>responsibility statement | 71 | |||||||||||
| Independent<br>review report | 72 | |||||||||||
| Contacts | ||||||||||||
| --- | ||||||||||||
| GSK plc (LSE/NYSE:GSK) is a global biopharma company with a purpose<br>to unite science, technology, and talent to get ahead of disease<br>together. Find out more at www.gsk.com. | ||||||||||||
| GSK enquiries: | ||||||||||||
| --- | --- | --- | --- | |||||||||
| Media | Tim<br>Foley | +44 (0)<br>20 8047 5502 | (London) | |||||||||
| Kathleen<br>Quinn | +1 202<br>603 5003 | (Washington) | ||||||||||
| Investor<br>Relations | Nick<br>Stone | +44 (0)<br>7717 618834 | (London) | |||||||||
| James<br>Dodwell | +44 (0)<br>7881 269066 | (London) | ||||||||||
| Mick<br>Readey | +44 (0)<br>7990 339653 | (London) | ||||||||||
| Joshua<br>Williams | +44 (0)<br>7385 415719 | (London) | ||||||||||
| Jeff<br>McLaughlin | +1 215<br>589 3774 | (Philadelphia) | ||||||||||
| Registered in England & Wales:<br><br><br>No. 3888792 | ||||||||||||
| Registered Office:<br><br><br>980 Great West Road<br><br><br>Brentford, Middlesex<br><br><br>TW8 9GS | ||||||||||||
| Financial performance<br>– Q2 2022 | ||||||||||||
| --- | ||||||||||||
| Total results | ||||||||||||
| --- | ||||||||||||
| The<br>Total results for the Group are set out below. | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021<br><br><br>£m | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Continuing Operations<br><br><br>Turnover | 6,929 | 5,838 | 19 | 13 | ||||||||
| Cost of<br>sales | (2,176) | (1,708) | 27 | 28 | ||||||||
| Gross<br>profit | 4,753 | 4,130 | 15 | 7 | ||||||||
| Selling,<br>general and administration | (2,066) | (1,689) | 22 | 19 | ||||||||
| Research<br>and development | (1,242) | (1,167) | 6 | 2 | ||||||||
| Royalty income | 159 | 77 | >100 | >100 | ||||||||
| Other<br>operating income/(expense) | (523) | (76) | ||||||||||
| Operating<br>profit | 1,081 | 1,275 | (15) | (35) | ||||||||
| Finance<br>income | 21 | 4 | ||||||||||
| Finance<br>expense | (204) | (189) | ||||||||||
| Loss on<br>disposal of interest in associates | - | (36) | ||||||||||
| Share<br>of after tax (losses)/profits of associates and<br><br><br>joint<br>ventures | (2) | 16 | ||||||||||
| Profit before taxation | 896 | 1,070 | (16) | (40) | ||||||||
| Taxation | (150) | 201 | ||||||||||
| Tax rate % | 16.7% | (18.8)% | ||||||||||
| Profit after taxation from continuing operations | 746 | 1,271 | (41) | (58) | ||||||||
| Profit<br>after taxation from discontinued operations | 229 | 267 | (14) | (16) | ||||||||
| Profit after taxation for the period | 975 | 1,538 | (37) | (51) | ||||||||
| Profit<br>attributable to non-controlling interest from<br><br><br>continuing<br>operations | 40 | 57 | ||||||||||
| Profit<br>attributable to shareholders from continuing<br><br><br>operations | 706 | 1,214 | ||||||||||
| Profit<br>attributable to non-controlling interest from<br><br><br>discontinued<br>operations | 97 | 86 | ||||||||||
| Profit<br>attributable to shareholders from discontinued<br><br><br>operations | 132 | 181 | ||||||||||
| 975 | 1,538 | (37) | (51) | |||||||||
| Total<br>profit attributable to non-controlling interest | 137 | 143 | ||||||||||
| Total<br>profit attributable to shareholders | 838 | 1,395 | ||||||||||
| 975 | 1,538 | |||||||||||
| Earnings<br>per share from continuing operations | 17.5p | 30.3p | (42) | (58) | ||||||||
| Earnings<br>per share from discontinued operations | 3.3p | 4.5p | (27) | (24) | ||||||||
| Total earnings per share | 20.8p | 34.8p | (40) | (53) | ||||||||
| Adjusted results | ||||||||||||
| --- | ||||||||||||
| The<br>Adjusted results for the Group are set out below. Adjusted results<br>are from continuing operations and exclude the Consumer Healthcare<br>business (see details in page 52). Reconciliations between Total<br>results and Adjusted results for Q2 2022 and Q2 2021 are set out on<br>pages 17 and 18. | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | %<br>of<br><br><br>turnover | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Turnover | 6,929 | 100 | 19 | 13 | ||||||||
| Cost of<br>sales | (1,970) | (28.4) | 29 | 31 | ||||||||
| Selling,<br>general and administration | (1,955) | (28.2) | 19 | 16 | ||||||||
| Research<br>and development | (1,155) | (16.7) | 4 | (1) | ||||||||
| Royalty<br>income | 159 | 2.3 | >100 | 100 | ||||||||
| Adjusted<br>operating profit | 2,008 | 29.0 | 22 | 7 | ||||||||
| Adjusted<br>profit before tax | 1,825 | 24 | 7 | |||||||||
| Adjusted<br>profit after tax | 1,548 | 26 | 9 | |||||||||
| Adjusted<br>profit attributable to shareholders | 1,398 | 24 | 7 | |||||||||
| Adjusted<br>earnings per share | 34.7p | 23 | 6 | |||||||||
| Operating profit by segment | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | %<br>of<br><br><br>turnover | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Commercial<br>Operations | 3,304 | 47.7 | 15 | 6 | ||||||||
| Research<br>and Development | (1,152) | 3 | (2) | |||||||||
| Segment<br>profit | 2,152 | 31.1 | 23 | 10 | ||||||||
| Corporate<br>& other unallocated costs | (144) | 31 | 66 | |||||||||
| Adjusted<br>operating profit | 2,008 | 29.0 | 22 | 7 | ||||||||
| Turnover | ||||||||||||
| --- | ||||||||||||
| Commercial<br>Operations | ||||||||||||
| --- | ||||||||||||
| Q2 2022 | ||||||||||||
| --- | --- | --- | --- | |||||||||
| £m | Growth<br><br><br>£% | Growth<br><br><br>CER% | ||||||||||
| HIV | 1,404 | 14 | 7 | |||||||||
| Oncology | 154 | 29 | 23 | |||||||||
| Immuno-inflammation,<br>respiratory and other | 680 | 32 | 24 | |||||||||
| 2,238 | 20 | 13 | ||||||||||
| Pandemic | 466 | >100 | >100 | |||||||||
| Specialty Medicines | 2,704 | 44 | 35 | |||||||||
| Meningitis | 235 | 4 | - | |||||||||
| Influenza | 32 | (3) | (9) | |||||||||
| Shingles | 731 | >100 | >100 | |||||||||
| Established<br>Vaccines | 717 | (5) | (9) | |||||||||
| 1,715 | 31 | 24 | ||||||||||
| Pandemic<br>Vaccines | - | (100) | (100) | |||||||||
| Vaccines | 1,715 | 9 | 3 | |||||||||
| Respiratory | 1,649 | 9 | 4 | |||||||||
| Other<br>General Medicines | 861 | (1) | (2) | |||||||||
| General Medicines | 2,510 | 5 | 2 | |||||||||
| Commercial Operations | 6,929 | 19 | 13 | |||||||||
| US | 3,317 | 19 | 7 | |||||||||
| Europe | 1,549 | 23 | 25 | |||||||||
| International | 2,063 | 15 | 14 | |||||||||
| Commercial Operations by region | 6,929 | 19 | 13 | |||||||||
| Total<br>turnover in the quarter was £6,929 million, up 19% at AER, 13%<br>at CER, reflecting strong performance in all three product groups.<br>Commercial Operations turnover, excluding pandemic sales, grew 16%<br>at AER, 10% at CER. Specialty Medicines included £466 million<br>sales of Xevudy, which<br>contributed 24 percentage points of growth in the quarter at AER,<br>22 percentage points at CER. Vaccines growth reflected strong<br>Shingrix performance<br>assisted by demand recovery and channel inventory build in the US,<br>partially offset by pandemic adjuvant<br>sales in Q2 2021. General Medicines reflected the recovery<br>of the antibiotics market and in particular the strong performance<br>of Trelegy in respiratory<br>in all regions.<br><br><br><br><br><br>Specialty Medicines<br><br><br><br><br><br>Specialty<br>Medicines sales in the quarter were £2,704 million, up 44% at<br>AER, 35% at CER, driven by consistent growth in all therapy areas.<br>Specialty Medicines excluding sales of Xevudy were £2,238 million up 20%<br>at AER, 13% at CER.<br><br><br><br><br><br>HIV<br><br><br>HIV<br>sales were £1,404 million with growth up 14% at AER, 7% at CER<br>in the quarter. The performance benefitted from strong patient<br>demand for the new HIV medicines (Dovato, Cabenuva, Juluca, Rukobia, and Apretude) and a favourable US pricing<br>mix, however, this was partially offset by the unfavourable phasing<br>of Tivicay tenders. US<br>pricing contributed 7% at AER, 4% at CER, with tenders reducing<br>growth by 5% at AER, 6% at CER in the quarter.<br><br><br><br><br><br>New HIV<br>medicines delivered for the first-time quarterly sales of over half<br>a billion pounds at £571 million, up 73% at AER, 63% at CER,<br>representing 41% of the total HIV portfolio compared to 27% in the<br>same quarter last year. Sales of the oral two drug regimens<br>Dovato and Juluca were £320 million and<br>£152 million, respectively, with a combined growth of 49% at<br>AER, 41% at CER. Cabenuva,<br>the first long-acting injectable for the treatment of human<br>immunodeficiency virus type-1 (HIV-1) infection, recorded sales of<br>£72 million. Apretude,<br>the first long-acting prevention injectable for the prevention of<br>HIV-1, delivered sales of £8 million.<br><br><br><br><br><br>Oncology<br><br><br>Oncology<br>sales in the quarter were £154 million, up 29% at AER, 23% at<br>CER. Zejula sales were<br>£120 million, up 22% at AER, 16% at CER, and Blenrep, sales of £30 million up<br>43% at AER, 33% at CER; the performance reflected growth in<br>recently launched markets.<br><br><br><br><br><br>Immuno-inflammation,<br>Respiratory and Other<br><br><br>Immuno-inflammation,<br>Respiratory and Other sales were £680 million up 32% at AER,<br>24% at CER. Benlysta sales<br>were £297 million, up<br>39% at AER, 29% at CER reflecting strong underlying demand in US<br>and worldwide. Nucala<br>sales were £367<br>million, up 26% at AER, 19% at CER including US sales of £236<br>million up 30% at AER, 18% at CER on continued strong demand and<br>launch of additional indications.<br><br><br><br><br><br>Pandemic<br><br><br>In the<br>period, sales of Xevudy<br>were £466 million, with the overwhelming majority of sales<br>achieved in Europe £123 million and International £320<br>million. In the US, the government contract was completed in Q1<br>2022.<br><br><br><br><br><br>Vaccines<br><br><br><br><br><br>Vaccine<br>sales were £1,715 million, up 9% at AER, 3% at CER in total<br>and up 31% at AER, 24% at CER<br>excluding unrepeated 2021 pandemic adjuvant sales. The performance<br>reflected a favourable comparator to Q2 2021, which was adversely<br>impacted by COVID-19 related<br>disruptions in several markets, and the strong commercial execution<br>of Shingrix,<br>particularly in the US and Europe. The<br>growth, however, was partially offset by lower paediatric<br>and adolescent vaccine sales that reflected the normalisation of the US CDC purchasing<br>patterns.<br><br><br><br><br><br>Shingles<br><br><br>Shingrix sales more than doubled to £731 million<br>primarily due to demand recovery, strong commercial execution aimed<br>at shifting the shingles vaccination season forward, and<br>earlier-than- expected channel inventory build in the US, and<br>higher demand in Germany. All regions grew significantly in Q2<br>2022, with 40% of the growth contributed from outside of the US.<br>Shingrix is now available<br>in 23 countries including four new launches in the last<br>quarter.<br><br><br><br><br><br>Established<br>Vaccines<br><br><br>Established Vaccines decreased 5% at AER, 9% at CER to £717<br>million reflecting unfavourable CDC<br>purchasing patterns and competitive pressure for<br>Infanrix/Pediarix<br>in the US, lower International sales of Cervarix, MMR/V vaccines and Synflorix, and the negative impact of a CDC stockpile<br>borrow for Rotarix, partially offset by hepatitis vaccines growth in<br>the US and Europe.<br><br><br><br><br><br>General Medicines<br><br><br><br><br><br>General<br>Medicines sales in the quarter were £2,510 million, up 5% at<br>AER, 2% at CER, with the adverse impact of generic competition in<br>US, Europe, and Japan offset by Trelegy growth in respiratory and the<br>post-pandemic rebound of the antibiotic market since Q3 2021 in<br>Other General Medicines.<br><br><br><br><br><br>Respiratory<br><br><br>Respiratory<br>sales were £1,649 million, up 9% at AER, 4% at CER. The<br>performance was driven by Trelegy sales of £467 million, up<br>60% at AER, 50% at CER with strong growth in all regions and some<br>benefit of prior period Returns and Rebates (RAR) adjustments in<br>the US. Advair/Seretide<br>sales of £262 million continue to be adversely impacted by<br>generic competition, decreasing 24% at AER, 27% at CER. Overall,<br>there was no significant impact of prior period RAR adjustments in<br>the quarter.<br><br><br><br><br><br>Other General<br>Medicines<br><br><br>Other<br>General Medicines sales were £861 million, down 1% at AER, 2%<br>at CER. Augmentin sales<br>were £130 million, up 43% at AER, 45% at CER reflecting the<br>post-pandemic rebound of the antibiotic since Q3 2021. This offsets<br>the ongoing adverse impact of generic competition and approximately<br>two percentage points impact from the divestment of cephalosporin<br>products in Q4 2021.<br><br><br><br><br><br>General medicines includes £33 million (Q2 2021: £34<br>million) of turnover between GSK and Haleon recorded in continuing<br>operations with an offsetting amount recorded in discontinuing<br>operations.<br><br><br><br><br><br>By<br>Region<br><br><br><br><br><br>US<br><br><br>In the<br>US, sales were £3,317 million, up 19% at AER, 7% at CER. There<br>were £23 million sales of Xevudy in the quarter following<br>completion of the government contract in Q1 2022.<br><br><br><br><br><br>In<br>Specialty Medicines, HIV sales of £894 million were up 25% at<br>AER, 13% at CER. New HIV medicines delivered sales of £377<br>million up 75% at AER, 59% at CER driven by strong patient demand<br>for Dovato, Cabenuva,<br>Juluca, Apretude, and Rukobia as well as favourable pricing<br>mix. Nucala and<br>Benlysta both continued to<br>grow double digits reflecting ongoing strong demand. Oncology sales<br>increased 22% at AER, 10% at CER, despite diagnosis and treatment<br>rates continuing to be adversely impacted by the<br>pandemic.<br><br><br><br><br><br>Vaccine<br>sales were £897 million, up 13% at AER, 2% at CER. Vaccine<br>sales excluding the impact of COVID-19 vaccine adjuvant sales in Q2<br>2021 grew 53% at AER, 38% at CER. Growth was driven by Shingrix reflecting demand recovery,<br>strong commercial execution, and channel inventory build. Growth<br>was reduced by lower paediatric and adolescent vaccines sales<br>reflecting the normalisation of CDC purchasing<br>patterns.<br><br><br><br><br><br>General<br>Medicines sales were £933 million, up 11% at AER, stable at<br>CER, driven by strong Trelegy performance, up 74% at AER, 58%<br>at CER on growth of the single inhaler triple therapy market and<br>demand.<br><br><br><br><br><br>Europe<br><br><br>In<br>Europe, sales were £1,549 million, up 23% at AER, 25% at CER,<br>including Xevudy sales of<br>£123 million contributing ten percentage points of growth at<br>AER and CER.<br><br><br><br><br><br>In<br>Specialty Medicines, HIV sales were £336 million, up 15% at<br>AER, 17% at CER. The performance predominantly reflected strong<br>patient demand for Dovato<br>with sales of £118 million during the period. Benlysta in immunology, Nucala in respiratory, and several<br>Oncology medicines also delivered strong double-digit growth in the<br>quarter.<br><br><br><br><br><br>Vaccine<br>sales were £414 million, up 39% at AER, 42% at CER.<br>Shingrix sales of £151<br>million, >100% at AER and CER, drove the growth particularly in<br>Germany, which benefitted from strong demand.<br><br><br><br><br><br>General<br>Medicines sales were £522 million, decreasing 3% at AER, 2% at<br>CER, with ongoing generic competitive pressures adversely impacting<br>Seretide in respiratory;<br>the performance was partly offset by strong demand for Trelegy. Augmentin grew due to the post-pandemic<br>rebound of the antibiotic market since Q3 2021.<br><br><br><br><br><br>International<br><br><br>International<br>sales were £2,063 million, up 15% at AER, 14% at CER,<br>including Xevudy sales of<br>£320 million contributing 15 percentage points of<br>growth.<br><br><br><br><br><br>In<br>Specialty Medicines, HIV sales were £174 million, decreasing<br>23% at AER, 27% at CER driven by tender phasing. The performance,<br>however, was partially offset by strong Dovato growth. Combined Tivicay and Triumeq sales were £130 million,<br>declining 35% at AER, 40% at CER. Nucala in respiratory and Benlysta in immunology both continued<br>to grow strongly reflecting growth in the biologics market in Japan<br>and inclusion on China’s National Reimbursement Drug<br>List.<br><br><br><br><br><br>Vaccine<br>sales were £404 million, decreasing 15% at AER, 18% at CER.<br>Vaccine sales excluding the impact of COVID-19 vaccine adjuvant<br>sales in Q2 2021 decreased 6% at AER, 8% at CER, primarily<br>reflecting phasing of public tenders.<br><br><br><br><br><br>General<br>Medicines sales were £1,055 million up 6% at AER, 5% at CER.<br>Respiratory sales of £455 million were up 8% at AER, 7% at CER<br>reflecting strong growth of Trelegy, particularly in Japan, China,<br>and Canada. This performance offset the impact of generic<br>competition and lower allergy season in Japan. Other General<br>Medicines sales increased 4% at AER and at CER to £600<br>million, reflecting the growth of Augmentin following the post-pandemic<br>rebound of the antibiotic market since Q3 2022. | ||||||||||||
| --- | ||||||||||||
| Operating performance | ||||||||||||
| --- | ||||||||||||
| Cost of sales<br><br><br>Total<br>cost of sales as a percentage of turnover was 31.4%, and increased<br>2.1 percentage points higher at AER and 4.0 percentage points<br>higher in CER terms than Q2 2021. Adjusted cost of sales as a<br>percentage of turnover was 28.4%, up 2.4 percentage points AER and<br>4.1 at CER compared with Q2 2021. This primarily reflected higher<br>sales of lower margin COVID-19 solutions (Xevudy) compared to Q2 2021, which<br>included £258 million of pandemic adjuvant sales, increasing<br>cost of sales margin by 4.7 percentage points at AER and at CER as<br>well as the impact of increased commodity prices and freight costs.<br>This was partially offset by a favourable mix primarily from<br>increased sales of Shingrix<br>in the US and Europe and increased sales of HIV medicines in the<br>US.<br><br><br><br><br><br>Selling, general and administration<br><br><br>Total<br>SG&A costs as a percentage of turnover were 29.8%, 0.9<br>percentage points higher at AER and 1.7 percentage points higher at<br>CER than in Q2 2021 primarily reflected increased investment in the<br>launch of innovative vaccines and medicines.<br><br><br><br><br><br>Adjusted<br>SG&A costs as a percentage of turnover were 28.2%, stable at<br>AER, 0.7 percentage points higher at CER. Adjusted SG&A costs<br>increased 19% at AER, 16% at CER which primarily reflected an<br>increased level of launch investment in Specialty Medicines<br>particularly HIV and Vaccines including Shingrix to drive post-pandemic<br>recovery demand and support market expansion. The growth in<br>Adjusted SG&A also reflected increased freight and distribution<br>costs and exchange losses on the Vir Biotechnology, Inc.<br>collaboration profit share. This growth was partly offset by the<br>continuing benefit of restructuring and tight control of ongoing<br>costs.<br><br><br><br><br><br>Research and development<br><br><br>Group<br>R&D expenditure from continuing operations was £1,242<br>million (17.9% of turnover), up 6% at AER and 2% at CER. Adjusted<br>R&D expenditure increased in the quarter by 4% at AER, broadly<br>stable at CER, to £1,155 million. This reflected the continued<br>efficiencies delivered from the One R&D restructuring<br>programme, the completion of several late-stage clinical<br>development programmes, and a favourable comparator to Q2 2021,<br>which saw increased levels of R&D investment due to COVID-19<br>pandemic solutions.<br><br><br><br><br><br>In the<br>quarter, GSK increased investment across Vaccine clinical<br>development, including its mRNA technology platforms, continued<br>investment in the late-stage portfolio, and accelerated several<br>early discovery programmes; these investments partly offset the<br>decreases above. In addition, the level of investment increased in<br>Specialty Medicines to support the early-stage HIV portfolio and in<br>respiratory, the phase III programme for depemokimab, a potential<br>new medicine to treat severe asthma. The expenditure in the quarter<br>does not reflect the impact of the acquisition of Sierra Oncology,<br>Inc. which completed on 1 July 2022.<br><br><br><br><br><br>Royalty income<br><br><br>Royalty<br>income was £159 million (Q2 2021: £77 million), up<br>>100% at AER, >100% at CER, primarily reflecting royalty<br>income from Gilead under the settlement and licensing agreement<br>with Gilead and higher sales of Gardasil.<br><br><br><br><br><br>Other operating income/(expense)<br><br><br>Net<br>other operating expense was £523 million (Q2 2021: £76<br>million) primarily reflecting accounting charges of £699<br>million (Q2 2021: £101 million) arising from the<br>re-measurement of contingent consideration liabilities and the<br>liabilities for the Pfizer, Inc. (Pfizer) put option and Pfizer and<br>Shionogi & Co., Ltd. (Shionogi) preferential dividends in ViiV<br>Healthcare. This included a re-measurement charge of £585<br>million (Q2 2021: £125 million) for the contingent<br>consideration liability due to Shionogi, including the unwinding of<br>the discount for £95 million and a charge for £490<br>million primarily from changes to exchange rates as well as<br>adjustments to sales forecasts. This was partly offset by increased<br>milestone income.<br><br><br><br><br><br>Operating profit<br><br><br>Total<br>operating profit was £1,081 million compared with £1,275<br>million in Q2 2021. The reduction primarily reflected the higher<br>re-measurement charges for contingent consideration liabilities,<br>partly offset by increased profits on turnover growth of 13% at CER<br>and increased milestone income.<br><br><br><br><br><br>Adjusted<br>operating profit was £2,008 million, 22% higher than Q2 2021<br>at AER and 7% at CER on a turnover increase of 13% at CER. The<br>Adjusted operating margin of 29.0% was 0.9% percentage points<br>higher at AER and 1.5% percentage points lower at CER than in Q2<br>2021. This primarily reflected the impact from low margin COVID-19<br>solutions sales (Xevudy), which reduced Adjusted Operating profit<br>growth by approximately 16% at AER, 14% at CER and reduced the<br>Adjusted operating margin by approximately 4.5 percentage points at<br>AER and 4.4 percentage points at CER. This was offset by operating<br>leverage from sales growth across all product groups, beneficial<br>mix, and higher royalty income.<br><br><br><br><br><br>Contingent<br>consideration cash payments made to Shionogi and other companies<br>reduce the balance sheet liability and hence are not recorded in<br>the income statement. Total contingent consideration cash payments<br>in Q2 2022 amounted to £404 million (Q2 2021: £205<br>million). These included cash payments made to Shionogi of<br>£395 million (Q2 2021: £203 million).<br><br><br><br><br><br>Adjusted operating profit by business<br><br><br>Commercial<br>Operations operating profit was £3,304 million, up 15% at AER<br>and 6% at CER on a turnover increase of 13% at CER. The operating<br>margin of 47.7% was 1.5 percentage points lower at AER and 3.2<br>percentage points lower at CER than in Q2 2021. This primarily<br>reflected sales of lower margin Xevudy in the quarter compared to Q2<br>2021 which included higher margin pandemic adjuvant sales. This<br>also reflected increased investment behind launches in Specialty<br>Medicines including HIV and Vaccines plus higher commodity, freight<br>and distribution costs. This was partly offset by continued tight<br>control of ongoing costs, benefits from continued restructuring and<br>increased royalty income from Biktarvy sales following the<br>settlement with Gilead in February 2022 and Gardasil<br>sales.<br><br><br><br><br><br>R&D<br>segment operating expenses were £1,152 million, up 3% at AER,<br>down 2% at CER, primarily reflecting continued efficiencies<br>delivered from the One R&D restructuring programme, the<br>completion of several late-stage clinical development programmes,<br>and a favourable comparator to Q2 2021, which saw increased levels<br>of R&D investment due to COVID-19 pandemic solutions. This was<br>partly offset by increased investment in Vaccines including<br>priority investments for mRNA and late stage portfolio and<br>Specialty in early stage HIV and depemokimab.<br><br><br><br><br><br>Net finance costs<br><br><br>Total<br>net finance costs were £183 million compared with £185<br>million in Q2 2021. Adjusted net finance costs were £181<br>million compared with £185 million in Q2 2021.<br><br><br><br><br><br>Taxation<br><br><br>The<br>charge of £150 million represented an effective tax rate on<br>Total results of 16.7% (Q2 2021: 18.8% credit) and reflected the<br>different tax effects of the various Adjusting items. Included in<br>Q2 2021 was a credit of £325 million resulting from the<br>revaluation of deferred tax assets following enactment of the<br>proposed change of UK corporation tax from 19% to 25%. Tax on<br>Adjusted profit amounted to £277 million and represented an<br>effective Adjusted tax rate of 15.2% (Q2 2021: 16.6%).<br><br><br><br><br><br>Issues<br>related to taxation are described in Note 14,<br>‘Taxation’ in the Annual Report 2021. The Group<br>continues to believe it has made adequate provision for the<br>liabilities likely to arise from periods that are open and not yet<br>agreed by relevant tax authorities. The ultimate liability for such<br>matters may vary from the amounts provided and is dependent upon<br>the outcome of agreements with relevant tax<br>authorities.<br><br><br><br><br><br>Non-controlling interests<br><br><br>The<br>allocation of Total earnings to non-controlling interests amounted<br>to £40 million (Q2 2021: £57 million). The decrease was<br>primarily due to an reduced allocation of ViiV Healthcare profits<br>of £41 million (Q2 2021: £60 million) including increased<br>credits for re-measurement of contingent consideration<br>liabilities.<br><br><br><br><br><br>The<br>allocation of Adjusted earnings to non-controlling interests<br>amounted to £150 million (Q2 2021: £99 million). The<br>increase in allocation primarily reflected an increased allocation<br>of ViiV Healthcare profits of £151 million (Q2 2021: £102<br>million).<br><br><br><br><br><br>Earnings per share from continuing operations<br><br><br>Total<br>EPS was 17.5p compared with 30.3p in Q2 2021. The reduction<br>primarily reflected increased charges for remeasurement of<br>contingent consideration liabilities as well as an unfavourable<br>comparison due to a credit of £325 million to Taxation in Q2<br>2021 resulting from the revaluation of deferred tax<br>assets.<br><br><br><br><br><br>Adjusted<br>EPS was 34.7p compared with 28.2p in Q2 2021, up 23% at AER, 6% at<br>CER, on a 7% CER increase in Adjusted operating profit primarily<br>reflecting higher COVID-19 solutions sales at low margin, with the<br>reduction to growth from COVID-19 solutions being approximately 20%<br>at AER, 18% at CER. Operating leverage from growth in sales of<br>Specialty Medicines including HIV and Vaccines, beneficial mix,<br>higher royalty income and a lower effective tax rate was partly<br>offset by higher supply chain, freight and distribution costs and<br>higher non-controlling interests.<br><br><br><br><br><br>Profit and earnings per share from discontinued<br>operations<br><br><br>Discontinued<br>operations include the Consumer Healthcare business and certain<br>Corporate costs directly attributable to the Consumer Healthcare.<br>Profit after taxation from discontinued operations amounted to<br>£229 million (Q2 2021: £267 million) and EPS from<br>discontinued operations was 3.3p, compared with 4.5p in Q2 2021.<br>The reduction in profit and EPS primarily reflected increased<br>separation costs and increased interest costs. For further details<br>see page 52, discontinued operations.<br><br><br><br><br><br>Total earnings per share<br><br><br>Total<br>EPS was 20.8p compared with 34.8p in Q2 2021. The reduction<br>primarily reflects increased charges for remeasurement of<br>contingent consideration liabilities as well as an unfavourable<br>comparison due to a credit of £325 million to Taxation in Q2<br>2021 resulting from the revaluation of deferred tax<br>assets.<br><br><br><br><br><br>Currency impact on Q2 2022 results<br><br><br>The<br>results for Q2 2022 are based on average exchange rates,<br>principally £1/$1.26, £1/€1.18 and £1/Yen 162.<br>Comparative exchange rates are given on page 50. The period-end<br>exchange rates were £1/$1.21, £1/€1.16 and<br>£1/Yen 165.<br><br><br><br><br><br>In Q2<br>2022, turnover was up 19% at AER and 13% at CER. Total EPS from<br>continuing operations was 17.5p compared with 30.3p in Q2 2021.<br>Adjusted EPS was 34.7p compared with 28.2p in Q2 2021, up 23% at<br>AER and 6% at CER. The favourable currency impact primarily<br>reflected the weakening of Sterling against the US Dollar, partly<br>offset by the strengthening in Sterling against the Euro and<br>Japanese Yen. Exchange gains or losses on the settlement of<br>intercompany transactions had a one percent favourable impact on<br>the 17 percentage points currency impact on Adjusted<br>EPS. | ||||||||||||
| --- | ||||||||||||
| Adjusting items<br><br><br>The<br>reconciliations between Total results and Adjusted results for Q2<br>2022 and Q2 2021 are set out below. | ||||||||||||
| --- | ||||||||||||
| Three months ended 30 June 2022 | ||||||||||||
| --- | ||||||||||||
| Total<br><br><br>results<br><br><br>£m | Profit<br>from<br><br><br>discon-<br><br><br>tinued<br><br><br>operations<br><br><br>£m | Intangible<br><br><br>amort-<br><br><br>isation<br><br><br>£m | Intangible<br><br><br>impair-<br><br><br>ment<br><br><br>£m | Major<br><br><br>restruct-<br><br><br>uring<br><br><br>£m | Trans-<br><br><br>action-<br><br><br>related<br><br><br>£m | Divest-<br><br><br>ments,<br><br><br>significant<br><br><br>legal<br>and<br><br><br>other<br><br><br>items<br><br><br>£m | Adjusted<br><br><br>results<br><br><br>£m | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Turnover | 6,929 | 6,929 | ||||||||||
| Cost of<br>sales | (2,176) | 166 | 21 | 10 | 9 | (1,970) | ||||||
| Gross<br>profit | 4,753 | 166 | 21 | 10 | 9 | 4,959 | ||||||
| Selling,<br>general and<br><br><br>administration | (2,066) | 107 | 4 | (1,955) | ||||||||
| Research<br>and development | (1,242) | 26 | 55 | 6 | (1,155) | |||||||
| Royalty<br>income | 159 | 159 | ||||||||||
| Other<br>operating<br><br><br>income/(expense) | (523) | 675 | (152) | - | ||||||||
| Operating profit | 1,081 | 192 | 55 | 134 | 685 | (139) | 2,008 | |||||
| Net<br>finance cost | (183) | 1 | 1 | (181) | ||||||||
| Share<br>of after tax losses<br><br><br>of<br>associates and joint<br><br><br>ventures | (2) | (2) | ||||||||||
| Profit before taxation | 896 | 192 | 55 | 135 | 685 | (138) | 1,825 | |||||
| Taxation | (150) | (41) | (10) | (24) | (78) | 26 | (277) | |||||
| Tax rate % | 16.7% | 15.2% | ||||||||||
| Profit after taxation from<br><br><br>continuing operations | 746 | 151 | 45 | 111 | 607 | (112) | 1,548 | |||||
| Profit after taxation from<br><br><br>discontinued operations | 229 | ((229) | - | |||||||||
| Total profit after taxation<br><br><br>for the period | 975 | 1((229) | 151 | 45 | 111 | 607 | (112) | 1,548 | ||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>continuing<br>operations | 40 | 110 | 150 | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>continuing<br>operations | 706 | 151 | 45 | 111 | 497 | (112) | 1,398 | |||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>discontinued<br>operations | 97 | (97) | - | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>discontinued<br>operations | 132 | (132) | - | |||||||||
| 975 | (229) | 151 | 45 | 111 | 607 | (112) | 1,548 | |||||
| Total profit attributable to<br><br><br>non-controlling interests | 137 | (97) | 110 | 150 | ||||||||
| Total profit attributable to<br><br><br>shareholders | 838 | (132) | 151 | 45 | 111 | 497 | (112) | 1,398 | ||||
| 975 | (229) | 151 | 45 | 111 | 607 | (112) | 1,548 | |||||
| Earnings<br>per share from<br><br><br>continuing<br>operations | 17.5p | 3.8p | 1.1p | 2.8p | 12.3p | (2.8)p | 34.7p | |||||
| Earnings<br>per share from<br><br><br>discontinued<br>operations | 3.3p | (3.3)p | - | |||||||||
| Total earnings per share | 20.8p | (3.3)p | 3.8p | 1.1p | 2.8p | 12.3p | (2.8)p | 34.7p | ||||
| Weighted<br>average number<br><br><br>of<br>shares (millions) | 4,025 | 4,025 | ||||||||||
| Three months ended 30 June 2021 | ||||||||||||
| --- | ||||||||||||
| Total<br><br><br>results<br><br><br>£m | Profit<br>from<br><br><br>discon-<br><br><br>tinued<br><br><br>operations<br><br><br>£m | Intangible<br><br><br>amort-<br><br><br>isation<br><br><br>£m | Intangible<br><br><br>impair-<br><br><br>ment<br><br><br>£m | Major<br><br><br>restruct-<br><br><br>uring<br><br><br>£m | Trans-<br><br><br>action-<br><br><br>related<br><br><br>£m | Divest-<br><br><br>ments,<br><br><br>significant<br><br><br>legal<br>and<br><br><br>other<br><br><br>items<br><br><br>£m | Adjusted<br><br><br>results<br><br><br>£m | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Turnover | 5,838 | 5,838 | ||||||||||
| Cost of<br>sales | (1,708) | 161 | 18 | 7 | (1,522) | |||||||
| Gross<br>profit | 4,130 | 161 | 18 | 7 | 4,316 | |||||||
| Selling,<br>general and<br><br><br>administration | (1,689) | 55 | (12) | (1,646) | ||||||||
| Research<br>and development | (1,167) | 25 | 7 | 29 | (1,106) | |||||||
| Royalty<br>income | 77 | 77 | ||||||||||
| Other<br>operating<br><br><br>income/(expense) | (76) | 123 | (47) | - | ||||||||
| Operating profit | 1,275 | 186 | 7 | 102 | 130 | (59) | 1,641 | |||||
| Net<br>finance cost | (185) | (185) | ||||||||||
| Loss on<br>disposal of interest<br><br><br>in<br>associates | (36) | 36 | - | |||||||||
| Share<br>of after tax losses<br><br><br>of<br>associates and joint<br><br><br>ventures | 16 | 16 | ||||||||||
| Profit before taxation | 1,070 | 186 | 7 | 102 | 130 | (23) | 1,472 | |||||
| Taxation | 201 | (37) | (2) | (22) | (34) | (350) | (244) | |||||
| Tax rate % | (18.8)% | 16.6% | ||||||||||
| Profit after taxation from<br><br><br>continuing operations | 1,271 | 149 | 5 | 80 | 96 | (373) | 1,228 | |||||
| Profit after taxation from<br><br><br>discontinued operations | 267 | (267) | - | |||||||||
| Total profit after taxation<br><br><br>for the period | 1,538 | (267) | 149 | 5 | 80 | 96 | (373) | 1,228 | ||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>continuing<br>operations | 57 | 42 | 99 | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>continuing<br>operations | 1,214 | 149 | 5 | 80 | 54 | (373) | 1,129 | |||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>discontinued<br>operations | 86 | (86) | ||||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>discontinued<br>operations | 181 | (181) | ||||||||||
| 1,538 | (267) | 149 | 5 | 80 | 96 | (373) | 1,228 | |||||
| Total profit attributable to<br><br><br>non-controlling interests | 143 | (86) | 42 | 99 | ||||||||
| Total profit attributable to<br><br><br>shareholders | 1,395 | (181) | 149 | 5 | 80 | 54 | (373) | 1,129 | ||||
| 1,538 | (267) | 149 | 5 | 80 | 96 | (373) | 1,228 | |||||
| Earnings<br>per share from<br><br><br>continuing<br>operations | 30.3p | 3.7 | 0.1 | 2.0 | 1.4 | (9.3) | 28.2p | |||||
| Earnings<br>per share from<br><br><br>discontinued<br>operations | 4.5p | (4.5)p | ||||||||||
| Total earnings per share | 34.8p | (4.5)p | 3.7 | 0.1 | 2.0 | 1.4 | (9.3) | 28.2p | ||||
| Weighted<br>average number<br><br><br>of<br>shares (millions) | 4,003 | 4,003 | ||||||||||
| Major restructuring and integration | ||||||||||||
| --- | ||||||||||||
| Total<br>Major restructuring charges from continuing operations incurred in<br>Q2 2022 were £134 million (Q2 2021: £102 million),<br>analysed as follows: | ||||||||||||
| --- | ||||||||||||
| Q2 2022 | Q2<br>2021 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Cash<br><br><br>£m | Non-<br><br><br>cash<br><br><br>£m | Total<br><br><br>£m | Cash<br><br><br>£m | Non-<br><br><br>cash<br><br><br>£m | Total<br><br><br>£m | |||||||
| Separation<br>Preparation restructuring<br><br><br>programme | 28 | 105 | 133 | 102 | (10) | 92 | ||||||
| Legacy<br>programmes | (1) | 2 | 1 | 8 | 2 | 10 | ||||||
| 27 | 107 | 134 | 110 | (8) | 102 | |||||||
| Cash<br>charges of £28 million under the Separation Preparation<br>programme primarily arose from the restructuring of some<br>administrative functions as well as global Supply Chain and R&D<br>functions. The non-cash charges of £105 million primarily<br>reflected the write-down of assets in administrative locations and<br>impairment of IT assets.<br><br><br><br><br><br>Total<br>cash payments made in Q2 2022 were £78 million (Q2 2021:<br>£146 million), £70 million (Q2 2021: £113<br>million) relating to the Separation Preparation restructuring<br>programme and £8 million (Q2 2021: £33 million) relating<br>to other legacy programmes including the settlement of certain<br>charges accrued in previous quarters. | ||||||||||||
| --- | ||||||||||||
| The<br>analysis of Major restructuring charges by Income statement line<br>was as follows: | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| Cost of<br>sales | 21 | 18 | ||||||||||
| Selling,<br>general and administration | 106 | 55 | ||||||||||
| Research<br>and development | 7 | 29 | ||||||||||
| Total<br>major restructuring costs from continuing operations | 134 | 102 | ||||||||||
| Materially<br>all of the Separation Preparation restructuring programme has been<br>included as part of continuing operations. The legacy Consumer<br>Healthcare Joint Venture integration programme is now included as<br>part of discontinued operations. | ||||||||||||
| --- | ||||||||||||
| Transaction-related adjustments<br><br><br>Transaction-related<br>adjustments resulted in a net charge of £685 million (Q2 2021:<br>£130 million). This included a net £699 million<br>accounting charge for the re-measurement of contingent<br>consideration liabilities and the liabilities for the Pfizer put<br>option and Pfizer and Shionogi preferential dividends in ViiV<br>Healthcare. | ||||||||||||
| --- | ||||||||||||
| Charge/(credit) | Q2 2022<br><br><br>£m | Q2<br>2021<br><br><br>£m | ||||||||||
| --- | --- | --- | ||||||||||
| Contingent<br>consideration on former Shionogi-ViiV Healthcare joint<br>Venture<br><br><br>(including<br>Shionogi preferential dividends) | 585 | 125 | ||||||||||
| ViiV<br>Healthcare put options and Pfizer preferential<br>dividends | 118 | (37) | ||||||||||
| Contingent<br>consideration on former Novartis Vaccines business | (4) | 13 | ||||||||||
| Other<br>adjustments | (14) | 29 | ||||||||||
| Total<br>transaction-related charges | 685 | 130 | ||||||||||
| The £585 million charge relating to the contingent<br>consideration for the former Shionogi-ViiV Healthcare joint venture<br>represented an increase in the valuation of the contingent<br>consideration due to Shionogi, as a result of the unwind of the<br>discount for £95 million and a charge of £490 million<br>primarily from exchange rates as well as adjustments to sales<br>forecasts. The £118 million charge relating to the ViiV<br>Healthcare put option and Pfizer preferential dividends represented<br>an increase in the valuation of the put option primarily as a<br>result of updated exchange rates and adjustments to sales<br>forecasts.<br><br><br><br><br><br>The<br>ViiV Healthcare contingent consideration liability is fair valued<br>under IFRS. An explanation of the accounting for the<br>non-controlling interests in ViiV Healthcare is set out on page<br>38.<br><br><br><br><br><br>Divestments, significant legal charges, and other<br>items<br><br><br>Divestments,<br>significant legal charges and other items primarily include<br>milestone income gains and certain other Adjusting<br>items.<br><br><br><br><br><br>Discontinued operations<br><br><br>GSK satisfied the criteria in IFRS 5 for treating Consumer<br>Healthcare as a ‘discontinued operation’ effective from<br>30 June 2022, as it was expected that the carrying amount of the<br>disposal group will be recovered principally through disposal and a<br>distribution, it was available for distribution in its present<br>condition (subject only to the steps to be completed that are usual<br>and customary for the demerger of a business) and it was considered<br>highly probable (the date of the demerger being 18 July<br>2022).<br><br><br><br><br><br>From Q2 2020, the Group started to report additional costs to<br>prepare for establishment of the Consumer Healthcare business as an<br>independent entity (“Separation costs”) and these have<br>been presented as part of discontinued operations. Total separation<br>costs incurred in Q2 2022 were £163 million (Q2 2021: £74<br>million). This includes £30 million relating to transaction<br>costs incurred in connection with the demerger and preparatory<br>admission costs related to the listing of Haleon. | ||||||||||||
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| Financial performance<br>– H1 2022 | ||||||||||||
| --- | ||||||||||||
| Total results | ||||||||||||
| --- | ||||||||||||
| The<br>Total results for the Group are set out below. | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Turnover | 14,119 | 10,993 | 28 | 25 | ||||||||
| Cost of<br>sales | (4,893) | (3,362) | 46 | 45 | ||||||||
| Gross<br>profit | 9,226 | 7,631 | 21 | 17 | ||||||||
| Selling,<br>general and administration | (3,878) | (3,198) | 21 | 19 | ||||||||
| Research<br>and development | (2,345) | (2,227) | 5 | 3 | ||||||||
| Royalty income | 297 | 166 | 79 | 77 | ||||||||
| Other<br>operating income/(expense) | 74 | 113 | ||||||||||
| Operating<br>profit | 3,374 | 2,485 | 36 | 26 | ||||||||
| Finance<br>income | 28 | 10 | ||||||||||
| Finance<br>expense | (409) | (387) | ||||||||||
| Loss on<br>disposal of interest in associates | - | (36) | ||||||||||
| Share<br>of after tax profits of associates and joint ventures | (3) | 32 | ||||||||||
| Profit before taxation | 2,990 | 2,104 | 42 | 32 | ||||||||
| Taxation | (473) | 46 | ||||||||||
| Tax rate % | 15.8% | (2.2)% | ||||||||||
| Profit after taxation from continuing operations | 2,517 | 2,150 | 17 | 8 | ||||||||
| Profit<br>after taxation from discontinued operations | 625 | 648 | (4) | (8) | ||||||||
| Total Profit after taxation for the period | 3,142 | 2,798 | 12 | 5 | ||||||||
| Profit<br>attributable to non-controlling interests<br><br><br>from<br>continuing operations | 315 | 137 | ||||||||||
| Profit<br>attributable to shareholders from<br><br><br>continuing<br>operations | 2,202 | 2,013 | ||||||||||
| Profit<br>attributable to non-controlling interests<br><br><br>from<br>discontinued operations | 187 | 193 | ||||||||||
| Profit<br>attributable to shareholders from<br><br><br>discontinued<br>operations | 438 | 455 | ||||||||||
| 3,142 | 2,798 | 12 | 5 | |||||||||
| Total<br>Profit attributable to non-controlling interests | 502 | 330 | ||||||||||
| Total<br>Profit attributable to shareholders | 2,640 | 2,468 | ||||||||||
| 3,142 | 2,798 | |||||||||||
| Earnings<br>per share from continuing operations1 | 54.8p | 50.3p | 9 | - | ||||||||
| Earnings<br>per share from discontinued operations1 | 10.9p | 11.4p | (4) | (8) | ||||||||
| Total earnings per share | 65.7p | 61.7p | 6 | (1) | ||||||||
| (1) | Earnings<br>per share have been retrospectively adjusted to reflect the Share<br>Consolidation on 18 July 2022. | |||||||||||
| --- | --- | |||||||||||
| Adjusted results | ||||||||||||
| --- | ||||||||||||
| The<br>Adjusted results for the Group are set out below. Adjusted results<br>are from continuing operations and excludes the Consumer Healthcare<br>business (see details in page 52). Reconciliations between Total<br>results and Adjusted results for H1 2022 and H1 2021 are set out on<br>pages 29 to 30. | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>£m | %<br>of<br><br><br>turnover | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Turnover | 14,119 | 100 | 28 | 25 | ||||||||
| Cost of<br>sales | (4,497) | (31.9) | 52 | 52 | ||||||||
| Selling,<br>general and administration | (3,725) | (26.4) | 20 | 18 | ||||||||
| Research<br>and development | (2,243) | (15.9) | 5 | 3 | ||||||||
| Royalty<br>income | 297 | 2.2 | 79 | 77 | ||||||||
| Adjusted<br>operating profit | 3,951 | 28.0 | 33 | 26 | ||||||||
| Adjusted<br>profit before tax | 3,569 | 36 | 28 | |||||||||
| Adjusted<br>profit after tax | 3,005 | 38 | 29 | |||||||||
| Adjusted<br>profit attributable to shareholders | 2,694 | 37 | 28 | |||||||||
| Adjusted<br>earnings per share | 67.0p | 36 | 27 | |||||||||
| Operating profit by segment | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>£m | %<br>of<br><br><br>turnover | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Commercial<br>Operations | 6,421 | 45.5 | 21 | 16 | ||||||||
| Research<br>and Development | (2,247) | 5 | 2 | |||||||||
| Segment<br>profit | 4,174 | 29.6 | 32 | 26 | ||||||||
| Corporate<br>& other unallocated costs | (223) | |||||||||||
| Adjusted<br>operating profit | 3,951 | 28.0 | 33 | 26 | ||||||||
| Turnover | ||||||||||||
| --- | ||||||||||||
| Commercial<br>Operations | ||||||||||||
| --- | ||||||||||||
| H1 2022 | ||||||||||||
| --- | --- | --- | --- | |||||||||
| £m | Growth<br><br><br>£% | Growth<br><br><br>CER% | ||||||||||
| HIV | 2,585 | 14 | 10 | |||||||||
| Oncology | 281 | 23 | 19 | |||||||||
| Immuno-inflammation,<br>respiratory and other | 1,200 | 26 | 21 | |||||||||
| 4,066 | 18 | 14 | ||||||||||
| Pandemic | 1,773 | >100 | >100 | |||||||||
| Specialty Medicines | 5,839 | 69 | 63 | |||||||||
| Meningitis | 447 | 8 | 6 | |||||||||
| Influenza | 50 | (2) | (6) | |||||||||
| Shingles | 1,429 | >100 | >100 | |||||||||
| Established<br>Vaccines | 1,458 | 1 | (1) | |||||||||
| 3,384 | 33 | 30 | ||||||||||
| Pandemic<br>Vaccines | - | (100) | (100) | |||||||||
| Vaccines | 3,384 | 21 | 17 | |||||||||
| Respiratory | 3,184 | 6 | 3 | |||||||||
| Other<br>General Medicines | 1,712 | (1) | - | |||||||||
| General Medicines | 4,896 | 3 | 2 | |||||||||
| Commercial Operations | 14,119 | 28 | 25 | |||||||||
| US | 6,903 | 38 | 29 | |||||||||
| Europe | 3,209 | 27 | 30 | |||||||||
| International | 4,007 | 16 | 16 | |||||||||
| Commercial Operations by region | 14,119 | 28 | 25 | |||||||||
| Total<br>turnover in the half year was £14,119 million, up 28% at AER,<br>25% at CER, reflecting strong performance in all three product<br>groups. Commercial Operations turnover, excluding pandemic sales,<br>grew 15% at AER, 12% at CER. Specialty Medicines included<br>£1,773 million sales of Xevudy, which contributed 13 percentage<br>points of growth at AER and CER. Vaccines growth reflected strong<br>Shingrix performance<br>assisted by demand recovery and channel inventory build in the US,<br>partially offset by pandemic adjuvant<br>sales in H1 2021. General Medicines reflected the<br>post-pandemic recovery of the antibiotics market and the strong<br>performance of Trelegy in<br>respiratory across all regions.<br><br><br><br><br><br>Specialty Medicines<br><br><br><br><br><br>Specialty<br>Medicines sales were £5,839 million, up 69% at AER, 63% at<br>CER, driven by consistent growth in all therapy areas. Specialty<br>Medicines excluding sales of Xevudy, were £4,066 million, up<br>18% at AER, 14% at CER.<br><br><br><br><br><br>HIV<br><br><br>HIV<br>sales were £2,585 million with growth of 14% at AER,10% at<br>CER. The performance benefited from strong patient demand for the<br>new HIV medicines (Dovato,<br>Cabenuva, Juluca, Rukobia, and Apretude). Unfavourable international<br>tender phasing was broadly offset by favourable US channel<br>inventory movements.<br><br><br><br><br><br>New HIV<br>medicines delivered for the first-time half year sales of over one<br>billion pounds to £1,017 million, up 72% at AER, 66% at CER,<br>representing 39% of the total HIV portfolio compared to 26% in H1<br>2021. Sales of the oral two drug regimens Dovato and Juluca were £577 million and<br>£285 million, respectively, with combined growth of 51% at<br>AER, 47% at CER. Cabenuva,<br>the first long-acting injectable for the treatment of HIV-1<br>infection, recorded sales of £110 million. Apretude, the first long-acting<br>injectable for the<br>prevention of HIV-1 delivered sales of £10<br>million.<br><br><br><br><br><br>Oncology<br><br><br>Oncology<br>sales were £281 million, up 23% at AER, 19% at CER.<br>Zejula sales of £218<br>million were up 17% at AER, 14% at CER with diagnosis and treatment<br>rates continuing to be impacted by the pandemic especially in the<br>US. Sales of Blenrep of<br>£55 million increased 31% at AER, 26% at CER, reflecting<br>ongoing launches and growth in launched markets.<br><br><br><br><br><br>Immuno-inflammation,<br>Respiratory and Other<br><br><br>Immuno-inflammation,<br>Respiratory and Other sales were £1,200 million up 26% at AER,<br>21% at CER. Benlysta sales<br>were £512 million, up 31% at AER, 24% at CER, representing<br>strong underlying demand worldwide. Nucala sales were £662 million, up<br>21% at AER, 18% at CER, including US sales of £413 million up<br>24% at AER, 16% at CER. The performance reflected continued strong<br>patient demand and the launch of several additional<br>indications.<br><br><br><br><br><br>Pandemic<br><br><br>Sales<br>of Xevudy were £1,773<br>million, compared to £16 million sales in the first half of<br>last year. Sales were delivered in all regions; £793 million<br>in the US, £434 million in Europe, and £546 million in<br>International.<br><br><br><br><br><br>Vaccines<br><br><br><br><br><br>Vaccines<br>turnover was £3,384 million, up 21% at AER, 17% at CER.<br>Excluding unrepeated 2021 pandemic adjuvant sales, vaccine sales<br>increased 33% at AER, 30% at CER. The performance reflected a<br>favourable comparator to H1 2021, which was impacted by<br>COVID-19 related disruptions in<br>several markets, and the strong commercial execution of<br>Shingrix, particularly in<br>the US and Europe.<br><br><br><br><br><br>Meningitis<br><br><br>Meningitis<br>vaccines sales grew 8% at AER, 6% at CER to £447 million<br>mainly driven by Bexsero<br>(10% at AER, 9% at CER to £328 million) resulting from higher<br>CDC purchasing and increased share in the US, partially offset by<br>phasing of tenders in Europe.<br><br><br><br><br><br>Shingles<br><br><br>Shingrix sales more than doubled to £1,429 million<br>primarily due to demand recovery, strong commercial execution aimed<br>at shifting the shingles vaccination season forward and<br>earlier-than-expected channel inventory build in the US, and higher<br>demand in Germany. All regions grew significantly in H1 2022, with<br>41% of the growth contributed from outside of the US. Shingrix is now available in 23<br>countries.<br><br><br><br><br><br>Established Vaccines<br><br><br>Established<br>Vaccines grew 1% AER but decreased 1% at CER to £1,458 million<br>mainly as a result of lower International tender demand and<br>unfavourable phasing for Synflorix, lower sales for Cervarix, and MMR/V vaccines in<br>International, and the negative impact of a CDC stockpile borrow<br>for Rotarix. This decrease<br>was partially offset by higher demand for hepatitis vaccines and<br>Boostrix in the US and<br>Europe.<br><br><br><br><br><br>General Medicines<br><br><br><br><br><br>General<br>Medicines sales in the half year were £4,896 million, up 3% at<br>AER, 2% at CER, with the impact of generic competition in US,<br>Europe and Japan offset by Trelegy growth in respiratory and the<br>post-pandemic rebound of the antibiotic market since H2 2021, in<br>Other General Medicines.<br><br><br><br><br><br>Respiratory<br><br><br>Respiratory<br>sales were £3,184 million, up 6% at AER, 3% at CER. The<br>performance was driven by Trelegy sales of £807 million, up<br>50% AER, 43% CER, including strong growth across all regions. The<br>performance also benefitted from prior period RAR adjustments in<br>the US. Advair/Seretide<br>sales of £564 million decreased 19% at AER, 20% at CER<br>predominately reflecting the adverse impact of generic competition;<br>growth in certain International markets due to targeted promotion<br>offset the decrease.<br><br><br><br><br><br>Other General<br>Medicines<br><br><br>Other<br>General Medicines sales were £1,712 million, and decreased 1%<br>at AER, stable at CER. Augmentin sales were £259 million,<br>up 42% at AER, 48% at CER, reflecting the post pandemic rebound of<br>the antibiotic market since Q3 2021 in the International and Europe<br>regions. This offsets the ongoing adverse impact of generic<br>competition and approximately two percentage points impact from the<br>divestment of cephalosporin products in Q4 2021.<br><br><br><br><br><br>By<br>Region<br><br><br><br><br><br>US<br><br><br>In the<br>US, sales were £6,903 million, up 38% at AER, 29% at CER,<br>including Xevudy sales of<br>£793 million contributing ten percentage points of<br>growth.<br><br><br><br><br><br>In<br>Specialty Medicines, HIV sales were £1,591 million up 21% at<br>AER, 13% at CER driven by strong patient demand from all new HIV<br>products with sales of £662 million up 73% at AER, 62% at CER,<br>and favourable channel inventory movements. HIV medicines,<br>Dovato delivered sales of<br>£309 million and Cabenuva £95 million. Nucala in respiratory and Benlysta in immunology both continued<br>to grow double-digit and reflected ongoing and strong patient<br>demand. Oncology sales increased 14% at AER, 7% at CER with<br>diagnosis and treatment rates continuing to be impacted by the<br>pandemic.<br><br><br><br><br><br>Vaccine<br>sales were £1,789 million, up 38% at AER, 29% at CER.<br>Excluding the impact of COVID-19 vaccine adjuvant sales during the<br>first half of 2021, sales increased 64% at AER, 53% at CER. The<br>performance was primarily driven by Shingrix and reflected demand recovery<br>and the benefit of a favourable comparator in the first half of<br>2021 when sales were impacted by COVID-19 related disruptions.<br>Meningitis, Hepatitis, Infanrix/Pediarix, and Boostrix sales all grew reflecting CDC<br>purchasing patterns and demand recovery.<br><br><br><br><br><br>General<br>Medicines sales were £1,744 million up 9% at AER, 2% at CER,<br>driven by strong respiratory sales of Trelegy, which increased 57% at AER,<br>47% at CER, and reflected increased patient demand and growth of<br>the single inhaler triple therapy market.<br><br><br><br><br><br>Europe<br><br><br>In<br>Europe, sales were £3,209 million, up 27% at AER, 30% at CER,<br>including Xevudy sales of<br>£434 million contributing 17 percentage points of<br>growth.<br><br><br><br><br><br>In<br>Specialty Medicines, HIV sales were £635 million up 10% at<br>AER, 13% at CER primarily driven by strong patient demand from two<br>drug regimens Dovato and Juluca.<br>Dovato delivered sales of £216 million and Juluca £63 million. Benlysta in immunology, Nucala in respiratory, and several<br>Oncology medicines continued to show strong double-digit<br>growth.<br><br><br><br><br><br>Vaccine<br>sales were £823 million, up 36% at AER, 40% at CER. The<br>performance was driven by Shingrix sales of £311 million,<br>>100% at AER, >100% at CER, particularly in<br>Germany.<br><br><br><br><br><br>General<br>Medicines sales were £1,025 million and decreased 5% at AER,<br>3% at CER, reflecting the ongoing and adverse impact of generic<br>competitive pressures on Seretide. This was partly offset,<br>however, by strong demand for Trelegy in respiratory and the growth<br>of Augmentin following the<br>post-pandemic rebound of the antibiotic market since H2<br>2021.<br><br><br><br><br><br>International<br><br><br>International<br>sales were £4,007 million, up 16% at AER, 17% at CER,<br>including Xevudy sales of<br>£546 million contributing 14 percentage points of<br>growth.<br><br><br><br><br><br>In<br>Specialty Medicines, HIV sales were £359 million and decreased<br>4% at AER, 5% at CER, primarily driven by tender phasing; strong<br>Dovato growth partially<br>offset the performance. Combined Tivicay and Triumeq sales were £278 million<br>decreasing 14% at AER, 15% at CER. Nucala in respiratory and Benlysta in immunology both continued<br>to grow strongly reflecting biologic market growth in Japan and<br>addition to China’s National Reimbursement Drug<br>List.<br><br><br><br><br><br>Vaccine<br>sales were £772 million and decreased 13% at AER, 14% at CER.<br>Vaccine sales excluding the impact of COVID-19 vaccine adjuvant<br>sales in H1 2021 decreased 8% at AER, 9% at CER, primarily<br>reflecting the phasing of public tenders and the lower sales of<br>divested brands.<br><br><br><br><br><br>General<br>Medicines sales were £2,127 million up 4% at AER, 5% at CER.<br>Respiratory sales of £935 million increased 4% at AER, 5% at<br>CER reflecting strong growth of Trelegy, particularly in Japan, China,<br>and Canada. This performance, however, was offset by the adverse<br>impact of generic competition and a lower allergy season in Japan.<br>Other General Medicines sales of £1,192 million increased 4%<br>at AER, 5% at CER, and reflected growth of Augmentin following the post-pandemic<br>rebound of the antibiotic market since H2 2021. | ||||||||||||
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| Operating performance | ||||||||||||
| --- | ||||||||||||
| Cost of sales<br><br><br>Total<br>cost of sales as a percentage of turnover was 34.7%, 4.1 percentage<br>points higher at AER and 4.9 percentage points higher in CER terms<br>than H1 2021. This included lower write-downs on sites from major<br>restructuring programmes compared to 2021.<br><br><br><br><br><br>Excluding<br>these and other Adjusting items, Adjusted cost of sales as a<br>percentage of turnover was 31.9%, 5.0 percentage points higher at<br>AER and 5.7 percentage points higher at CER compared with H1 2021.<br>This primarily reflected higher sales of lower margin Xevudy compared to H1 2021 which<br>included higher margin pandemic adjuvant sales, increasing cost of<br>sales margin by 7.7 percentage points at AER and 7.6 percentage<br>points at CER, as well as the impact of increased commodity prices<br>and freight costs. This was partially offset by a favourable mix<br>primarily from increased sales of Shingrix in the US and Europe and<br>increased sales of HIV medicines in the US.<br><br><br><br><br><br>Selling, general and administration<br><br><br>Total<br>SG&A costs as a percentage of turnover were 27.5%, 1.6<br>percentage points lower at AER and 1.4 percentage points lower at<br>CER than in H1 2021 as the growth in sales outweighed SG&A<br>expenditure growth.<br><br><br><br><br><br>Adjusted<br>SG&A costs as a percentage of turnover were 26.4%, 1.9<br>percentage points lower at AER than in H1 2021 and 1.6 percentage<br>points lower at CER. Adjusted SG&A costs increased 20% at AER,<br>18% at CER which primarily reflected an increased level of launch<br>investment in Specialty Medicines particularly HIV and Vaccines<br>including Shingrix to drive<br>post-pandemic recovery demand and support market expansion. The<br>growth in Adjusted SG&A also reflected an unfavourable<br>comparison to a beneficial legal settlement in 2021, exchange<br>losses on the Vir Biotechnology, Inc. collaboration profit share<br>and impairment provisions relating to Ukraine. This growth, however<br>was partly offset by the continuing benefit of restructuring and<br>tight control of ongoing costs.<br><br><br><br><br><br>Research and development<br><br><br>Group<br>R&D expenditure was £2,345 million (16.6% of turnover), up<br>5% at AER and 3% at CER. Adjusted R&D expenditure in the<br>year-to-date was £2,243 million, up 5% at AER, 3% at CER. This<br>reflected continued efficiencies driven by the One R&D<br>restructuring programme, the completion of several late-stage<br>clinical development programmes, and a favourable comparator to H1<br>2021, which saw increased levels of R&D investment due to<br>COVID-19 pandemic solutions.<br><br><br><br><br><br>In the<br>half year, GSK increased investment across Vaccine clinical<br>development, including investments into its emerging mRNA<br>technology platform, continued investment in the late-stage<br>portfolio and accelerated several early discovery programmes. In<br>addition, in Specialty Medicines, the level of R&D investment<br>increased to support the early-stage HIV portfolio and in<br>respiratory, the phase III programme for depemokimab, a potential<br>new medicine to treat severe asthma. The expenditure in the year to<br>date does not reflect the impact of the acquisition of Sierra<br>Oncology, Inc. which completed on 1 July 2022.<br><br><br><br><br><br>Royalty income<br><br><br>Royalty<br>income was £297 million (H1 2021: £166 million), up 79%<br>at AER, 77% at CER, primarily reflecting royalty income from Gilead<br>under the settlement and licensing agreement with Gilead announced<br>on 1 February 2022 and higher sales of Gardasil. | ||||||||||||
| --- | ||||||||||||
| Other operating income/(expense)<br><br><br>Net<br>other operating income was £74 million (H1 2021: £113<br>million) including £0.9 billion upfront income received from<br>the settlement with Gilead, partly offset by accounting charges of<br>£1,031 million (H1 2021: £208 million) arising from the<br>re-measurement of contingent consideration liabilities and the<br>liabilities for the Pfizer put option and Pfizer and Shionogi<br>preferential dividends in ViiV Healthcare. This included a<br>re-measurement charge of £841 million (H1 2021: £259<br>million) for the contingent consideration liability due to<br>Shionogi, including the unwinding of the discount for £196<br>million and a charge for £645 million primarily from changes<br>to exchange rates as well as adjustments to sales<br>forecasts. | ||||||||||||
| --- | ||||||||||||
| Operating profit<br><br><br>Total<br>operating profit was £3,374 million compared with £2,485<br>million in H1 2021. This included the £0.9 billion upfront<br>income received from the settlement with Gilead and increased<br>profits on turnover growth of 25% at CER, partly offset by higher<br>re-measurement charges for contingent consideration liabilities.<br>Adjusted operating profit was £3,951 million, 33% higher at<br>AER and 26% at CER than H1 2021 on a turnover increase of 25% at<br>CER. The Adjusted operating margin of 28.0% was 1.0 percentage<br>points higher at AER and stable at CER compared to H1 2021. This<br>primarily reflected the impact from low margin COVID-19 solutions<br>sales (Xevudy), which reduced Adjusted Operating profit growth by<br>approximately 2% at AER, 1% at CER and reduced the Adjusted<br>operating margin by approximately 3.3 percentage points at AER and<br>CER. This was offset by operating leverage from strong sales<br>growth, mix benefit and higher royalty income.<br><br><br><br><br><br>Contingent<br>consideration cash payments made to Shionogi and other companies<br>reduce the balance sheet liability and hence are not recorded in<br>the income statement. Total contingent consideration cash payments<br>in H1 2022 amounted to £615 million (H1 2021: £426<br>million). These included cash payments made to Shionogi of<br>£603 million (H1 2021: £419 million).<br><br><br><br><br><br>Adjusted operating profit by business<br><br><br>Commercial<br>Operations operating profit was £6,421 million, up 21% at AER<br>and 16% at CER on a turnover increase of 25% at CER. The operating<br>margin of 45.5% was 2.8 percentage points lower at AER, 3.5<br>percentage points lower at CER than in H1 2021. This primarily<br>reflected strong sales of lower margin Xevudy in the period, increased<br>investment behind launches in Specialty Medicines including HIV and<br>Vaccines plus higher commodity, freight and distribution costs as<br>well as an adverse comparison to a favourable legal settlement in<br>H1 2021. This was partly offset by continued tight control of<br>ongoing costs, benefits from continued restructuring and increased<br>royalty income from Biktarvy sales following the settlement with<br>Gilead in February 2022 and Gardasil sales.<br><br><br><br><br><br>R&D<br>segment operating expenses were £2,247 million, up 5% at AER,<br>2% at CER, primarily reflecting increased investment in Vaccines<br>including priority investments for mRNA and late stage portfolio<br>and Specialty in early stage HIV and depemokimab. This was partly<br>offset by continued efficiencies driven by the R&D<br>restructuring programme, the completion of several late-stage<br>clinical development programmes, and a favourable comparator to H1<br>2021, which saw increased levels of R&D investment due to<br>COVID-19 pandemic solutions.<br><br><br><br><br><br>Net finance costs<br><br><br>Total<br>net finance costs were £381 million compared with £377<br>million in H1 2021. Adjusted net finance costs were £379<br>million compared with £375 million in H1 2021.<br><br><br><br><br><br>Share of after tax profits of associates and joint<br>ventures<br><br><br>The<br>share of after tax loss of associates and joint ventures was<br>£3 million (H1 2021: £32 million share of profit). In H1<br>2021, the Group also reported a net loss on disposal of interests<br>in associates of £36 million, primarily driven by a loss on<br>disposal of our interest in the associate Innoviva<br>Inc.<br><br><br><br><br><br>Taxation<br><br><br>The<br>charge of £473 million represented an effective tax rate on<br>Total results of 15.8% (H1 2021: 2.2% credit) and reflected the<br>different tax effects of the various Adjusting items. Included in<br>H1 2021 is a credit of £325 million resulting from the<br>revaluation of deferred tax assets following enactment of the<br>proposed change of UK corporation tax rates from 19% to 25%. Tax on<br>Adjusted profit amounted to £564 million and represented an<br>effective Adjusted tax rate of 15.8% (H1 2021: 16.7%).<br><br><br><br><br><br>Issues<br>related to taxation are described in Note 14,<br>‘Taxation’ in the Annual Report 2021. The Group<br>continues to believe it has made adequate provision for the<br>liabilities likely to arise from periods that are open and not yet<br>agreed by relevant tax authorities. The ultimate liability for such<br>matters may vary from the amounts provided and is dependent upon<br>the outcome of agreements with relevant tax<br>authorities.<br><br><br><br><br><br>Non-controlling interests<br><br><br>The<br>allocation of Total earnings to non-controlling interests amounted<br>to £315 million (H1 2021: £137 million). The increase was<br>primarily due to an increased allocation of ViiV Healthcare profits<br>of £268 million (H1 2021: £136 million), including the<br>Gilead upfront settlement income partly offset by increased credits<br>for re-measurement of contingent consideration liabilities, as well<br>as higher net profits in some of the Group’s other entities<br>with non-controlling interests.<br><br><br><br><br><br>The<br>allocation of Adjusted earnings to non-controlling interests<br>amounted to £311 million (Q2 2021: £211 million). The<br>increase in allocation primarily reflected an increased allocation<br>of ViiV Healthcare profits of £264 million (H1 2021: £210<br>million), as well as higher net profits in some of the<br>Group’s other entities with non-controlling<br>interests.<br><br><br><br><br><br>Earnings per share from continuing operations<br><br><br>Total<br>EPS from continuing operations was 54.8p compared with 50.3p in H1<br>2021. This primarily reflected the £0.9 billion upfront income<br>received from the settlement with Gilead and increased profits on<br>turnover growth of 25% at CER, partly offset by higher<br>re-measurement charges for contingent consideration liabilities as<br>well as an unfavourable comparison due to a credit of £325<br>million to Taxation in Q2 2021 resulting from the revaluation of<br>deferred tax assets.<br><br><br><br><br><br>Adjusted<br>EPS was 67.0p compared with 49.3p in H1 2021, up 36% at AER, 27% at<br>CER, on a 25% CER turnover increase. Adjusted operating profit<br>reflected higher COVID-19 solutions sales at low margin with the<br>reduction to growth from COVID-19 solutions being approximately 2%<br>at AER, 2% at CER. Operating leverage from growth in sales of<br>Specialty Medicines including HIV and Vaccines, beneficial mix,<br>higher royalty income and a lower effective tax rate was partly<br>offset by higher supply chain, freight and distribution costs and<br>higher non-controlling interests.<br><br><br><br><br><br>Profit and earnings per share from discontinued<br>operations<br><br><br>Discontinued<br>operations include the Consumer Healthcare business and certain<br>Corporate costs directly attributable to Consumer Healthcare.<br>Profit after taxation from discontinued operations amounted to<br>£625 million (H1 2021: £648 million) and EPS from<br>discontinued operations was 10.9p, compared with 11.4p in H1 2021.<br>The reduction in profit and EPS primarily reflected increased<br>separation costs and increased interest costs. For further details<br>see page 52, discontinued operations.<br><br><br><br><br><br>Currency impact on H1 2022 results<br><br><br>The<br>results for H1 2022 are based on average exchange rates,<br>principally £1/$1.30, £1/€1.19 and £1/Yen 159.<br>Comparative exchange rates are given on page 50. The period-end<br>exchange rates were £1/$1.21, £1/€1.16 and<br>£1/Yen 165.<br><br><br><br><br><br>In H1<br>2022, turnover was up 28% at AER and 25% at CER. Total EPS was<br>54.8p compared with 50.3p in H1 2021. Adjusted EPS was 67.0p<br>compared with 49.3p in H1 2021, up 36% at AER and 27% at CER. The<br>favourable currency impact reflected the weakening of Sterling<br>against the US Dollar, partly offset by strengthening in Sterling<br>against the Euro and Japanese Yen. Exchange gains or losses on the<br>settlement of intercompany transactions had a one percent<br>favourable impact on the nine percentage point favourable currency<br>impact on Adjusted EPS. | ||||||||||||
| --- | ||||||||||||
| Adjusting items<br><br><br>The<br>reconciliations between Total results and Adjusted results for H1<br>2022 and H1 2021 are set out below. | ||||||||||||
| --- | ||||||||||||
| Six months ended 30 June 2022 | ||||||||||||
| --- | ||||||||||||
| Total<br><br><br>results<br><br><br>£m | Profit from<br><br><br>discon-<br><br><br>tinued<br><br><br>operations<br><br><br>£m | Intangible<br><br><br>amort-<br><br><br>isation<br><br><br>£m | Intangible<br><br><br>impair-<br><br><br>ment<br><br><br>£m | Major<br><br><br>restruct-<br><br><br>uring<br><br><br>£m | Trans-<br><br><br>action-<br><br><br>related<br><br><br>£m | Divest-<br><br><br>ments,<br><br><br>significant<br><br><br>legal<br>and<br><br><br>other<br><br><br>items<br><br><br>£m | Adjusted<br><br><br>results<br><br><br>£m | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Turnover | 14,119 | 14,119 | ||||||||||
| Cost of<br>sales | (4,893) | 329 | 36 | 22 | 9 | (4,497) | ||||||
| Gross<br>profit | 9,226 | 329 | 36 | 22 | 9 | 9,622 | ||||||
| Selling,<br>general and<br><br><br>administration | (3,878) | 135 | 18 | (3,725) | ||||||||
| Research<br>and development | (2,345) | 49 | 39 | 14 | (2,243) | |||||||
| Royalty<br>income | 297 | 297 | ||||||||||
| Other<br>operating<br><br><br>income/(expense) | 74 | 1,010 | (1,084) | - | ||||||||
| Operating profit | 3,374 | 378 | 39 | 185 | 1,032 | (1,057) | 3,951 | |||||
| Net<br>finance cost | (381) | 1 | 1 | (379) | ||||||||
| Share<br>of after tax losses<br><br><br>of<br>associates and joint<br><br><br>ventures | (3) | (3) | ||||||||||
| Profit before taxation | 2,990 | 378 | 39 | 186 | 1,032 | (1,056) | 3,569 | |||||
| Taxation | (473) | (80) | (7) | (36) | (131) | 163 | (564) | |||||
| Tax rate % | 15.8% | 15.8% | ||||||||||
| Profit after taxation from<br><br><br>continuing operations | 2,517 | 298 | 32 | 150 | 901 | (893) | 3,005 | |||||
| Profit after taxation from<br><br><br>discontinued operations | 625 | (625) | - | |||||||||
| Total profit after taxation<br><br><br>for the period | 3,142 | (625) | 298 | 32 | 150 | 901 | (893) | 3,005 | ||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>continuing<br>operations | 315 | (4) | 311 | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>continuing<br>operations | 2,202 | 298 | 32 | 150 | 905 | (893) | 2,694 | |||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>discontinued<br>operations | 187 | (187) | - | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>discontinued<br>operations | 438 | (438) | - | |||||||||
| 3,142 | (625) | 298 | 32 | 150 | 901 | (893) | 3,005 | |||||
| Total profit attributable to<br><br><br>non-controlling interests | 502 | (187) | (4) | 311 | ||||||||
| Total profit attributable to<br><br><br>shareholders | 2,640 | (438) | 298 | 32 | 150 | 905 | (893) | 2,694 | ||||
| 3,142 | (625) | 298 | 32 | 150 | 901 | (893) | 3,005 | |||||
| Earnings<br>per share from<br><br><br>continuing<br>operations | 54.8p | 7.4p | 0.8p | 3.7p | 22.5p | (22.2)p | 67.0p | |||||
| Earnings<br>per share from<br><br><br>discontinued<br>operations | 10.9p | (10.9)p | - | |||||||||
| Total earnings per share | 65.7p | (10.9)p | 7.4p | 0.8p | 3.7p | 22.5p | (22.2)p | 67.0p | ||||
| Weighted<br>average number<br><br><br>of<br>shares (millions) | 4,021 | 4,021 | ||||||||||
| Six months ended 30 June 2021 | ||||||||||||
| --- | ||||||||||||
| Total<br><br><br>results<br><br><br>£m | Profit<br>from<br><br><br>discon-<br><br><br>tinued<br><br><br>operations<br><br><br>£m | Intangible<br><br><br>amort-<br><br><br>isation<br><br><br>£m | Intangible<br><br><br>impair-<br><br><br>ment<br><br><br>£m | Major<br><br><br>restruct-<br><br><br>uring<br><br><br>£m | Trans-<br><br><br>action-<br><br><br>related<br><br><br>£m | Divest-<br><br><br>ments,<br><br><br>significant<br><br><br>legal<br>and<br><br><br>other<br><br><br>items<br><br><br>£m | Adjusted<br><br><br>results<br><br><br>£m | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Turnover | 10,993 | 10,993 | ||||||||||
| Cost of<br>sales | (3,362) | 326 | 38 | 14 | 27 | (2,957) | ||||||
| Gross<br>profit | 7,631 | 326 | 38 | 14 | 27 | 8,036 | ||||||
| Selling,<br>general and<br><br><br>administration | (3,198) | 100 | (10) | (3,108) | ||||||||
| Research<br>and development | (2,227) | 50 | 19 | 30 | (2,128) | |||||||
| Royalty<br>income | 166 | 166 | ||||||||||
| Other<br>operating<br><br><br>income/(expense) | 113 | 232 | (345) | - | ||||||||
| Operating profit | 2,485 | 376 | 19 | 168 | 246 | (328) | 2,966 | |||||
| Net<br>finance cost | (377) | 1 | (375) | |||||||||
| Loss on<br>disposal of interest<br><br><br>in<br>associates | (36) | 36 | - | |||||||||
| Share<br>of after tax losses<br><br><br>of<br>associates and joint<br><br><br>ventures | 32 | 32 | ||||||||||
| Profit before taxation | 2,104 | 376 | 19 | 169 | 246 | (291) | 2,623 | |||||
| Taxation | 46 | (73) | (4) | (36) | (64) | (308) | (439) | |||||
| Tax rate % | (2.2%) | 16.7% | ||||||||||
| Profit after taxation from<br><br><br>continuing operations | 2,150 | 303 | 15 | 133 | 182 | (599) | 2,184 | |||||
| Profit after taxation from<br><br><br>discontinued operations | 648 | (648) | - | |||||||||
| Total profit after taxation<br><br><br>for the period | 2,798 | (648) | 303 | 15 | 133 | 182 | (599) | 2,184 | ||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>continuing<br>operations | 137 | 74 | 211 | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>continuing<br>operations | 2,013 | 303 | 15 | 133 | 108 | (599) | 1,973 | |||||
| Profit<br>attributable to non-<br><br><br>controlling<br>interest from<br><br><br>discontinued<br>operations | 193 | (193) | - | |||||||||
| Profit<br>attributable to<br><br><br>shareholders<br>from<br><br><br>discontinued<br>operations | 455 | (455) | - | |||||||||
| 2,798 | (648) | 303 | 15 | 133 | 182 | (599) | 2,184 | |||||
| Total profit attributable to<br><br><br>non-controlling interests | 330 | (193) | 74 | 211 | ||||||||
| Total profit attributable to<br><br><br>shareholders | 2,468 | (455) | 303 | 15 | 133 | 108 | (599) | 1,973 | ||||
| 2,798 | (648) | 303 | 15 | 133 | 182 | (599) | 2,184 | |||||
| Earnings<br>per share from<br><br><br>continuing<br>operations | 50.3p | 7.6 | 0.4 | 3.3 | 2.7 | (15.0) | 49.3p | |||||
| Earnings<br>per share from<br><br><br>discontinued<br>operations | 11.4p | (11.4)p | - | |||||||||
| Total earnings per share | 61.7p | (11.4)p | 7.6 | 0.4 | 3.3 | 2.7 | (15.0) | 49.3p | ||||
| Weighted<br>average number<br><br><br>of<br>shares (millions) | 3,999 | 3,999 | ||||||||||
| Major restructuring and integration | ||||||||||||
| --- | ||||||||||||
| Total<br>Major restructuring charges from continuing operations incurred in<br>H1 2022 were £185 million (H1 2021: £168 million),<br>analysed as follows: | ||||||||||||
| --- | ||||||||||||
| H1 2022 | H1<br>2021 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Cash<br><br><br>£m | Non-<br><br><br>cash<br><br><br>£m | Total<br><br><br>£m | Cash<br><br><br>£m | Non-<br><br><br>cash<br><br><br>£m | Total<br><br><br>£m | |||||||
| Separation<br>Preparation restructuring<br><br><br>programme | 39 | 142 | 181 | 180 | (1) | 179 | ||||||
| Legacy<br>programmes | 1 | 3 | 4 | 19 | (30) | (11) | ||||||
| 40 | 145 | 185 | 199 | (31) | 168 | |||||||
| Cash<br>charges of £39 million under the Separation Preparation<br>programme primarily arose from the restructuring of some<br>administrative functions as well as global Supply Chain and R&D<br>functions. The non-cash charges of £142 million primarily<br>reflected the write-down of assets in administrative locations and<br>impairment of IT assets.<br><br><br><br><br><br>Total<br>cash payments made in H1 2022 were £213 million (H1 2021:<br>£290 million), £189 million (H1 2021: £213 million)<br>relating to the Separation Preparation restructuring programme and<br>£24 million (H1 2021: £77 million) relating to other<br>legacy programmes including the settlement of certain charges<br>accrued in previous quarters. | ||||||||||||
| --- | ||||||||||||
| The<br>analysis of Major restructuring charges by Income statement line<br>was as follows: | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| Cost of<br>sales | 36 | 38 | ||||||||||
| Selling,<br>general and administration | 135 | 100 | ||||||||||
| Research<br>and development | 14 | 30 | ||||||||||
| Total<br>Major restructuring costs from continuing operations | 185 | 168 | ||||||||||
| The<br>benefit in H1 2022 from restructuring programmes was £0.2<br>billion, primarily relating to the Separation Preparation<br>restructuring programme.<br><br><br><br><br><br>The<br>Group initiated in Q1 2020 a two-year Separation Preparation<br>programme to prepare for the separation of GSK into two companies.<br>The programme aims to: | ||||||||||||
| --- | ||||||||||||
| ● | Drive a<br>common approach to R&D with improved capital<br>allocation | |||||||||||
| --- | --- | |||||||||||
| ● | Align<br>and improve the capabilities and efficiency of global support<br>functions to support new GSK | |||||||||||
| ● | Further<br>optimise the supply chain and product portfolio, including the<br>divestment of non-core assets | |||||||||||
| ● | Prepare<br>Consumer Healthcare to operate as a standalone company | |||||||||||
| The<br>programme continues to target delivery of £0.8 billion of<br>annual savings by 2022 and £1.0 billion by 2023, with total<br>costs estimated at £2.4 billion, of which £1.6 billion is<br>expected to be cash costs. The proceeds of divestments have largely<br>covered the cash costs of the programme. | ||||||||||||
| --- | ||||||||||||
| Materially<br>all of the Separation Preparation restructuring programme has been<br>included as part of continuing operations. The legacy Consumer<br>Healthcare Joint Venture integration programme is now included as<br>part of discontinued operations. | ||||||||||||
| --- | ||||||||||||
| Transaction-related adjustments<br><br><br>Transaction-related<br>adjustments from continuing operations resulted in a net charge of<br>£1,032 million (H1 2021: £246 million). This included a<br>net £1,031 million accounting charge for the re-measurement of<br>contingent consideration liabilities and the liabilities for the<br>Pfizer put option and Pfizer and Shionogi preferential dividends in<br>ViiV Healthcare. | ||||||||||||
| --- | ||||||||||||
| Charge/(credit) | H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | ||||||||||
| --- | --- | --- | ||||||||||
| Contingent<br>consideration on former Shionogi-ViiV Healthcare joint<br>Venture<br><br><br>(including<br>Shionogi preferential dividends) | 841 | 259 | ||||||||||
| ViiV<br>Healthcare put options and Pfizer preferential<br>dividends | 150 | (90) | ||||||||||
| Contingent<br>consideration on former Novartis Vaccines business | 40 | 39 | ||||||||||
| Other<br>adjustments | 1 | 38 | ||||||||||
| Total<br>transaction-related charges | 1,032 | 246 | ||||||||||
| The £841 million charge relating to the contingent<br>consideration for the former Shionogi-ViiV Healthcare joint venture<br>represented an increase in the valuation of the contingent<br>consideration due to Shionogi, as a result of the unwind of the<br>discount for £196 million and a charge of £645 million<br>primarily from exchange rates as well as adjustments to sales<br>forecasts. The £150 million charge relating to the ViiV<br>Healthcare put option and Pfizer preferential dividends represented<br>an increase in the valuation of the put option primarily as a<br>result of updated exchange rates as well as adjustments to sales<br>forecasts.<br><br><br><br><br><br>The<br>ViiV Healthcare contingent consideration liability is fair valued<br>under IFRS. An explanation of the accounting for the<br>non-controlling interests in ViiV Healthcare is set out on page<br>38.<br><br><br><br><br><br>Divestments, significant legal charges, and other<br>items<br><br><br>Divestments,<br>significant legal charges and other items primarily included the<br>£929 million upfront settlement income received from Gilead,<br>as well as milestone income and gains from a number of asset<br>disposals and certain other Adjusting items.<br><br><br><br><br><br>Discontinued operations<br><br><br>From Q2<br>2020, the Group started to report additional costs to prepare for<br>establishment of the Consumer Healthcare business as an independent<br>entity (“Separation costs”). These are now presented as<br>part of discontinued operations. Total separation costs incurred in<br>H1 2022 were £302 million (H1 2021: £109 million). This<br>includes £52 million relating to transaction costs incurred in<br>connection with the demerger and preparatory admission costs<br>related to the listing of Haleon.<br><br><br><br><br><br>Total<br>separation costs to date are £684 million including £90<br>million relating to transaction costs. | ||||||||||||
| --- | ||||||||||||
| Cash<br>generation | ||||||||||||
| --- | ||||||||||||
| Cash flow | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | H1<br>2022<br><br><br>£m | H1<br>2021<br><br><br>£m | ||||||||||
| --- | --- | --- | --- | |||||||||
| Cash<br>generated from operations attributable to continuing<br><br><br>operations<br>(£m) | 1,584 | 3,936 | 1,759 | |||||||||
| Cash<br>generated from operations attributable to discontinued<br><br><br>operations<br>(£m) | 515 | 918 | 564 | |||||||||
| Total<br>cash generated from operations (£m) | 2,099 | 4,854 | 2,323 | |||||||||
| Net<br>cash inflow from operating activities from continuing<br><br><br>operations | 1,196 | 3,402 | 1,217 | |||||||||
| Net<br>cash inflow from operating activities from<br>discontinued<br><br><br>operations | 439 | 775 | 406 | |||||||||
| Total<br>net cash generated from operating activities (£m) | 1,635 | 4,177 | 1,623 | |||||||||
| Free<br>cash inflow from continuing operations** (£m) | 264 | 1,741 | 137 | |||||||||
| Free<br>cash flow from continuing operations growth (%) | >100% | >100% | N/A | |||||||||
| Free<br>cash flow conversion from continuing operations* (%) | 37% | 79% | 7% | |||||||||
| Total<br>net debt (**) (£m) | 21,458 | 21,458 | 21,921 | |||||||||
| * | Free<br>cash flow from continuing operations and free cash flow conversion<br>are defined on page 68. | |||||||||||
| --- | --- | |||||||||||
| ** | Net<br>debt is analysed on page 58. | |||||||||||
| Q2 2022<br><br><br>Cash generated from operations attributable to continuing<br>operations for the quarter was £1,584 million Q2 2021:<br>£1,357 million). The increase primarily reflected the increase<br>in operating profit including beneficial exchange and favourable<br>timing of collections partly offset by increased contingent<br>consideration payments reflecting the Gilead settlement in February<br>2022, adverse timing of profit share payments for<br>Xevudy<br>sales, a higher seasonal increase in<br>inventory and adverse timing of returns and<br>rebates.<br><br><br><br><br><br>Cash generated from operations attributable to discontinued<br>operations for the quarter was £515 million (Q2 2021:<br>£482 million).<br><br><br><br><br><br>Total cash payments to Shionogi in relation to the ViiV Healthcare<br>contingent consideration liability in the quarter were £395<br>million (Q2 2021: £203 million), of which £351 million<br>was recognised in cash flows from operating activities and £44<br>million was recognised in contingent consideration paid within<br>investing cash flows. These payments are deductible for tax<br>purposes.<br><br><br><br><br><br>Free<br>cash inflow from continued operations was £264 million for the<br>quarter (Q2 2021: £20 million outflow). The increase primarily<br>reflected the increase in operating profit including beneficial<br>exchange and favourable timing of collections and reduced purchases<br>of intangible assets partly offset by increased contingent<br>consideration payments reflecting the Gilead settlement in February<br>2022, adverse timing of profit share payments for Xevudy sales, a higher seasonal<br>increase in inventory, higher capital expenditure and adverse<br>timing of returns and rebates. | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>Cash generated from operations attributable to continuing<br>operations for H1 was £3,936 million (H1 2021: £1,759<br>million). The increase primarily reflected a significant increase<br>in operating profit including the upfront income from the<br>settlement with Gilead, favourable exchange, favourable timing of<br>collections and profit share payments for Xevudy sales, partly offset by increased contingent<br>consideration payments reflecting the Gilead settlement in February<br>2022 and a higher seasonal increase in<br>inventory.<br><br><br><br><br><br>Cash generated from operations attributable to discontinued<br>operations for H1 2022 was £918 million (H1 2021: £564<br>million).<br><br><br><br><br><br>Total cash payments to Shionogi in relation to the ViiV Healthcare<br>contingent consideration liability in the half year were £603<br>million (H1 2021: £419 million), of which £534 million<br>was recognised in cash flows from operating activities and £69<br>million was recognised in contingent consideration paid within<br>investing cash flows. These payments are deductible for tax<br>purposes.<br><br><br><br><br><br>Free<br>cash inflow from continuing operations was £1,741 million for<br>the six months (H1 2021: £137 million). The increase primarily<br>reflected the significant increase in operating profit including<br>the upfront income from the settlement with Gilead, favourable<br>exchange and favourable timing of collections and profit share<br>payments for Xevudy sales.<br>This was partially offset by lower proceeds from disposals,<br>increased contingent consideration payments reflecting the Gilead<br>settlement in February 2022, higher capital expenditure and a<br>higher seasonal increase in inventory. | ||||||||||||
| --- | ||||||||||||
| Total Net debt<br><br><br>At 30<br>June 2022, net debt was £21.5 billion, compared with<br>£19.8 billion at 31 December 2021, comprising gross debt of<br>£32.4 billion which increased primarily due to the debt<br>issuance for Consumer Healthcare, cash and liquid investments of<br>£8.0 billion and cash advances and a short-term loan to a<br>subsidiary of Pfizer Inc. of £2.9 billion, reflecting an<br>on-lend of a portion of the cash received from the proceeds of the<br>Consumer Healthcare bond issuance in line with Pfizer’s<br>shareholding of the Consumer Healthcare Joint Venture.<br><br><br><br><br><br>Net<br>debt increased by £1.6 billion due to dividends paid to<br>shareholders of £2.1 billion, £1.6 billion of net adverse<br>exchange impacts from the translation of non-Sterling denominated<br>debt and exchange on other financing items and £0.3 billion<br>dividends to non-controlling interests from discontinued operations<br>and £0.1 billion capital expenditure for discontinued<br>operations partly offset by £1.7 billion free cash flow from<br>continuing operations and £0.8 billion net cash inflow from<br>discontinued operating activities.<br><br><br><br><br><br>At 30<br>June 2022, GSK had short-term borrowings (including overdrafts and<br>lease liabilities) repayable within 12 months of £3,327<br>billion with loans of £2.3 billion repayable in the subsequent<br>year. | ||||||||||||
| --- | ||||||||||||
| Returns to<br>shareholders | ||||||||||||
| --- | ||||||||||||
| Quarterly dividends<br><br><br>The<br>Board has declared a second dividend for 2022 of 16.25p per share<br>(Q2 2021: 23.75p per share) retrospectively adjusted for the Share<br>Consolidation.<br><br><br><br><br><br>On 23<br>June 2021, at the new GSK Investor Update, GSK set out that from<br>2022 a progressive dividend policy will be implemented guided by a<br>40 to 60 percent pay-out ratio through the investment cycle. The<br>dividend policy, the total expected cash distribution, and the<br>respective dividend pay-out ratios for GSK remain<br>unchanged.<br><br><br><br><br><br>GSK has<br>previously stated that it expected to declare a 27p per share<br>dividend for the first half of 2022, a 22p per share dividend for<br>the second half of 2022 and a 45p per share dividend for 2023, but<br>that these targeted dividends per share would increase in step with<br>the Share Consolidation to maintain the same aggregate dividend<br>pay-out in absolute Pound Sterling terms. Accordingly, using the<br>consolidation ratio, GSK’s expected dividend for the second<br>quarter of 2022 converts to 16.25p per new ordinary share. The<br>expected dividend for the second half of 2022 converts to 27.5p per<br>new ordinary share and the expected dividend for 2023 converts to<br>56.5p per new ordinary share, rounded-up from 56.25p.<br><br><br><br><br><br>Payment of dividends<br><br><br>The<br>equivalent interim dividend receivable by ADR holders will be<br>calculated based on the exchange rate on 4 October 2022. An annual<br>fee of $0.03 per ADS (or $0.0075 per ADS per quarter) is charged by<br>the Depositary. The ex-dividend date will be 18 August 2022, with a<br>record date of 19 August 2022 and a payment date of 6 October<br>2022. | ||||||||||||
| --- | ||||||||||||
| Paid/<br><br><br>Payable | Pence<br>per<br><br><br>share/<br><br><br>pre<br>share<br><br><br>consolidation | Pence<br>per<br><br><br>share/<br><br><br>post<br>share<br><br><br>consolidation | £m | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| 2022 | ||||||||||||
| First<br>interim | 1 July<br>2022 | 14 | 17.50 | 704 | ||||||||
| Second<br>interim | 6<br>October 2022 | 13 | 16.25 | 654 | ||||||||
| Paid/<br><br><br>Payable | Pence<br>per<br><br><br>share/<br><br><br>pre<br>share<br><br><br>consolidation | Pence<br>per<br><br><br>share/<br><br><br>post<br>share<br><br><br>consolidation | £m | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| 2021 | ||||||||||||
| First<br>interim | 8 July<br>2021 | 19 | 23.75 | 951 | ||||||||
| Second<br>interim | 7<br>October 2021 | 19 | 23.75 | 951 | ||||||||
| Third<br>interim | 13<br>January 2022 | 19 | 23.75 | 952 | ||||||||
| Fourth<br>interim | 7 April<br>2022 | 23 | 28.75 | 1,157 | ||||||||
| 80 | 100 | 4,011 | ||||||||||
| For<br>details of the Share Consolidation see page 53. | ||||||||||||
| --- | ||||||||||||
| Weighted average number of shares | ||||||||||||
| --- | --- | --- | ||||||||||
| Q2 2022<br><br><br>millions | Q2<br>2021<br><br><br>millions(a) | |||||||||||
| Weighted<br>average number of shares – basic | 4,025 | 4,003 | ||||||||||
| Dilutive<br>effect of share options and share awards | 39 | 35 | ||||||||||
| Weighted<br>average number of shares – diluted | 4,064 | 4,038 | ||||||||||
| Weighted average number of shares | ||||||||||||
| --- | --- | --- | ||||||||||
| H1 2022<br><br><br>millions | H1<br>2021<br><br><br>millions(a) | |||||||||||
| Weighted<br>average number of shares – basic | 4,021 | 3,999 | ||||||||||
| Dilutive<br>effect of share options and share awards | 38 | 35 | ||||||||||
| Weighted<br>average number of shares – diluted | 4,059 | 4,034 | ||||||||||
| (a) | See<br>page 53 for details of the Share Consolidation. | |||||||||||
| --- | --- | |||||||||||
| At 30<br>June 2022, 4,026 million shares (Q2 2021: 4,004 million) were in<br>free issue (excluding Treasury shares and shares held by the ESOP<br>Trusts), after taking into account the Share Consolidation on 18<br>July 2022. GSK made no share repurchases during the period. The<br>company issued 0.3 million shares under employee share schemes in<br>the period for proceeds of £3 million (Q2 2021: £4<br>million). | ||||||||||||
| --- | ||||||||||||
| At 30<br>June 2022 , the ESOP Trust held 50.0 million GSK shares (before the<br>Share Consolidation on 18 July 2022) against the future exercise of<br>share options and share awards. The carrying value of £371<br>million has been deducted from other reserves. The market value of<br>these shares was £925 million.<br><br><br><br><br><br>At 30<br>June 2022, the company held 243.9 million Treasury shares after<br>taking into account the Share Consolidation on 18 July 2022 at a<br>cost of £4,265 million which has been deducted from retained<br>earnings. | ||||||||||||
| --- | ||||||||||||
| Total and Adjusted<br>results | ||||||||||||
| --- | ||||||||||||
| Total<br>reported results represent the Group’s overall<br>performance.<br><br><br><br><br><br>GSK<br>also uses a number of adjusted, non-IFRS, measures to report the<br>performance of its business. Adjusted results and other non-IFRS<br>measures may be considered in addition to, but not as a substitute<br>for or superior to, information presented in accordance with IFRS.<br>Adjusted results are defined below and other non-IFRS measures are<br>defined on page 68.<br><br><br><br><br><br>GSK<br>believes that Adjusted results, when considered together with Total<br>results, provide investors, analysts and other stakeholders with<br>helpful complementary information to understand better the<br>financial performance and position of the Group from period to<br>period, and allow the Group’s performance to be more easily<br>compared against the majority of its peer companies. These measures<br>are also used by management for planning and reporting purposes.<br>They may not be directly comparable with similarly described<br>measures used by other companies.<br><br><br><br><br><br>GSK<br>encourages investors and analysts not to rely on any single<br>financial measure but to review GSK’s quarterly results<br>announcements, including the financial statements and notes, in<br>their entirety.<br><br><br><br><br><br>GSK is<br>committed to continuously improving its financial reporting, in<br>line with evolving regulatory requirements and best practice. In<br>line with this practice, GSK expects to continue to review and<br>refine its reporting framework.<br><br><br><br><br><br>Adjusted<br>results exclude the profits from discontinued operations from the<br>Consumer Healthcare business (see details on page 20 and the<br>following items in relation to our continuing operations from Total<br>results, together with the tax effects of all of these<br>items: | ||||||||||||
| --- | ||||||||||||
| ● | amortisation<br>of intangible assets (excluding computer software and capitalised<br>development costs) | |||||||||||
| --- | --- | |||||||||||
| ● | impairment<br>of intangible assets (excluding computer software) and<br>goodwill | |||||||||||
| ● | Major<br>restructuring costs, which include impairments of tangible assets<br>and computer software, (under specific Board approved programmes<br>that are structural, of a significant scale and where the costs of<br>individual or related projects exceed £25 million), including<br>integration costs following material acquisitions | |||||||||||
| ● | transaction-related<br>accounting or other adjustments related to significant<br>acquisitions | |||||||||||
| ● | proceeds<br>and costs of disposal of associates, products and businesses;<br>significant settlement income; significant legal charges (net of<br>insurance recoveries) and expenses on the settlement of litigation<br>and government investigations; other operating income other than<br>royalty income, and other items | |||||||||||
| Costs<br>for all other ordinary course smaller scale restructuring and legal<br>charges and expenses from continuing operations are retained within<br>both Total and Adjusted results.<br><br><br><br><br><br>As<br>Adjusted results include the benefits of Major restructuring<br>programmes but exclude significant costs (such as significant<br>legal, major restructuring and transaction items) they should not<br>be regarded as a complete picture of the Group’s financial<br>performance, which is presented in Total results. The exclusion of<br>other Adjusting items may result in Adjusted earnings being<br>materially higher or lower than Total earnings. In particular, when<br>significant impairments, restructuring charges and legal costs are<br>excluded, Adjusted earnings will be higher than Total<br>earnings.<br><br><br><br><br><br>GSK has<br>undertaken a number of Major restructuring programmes in response<br>to significant changes in the Group’s trading environment or<br>overall strategy, or following material acquisitions. Within the<br>Pharmaceuticals sector, the highly regulated manufacturing<br>operations and supply chains and long lifecycle of the business<br>mean that restructuring programmes, particularly those that involve<br>the rationalisation or closure of manufacturing or R&D sites<br>are likely to take several years to complete. Costs, both cash and<br>non-cash, of these programmes are provided for as individual<br>elements are approved and meet the accounting recognition criteria.<br>As a result, charges may be incurred over a number of years<br>following the initiation of a Major restructuring<br>programme.<br><br><br><br><br><br>Significant<br>legal charges and expenses are those arising from the settlement of<br>litigation or government investigations that are not in the normal<br>course and materially larger than more regularly occurring<br>individual matters. They also include certain major legacy<br>matters.<br><br><br><br><br><br>Reconciliations<br>between Total and Adjusted results, providing further information<br>on the key Adjusting items, are set out on pages 17, 18, 29 and<br>30.<br><br><br><br><br><br>GSK<br>provides earnings guidance to the investor community on the basis<br>of Adjusted results. This is in line with peer companies and<br>expectations of the investor community, supporting easier<br>comparison of the Group’s performance with its peers. GSK is<br>not able to give guidance for Total results as it cannot reliably<br>forecast certain material elements of the Total results,<br>particularly the future fair value movements on contingent<br>consideration and put options that can and have given rise to<br>significant adjustments driven by external factors such as currency<br>and other movements in capital markets. | ||||||||||||
| --- | ||||||||||||
| ViiV Healthcare<br><br><br>ViiV<br>Healthcare is a subsidiary of the Group and 100% of its operating<br>results (turnover, operating profit, profit after tax) are included<br>within the Group income statement.<br><br><br><br><br><br>Earnings<br>are allocated to the three shareholders of ViiV Healthcare on the<br>basis of their respective equity shareholdings (GSK 78.3%, Pfizer<br>11.7% and Shionogi 10%) and their entitlement to preferential<br>dividends, which are determined by the performance of certain<br>products that each shareholder contributed. As the relative<br>performance of these products changes over time, the proportion of<br>the overall earnings allocated to each shareholder also changes. In<br>particular, the increasing proportion of sales of dolutegravir and<br>cabotegravir-containing products has a favourable impact on the<br>proportion of the preferential dividends that is allocated to GSK.<br>Adjusting items are allocated to shareholders based on their equity<br>interests. GSK was entitled to approximately 86% of the Total<br>earnings and 83% of the Adjusted earnings of ViiV Healthcare for<br>2021.<br><br><br><br><br><br>As<br>consideration for the acquisition of Shionogi’s interest in<br>the former Shionogi-ViiV Healthcare joint venture in 2012, Shionogi<br>received the 10% equity stake in ViiV Healthcare and ViiV<br>Healthcare also agreed to pay additional future cash consideration<br>to Shionogi, contingent on the future sales performance of the<br>products being developed by that joint venture, dolutegravir and<br>cabotegravir. Under IFRS 3 ‘Business combinations’, GSK<br>was required to provide for the estimated fair value of this<br>contingent consideration at the time of acquisition and is required<br>to update the liability to the latest estimate of fair value at<br>each subsequent period end. The liability for the contingent<br>consideration recognised in the balance sheet at the date of<br>acquisition was £659 million. Subsequent re-measurements are<br>reflected within other operating income/(expense) and within<br>Adjusting items in the income statement in each<br>period.<br><br><br><br><br><br>On 1<br>February 2022, ViiV Healthcare reached agreement with Gilead to<br>settle the global patent infringement litigation relating to the<br>commercialisation of Gilead’s Biktarvy. Under the terms of the global settlement and<br>licensing agreement, Gilead made an upfront payment of $1.25<br>billion to ViiV Healthcare in February<br>2022. In addition, Gilead will also pay a 3% royalty on all future<br>US sales of Biktarvy and in respect of the bictegravir component of<br>any other future bictegravir-containing products sold in the US.<br>These royalties will be payable by Gilead to ViiV Healthcare from 1<br>February 2022 until the expiry of ViiV Healthcare's US<br>Patent No. 8,129,385 on 5 October<br>2027. Gilead's obligation to pay royalties does not extend into any<br>period of regulatory paediatric exclusivity, if<br>awarded.<br><br><br><br><br><br>Cash<br>payments to settle the contingent consideration are made to<br>Shionogi by ViiV Healthcare each quarter, based on the actual sales<br>performance and other income of the relevant products in the<br>previous quarter. These payments reduce the balance sheet liability<br>and hence are not recorded in the income statement. The cash<br>payments made to Shionogi by ViiV Healthcare in H1 2022 were<br>£603 million.<br><br><br><br><br><br>As the<br>liability is required to be recorded at the fair value of estimated<br>future payments, there is a significant timing difference between<br>the charges that are recorded in the Total income statement to<br>reflect movements in the fair value of the liability and the actual<br>cash payments made to settle the liability.<br><br><br><br><br><br>Further<br>explanation of the acquisition-related arrangements with ViiV<br>Healthcare are set out on pages 57 and 58 of the Annual Report<br>2021. | ||||||||||||
| --- | ||||||||||||
| Financial information | ||||||||||||
| --- | ||||||||||||
| Income<br>statements | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021(a)<br><br><br>£m | H1 2022<br><br><br>£m | H1<br>2021(a)<br><br><br>£m | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| TURNOVER | 6,929 | 5,838 | 14,119 | 10,993 | ||||||||
| Cost of<br>sales | (2,176) | (1,708) | (4,893) | (3,362) | ||||||||
| Gross<br>profit | 4,753 | 4,130 | 9,226 | 7,631 | ||||||||
| Selling,<br>general and administration | (2,066) | (1,689) | (3,878) | (3,198) | ||||||||
| Research<br>and development | (1,242) | (1,167) | (2,345) | (2,227) | ||||||||
| Royalty income | 159 | 77 | 297 | 166 | ||||||||
| Other<br>operating income/(expense) | (523) | (76) | 74 | 113 | ||||||||
| OPERATING PROFIT | 1,081 | 1,275 | 3,374 | 2,485 | ||||||||
| Finance<br>income | 21 | 4 | 28 | 10 | ||||||||
| Finance<br>expense | (204) | (189) | (409) | (387) | ||||||||
| Loss on<br>disposal of interests in associates | - | (36) | - | (36) | ||||||||
| Share<br>of after tax (losses)/profits of associates<br><br><br>and<br>joint ventures | (2) | 16 | (3) | 32 | ||||||||
| PROFIT BEFORE TAXATION | 896 | 1,070 | 2,990 | 2,104 | ||||||||
| Taxation | (150) | 201 | (473) | 46 | ||||||||
| Tax rate % | 16.7% | (18.8)% | 15.8% | (2.2)% | ||||||||
| PROFIT AFTER TAXATION FROM<br><br><br>CONTINUING OPERATIONS | 746 | 1,271 | 2,517 | 2,150 | ||||||||
| PROFIT AFTER TAXATION FROM<br><br><br>DISCONTINUED OPERATIONS | 229 | 267 | 625 | 648 | ||||||||
| PROFIT AFTER TAXATION FROM THE PERIOD | 975 | 1,538 | 3,142 | 2,798 | ||||||||
| Profit<br>attributable to non-controlling interests<br><br><br>from<br>continuing operations | 40 | 57 | 315 | 137 | ||||||||
| Profit<br>attributable to shareholders from<br><br><br>continuing<br>operations | 706 | 1,214 | 2,202 | 2,013 | ||||||||
| Profit<br>attributable to non-controlling interests<br><br><br>from<br>discontinued operations | 97 | 86 | 187 | 193 | ||||||||
| Profit<br>attributable to shareholders from<br><br><br>discontinued<br>operations | 132 | 181 | 438 | 455 | ||||||||
| 975 | 1,538 | 3,142 | 2,798 | |||||||||
| Profit<br>attributable to non-controlling interests | 137 | 143 | 502 | 330 | ||||||||
| Profit<br>attributable to shareholders | 838 | 1,395 | 2,640 | 2,468 | ||||||||
| 975 | 1,538 | 3,142 | 2,798 | |||||||||
| EARNINGS PER SHARE FROM CONTINUING OPERATIONS | 17.5p | 30.3p | 54.8p | 50.3p | ||||||||
| EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS | 3.3p | 4.5p | 10.9p | 11.4p | ||||||||
| TOTAL EARNINGS PER SHARE | 20.8p | 34.8p | 65.7p | 61.7p | ||||||||
| Diluted<br>earnings per share from continuing<br><br><br>operations | 17.4p | 30.1p | 54.3p | 49.9p | ||||||||
| Diluted<br>earnings per share from discontinued<br><br><br>operations | 3.2p | 4.4p | 10.7p | 11.3p | ||||||||
| Total<br>diluted earnings per share | 20.6p | 34.5p | 65.0p | 61.2p | ||||||||
| (a) | The<br>2021 comparative results have been restated on a consistent basis<br>from those previously published to reflect the classification of<br>the Consumer Healthcare business as a discontinued operation (see<br>page 20) and the impact of Share Consolidation implemented on 18<br>July 2022 (see page 53). | |||||||||||
| --- | --- | |||||||||||
| Statement of comprehensive<br>income | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021(a)<br><br><br>£m | H1 2022<br><br><br>£m | H1<br>2021(a)<br><br><br>£m | |||||||||
| --- | --- | --- | --- | --- | ||||||||
| Total<br>profit for the period | 975 | 1,538 | 3,142 | 2,798 | ||||||||
| Items that may be reclassified subsequently to continuing<br>operations income statement: | ||||||||||||
| Exchange<br>movements on overseas net assets<br><br><br>and<br>net investment hedges | (179) | 70 | (198) | (40) | ||||||||
| Reclassification<br>of exchange movements on<br><br><br>liquidation<br>or disposal of overseas subsidiaries<br><br><br>and<br>associates | 9 | (10) | 9 | (10) | ||||||||
| Fair<br>value movements on cash flow hedges | - | 9 | 2 | (2) | ||||||||
| Reclassification<br>of cash flow hedges to income<br><br><br>statement | 14 | 2 | 13 | 16 | ||||||||
| Deferred<br>tax on fair value movements on cash<br><br><br>flow<br>hedges | - | (3) | - | (3) | ||||||||
| (156) | 68 | (174) | (39) | |||||||||
| Items that will not be reclassified to continuing operations income<br>statement: | ||||||||||||
| Exchange<br>movements on overseas net assets<br><br><br>of<br>non-controlling interests | (3) | (2) | - | (7) | ||||||||
| Fair<br>value movements on equity investments | (81) | (78) | (624) | 158 | ||||||||
| Tax on<br>fair value movements on equity<br><br><br>investments | 10 | (16) | 57 | 38 | ||||||||
| Re-measurement<br>gains on defined benefit plans | 200 | 257 | 513 | 285 | ||||||||
| Tax on<br>re-measurement losses on defined<br><br><br>benefit<br>plans | (53) | (40) | (126) | (52) | ||||||||
| 73 | 121 | (180) | 422 | |||||||||
| Other<br>comprehensive (expense)/income for the<br><br><br>period<br>from continuing operations | (83) | 189 | (354) | 383 | ||||||||
| Other<br>comprehensive income/(expense) for the<br><br><br>period<br>from discontinued operations | 493 | (10) | 928 | (201) | ||||||||
| Total<br>comprehensive income for the period | 1,385 | 1,717 | 3,716 | 2,980 | ||||||||
| Total<br>comprehensive income for the period<br><br><br>attributable<br>to: | ||||||||||||
| Shareholders | 1,277 | 1,577 | 3,239 | 2,687 | ||||||||
| Non-controlling<br>interests | 108 | 140 | 477 | 293 | ||||||||
| 1,385 | 1,717 | 3,716 | 2,980 | |||||||||
| (a) | The<br>2021 comparative results have been restated on a consistent basis<br>from those previously published to reflect the classification of<br>the Consumer Healthcare business as a discontinued operation (see<br>page 20) and the impact of Share Consolidation implemented on 18<br>July 2022 (see page 53). | |||||||||||
| --- | --- | |||||||||||
| Specialty Medicines turnover – three months ended 30 June<br>2022 | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| HIV | 1,404 | 14 | 7 | 894 | 25 | 13 | 336 | 15 | 17 | 174 | (23) | (27) |
| Dolutegravir<br>products | 1,279 | 8 | 1 | 796 | 15 | 5 | 320 | 14 | 16 | 163 | (25) | (30) |
| Tivicay | 346 | (15) | (21) | 201 | 3 | (7) | 72 | - | 3 | 73 | (47) | (53) |
| Triumeq | 461 | (1) | (7) | 307 | 5 | (5) | 97 | (13) | (12) | 57 | (8) | (10) |
| Juluca | 152 | 15 | 7 | 116 | 15 | 4 | 33 | 22 | 22 | 3 | (25) | (25) |
| Dovato | 320 | 74 | 66 | 172 | 69 | 54 | 118 | 71 | 74 | 30 | >100 | >100 |
| Rukobia | 19 | 90 | 70 | 18 | 80 | 70 | - | - | - | 1 | >100 | >(100) |
| Cabenuva | 72 | >100 | >100 | 63 | >100 | >100 | 8 | >100 | >100 | 1 | >100 | >100 |
| Apretude | 8 | - | - | 8 | - | - | - | - | - | - | - | - |
| Other | 26 | (19) | (25) | 9 | (25) | (50) | 8 | (27) | (36) | 9 | - | 22 |
| Oncology | 154 | 29 | 23 | 83 | 22 | 10 | 62 | 27 | 29 | 9 | >100 | >100 |
| Zejula | 120 | 22 | 16 | 63 | 17 | 6 | 48 | 17 | 20 | 9 | >100 | >100 |
| Blenrep | 30 | 43 | 33 | 19 | 36 | 21 | 11 | 37 | 37 | - | - | - |
| Jemperli | 4 | >100 | >100 | 1 | >100 | >100 | 3 | >100 | 100 | - | - | - |
| Immuno-<br><br><br>inflammation,<br><br><br>respiratory and other | 680 | 32 | 24 | 487 | 35 | 23 | 92 | 12 | 12 | 101 | 42 | 46 |
| Benlysta | 297 | 39 | 29 | 251 | 40 | 27 | 20 | 18 | 24 | 26 | 44 | 44 |
| Nucala | 367 | 26 | 19 | 236 | 30 | 18 | 74 | 14 | 15 | 57 | 27 | 29 |
| Speciality Medicines<br><br><br>excluding pandemic | 2,238 | 20 | 13 | 1,464 | 28 | 16 | 490 | 16 | 17 | 284 | (5) | (8) |
| Pandemic | 466 | >100 | >100 | 23 | >100 | >100 | 123 | - | - | 320 | >100 | >100 |
| Xevudy | 466 | >100 | >100 | 23 | >100 | >100 | 123 | - | - | 320 | >100 | >100 |
| Specialty Medicines | 2,704 | 44 | 35 | 1,487 | 30 | 16 | 613 | 45 | 47 | 604 | 91 | 90 |
| Specialty Medicines turnover – six months ended 30 June<br>2022 | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| HIV | 2,585 | 14 | 10 | 1,591 | 21 | 13 | 635 | 10 | 13 | 359 | (4) | (5) |
| Dolutegravir<br>products | 2,381 | 9 | 6 | 1,437 | 13 | 6 | 607 | 8 | 11 | 337 | (4) | (6) |
| Tivicay | 666 | (6) | (9) | 361 | 1 | (6) | 137 | (7) | (4) | 168 | (17) | (19) |
| Triumeq | 853 | (5) | (9) | 552 | 1 | (6) | 191 | (18) | (16) | 110 | (9) | (9) |
| Juluca | 285 | 17 | 12 | 215 | 17 | 9 | 63 | 19 | 23 | 7 | - | - |
| Dovato | 577 | 78 | 73 | 309 | 76 | 64 | 216 | 70 | 75 | 52 | >100 | >100 |
| Rukobia | 35 | >100 | 88 | 33 | 94 | 82 | 1 | >100 | >100 | 1 | >100 | >(100) |
| Cabenuva | 110 | >100 | >100 | 95 | >100 | >100 | 14 | >100 | >100 | 1 | >100 | >100 |
| Apretude | 10 | - | - | 10 | - | - | - | - | - | - | - | - |
| Other | 49 | (23) | (22) | 16 | (33) | (42) | 13 | (28) | (28) | 20 | (9) | 5 |
| Oncology | 281 | 23 | 19 | 152 | 14 | 7 | 116 | 26 | 29 | 13 | >100 | >100 |
| Zejula | 218 | 17 | 14 | 114 | 9 | 1 | 91 | 18 | 21 | 13 | >100 | >100 |
| Blenrep | 55 | 31 | 26 | 35 | 25 | 18 | 20 | 33 | 33 | - | - | - |
| Jemperli | 8 | >100 | >100 | 3 | >100 | >100 | 5 | >100 | >100 | - | - | - |
| Immuno-<br><br><br>inflammation,<br><br><br>respiratory and other | 1,200 | 26 | 21 | 834 | 27 | 19 | 176 | 10 | 13 | 190 | 39 | 42 |
| Benlysta | 512 | 31 | 24 | 421 | 30 | 21 | 39 | 18 | 21 | 52 | 49 | 49 |
| Nucala | 662 | 21 | 18 | 413 | 24 | 16 | 139 | 9 | 13 | 110 | 26 | 30 |
| Speciality Medicines<br><br><br>excluding pandemic | 4,066 | 18 | 14 | 2,577 | 23 | 15 | 927 | 12 | 15 | 562 | 9 | 9 |
| Pandemic | 1,773 | >100 | >100 | 793 | >100 | >100 | 434 | - | - | 546 | >100 | >100 |
| Xevudy | 1,773 | >100 | >100 | 793 | >100 | >100 | 434 | - | - | 546 | >100 | >100 |
| Specialty Medicines | 5,839 | 69 | 63 | 3,370 | 60 | 50 | 1,361 | 64 | 67 | 1,108 | >100 | >100 |
| Vaccines turnover – three months ended 30 June<br>2022 | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| Meningitis | 235 | 4 | - | 120 | 10 | (1) | 87 | (9) | (6) | 28 | 40 | 40 |
| Bexsero | 165 | - | (3) | 65 | 8 | (3) | 81 | (9) | (7) | 19 | 19 | 19 |
| Menveo | 69 | 17 | 10 | 55 | 12 | 2 | 5 | - | - | 9 | 80 | >100 |
| Other | 1 | - | - | - | - | - | 1 | (50) | - | - | - | - |
| Influenza | 32 | (3) | (9) | 1 | >100 | >100 | - | - | - | 31 | (6) | (12) |
| Fluarix, FluLaval | 32 | (3) | (9) | 1 | >100 | >100 | - | - | - | 31 | (6) | (12) |
| Shingles | 731 | >100 | >100 | 519 | >100 | 97 | 151 | >100 | >100 | 61 | >100 | >100 |
| Shingrix | 731 | >100 | >100 | 519 | >100 | 97 | 151 | >100 | >100 | 61 | >100 | >100 |
| Established<br><br><br>Vaccines | 717 | (5) | (9) | 257 | 8 | (3) | 176 | 12 | 13 | 284 | (22) | (23) |
| Infanrix, Pediarix | 120 | (12) | (19) | 51 | (35) | (45) | 31 | 15 | 15 | 38 | 23 | 16 |
| Boostrix | 158 | 8 | 3 | 95 | 44 | 30 | 38 | 9 | 11 | 25 | (44) | (44) |
| Hepatitis | 159 | 45 | 35 | 98 | 53 | 39 | 39 | 56 | 56 | 22 | 5 | - |
| Rotarix | 120 | (9) | (8) | 14 | (46) | (54) | 29 | 7 | 11 | 77 | (3) | - |
| Synflorix | 84 | (13) | (14) | - | - | - | 10 | 11 | - | 74 | (16) | (16) |
| Priorix, Priorix<br><br><br>Tetra, Varilrix | 40 | (26) | (26) | - | - | - | 23 | (4) | (8) | 17 | (43) | (40) |
| Cervarix | 22 | (39) | (44) | - | - | - | 4 | (43) | (43) | 18 | (38) | (45) |
| Other | 14 | (70) | (70) | (1) | >(100) | (60) | 2 | (33) | 33 | 13 | (67) | (79) |
| Vaccines excluding<br><br><br>pandemic | 1,715 | 31 | 24 | 897 | 53 | 38 | 414 | 39 | 42 | 404 | (6) | (8) |
| Pandemic vaccines | - | (100) | (100) | - | (100) | (100) | - | - | - | - | (100) | (100) |
| Pandemic<br>adjuvant | - | (100) | (100) | - | (100) | (100) | - | - | - | - | (100) | (100) |
| Vaccines | 1,715 | 9 | 3 | 897 | 13 | 2 | 414 | 39 | 42 | 404 | (15) | (18) |
| Vaccines turnover – six months ended 30 June<br>2022 | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| Meningitis | 447 | 8 | 6 | 219 | 34 | 24 | 170 | (9) | (6) | 58 | (11) | (8) |
| Bexsero | 328 | 10 | 9 | 131 | 44 | 34 | 160 | (8) | (6) | 37 | 9 | 15 |
| Menveo | 111 | 13 | 8 | 88 | 21 | 12 | 8 | (11) | (11) | 15 | (6) | - |
| Other | 8 | (56) | (56) | - | - | - | 2 | (33) | - | 6 | (60) | (67) |
| Influenza | 50 | (2) | (6) | 2 | >100 | >100 | - | - | - | 48 | (6) | (10) |
| Fluarix, FluLaval | 50 | (2) | (6) | 2 | >100 | >100 | - | - | - | 48 | (6) | (10) |
| Shingles | 1,429 | >100 | >100 | 1,009 | 99 | 86 | 311 | >100 | >100 | 109 | >100 | >100 |
| Shingrix | 1,429 | >100 | >100 | 1,009 | 99 | 86 | 311 | >100 | >100 | 109 | >100 | >100 |
| Established<br><br><br>Vaccines | 1,458 | 1 | (1) | 559 | 33 | 25 | 342 | - | 2 | 557 | (19) | (19) |
| Infanrix, Pediarix | 295 | 8 | 4 | 163 | 15 | 7 | 60 | (10) | (9) | 72 | 14 | 11 |
| Boostrix | 284 | 18 | 15 | 165 | 51 | 41 | 71 | - | 3 | 48 | (20) | (20) |
| Hepatitis | 281 | 37 | 32 | 176 | 53 | 43 | 68 | 39 | 41 | 37 | (10) | (10) |
| Rotarix | 237 | (4) | (2) | 49 | 2 | (4) | 61 | 7 | 11 | 127 | (10) | (6) |
| Synflorix | 165 | (17) | (17) | - | - | - | 16 | (24) | (24) | 149 | (16) | (16) |
| Priorix, Priorix<br><br><br>Tetra, Varilrix | 87 | (26) | (26) | - | - | - | 51 | (9) | (9) | 36 | (41) | (41) |
| Cervarix | 51 | (37) | (41) | - | - | - | 8 | (47) | (47) | 43 | (35) | (39) |
| Other | 58 | (33) | (32) | 6 | - | 33 | 7 | - | 29 | 45 | (39) | (43) |
| Vaccines excluding<br><br><br>pandemic | 3,384 | 33 | 30 | 1,789 | 64 | 53 | 823 | 36 | 40 | 772 | (8) | (9) |
| Pandemic vaccines | - | (100) | (100) | - | (100) | (100) | - | - | - | - | (100) | (100) |
| Pandemic<br>adjuvant | - | (100) | (100) | - | (100) | (100) | - | - | - | - | (100) | (100) |
| Vaccines | 3,384 | 21 | 17 | 1,789 | 38 | 29 | 823 | 36 | 40 | 772 | (13) | (14) |
| General Medicines turnover – three months ended 30 June<br>2022 | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| Respiratory | 1,649 | 9 | 4 | 846 | 11 | 1 | 348 | 4 | 5 | 455 | 8 | 7 |
| Arnuity Ellipta | 13 | 30 | 20 | 11 | 22 | 22 | - | - | - | 2 | 100 | - |
| Anoro Ellipta | 118 | (12) | (16) | 59 | (23) | (31) | 39 | 8 | 11 | 20 | (5) | (5) |
| Avamys/Veramyst | 74 | 17 | 14 | - | - | - | 20 | - | - | 54 | 26 | 21 |
| Flixotide/Flovent | 143 | 36 | 28 | 98 | 44 | 31 | 18 | 20 | 27 | 27 | 23 | 18 |
| Incruse Ellipta | 51 | (4) | (8) | 29 | - | (14) | 17 | (11) | (16) | 5 | - | 60 |
| Relvar/Breo Ellipta | 309 | (1) | (4) | 150 | (2) | (11) | 87 | 4 | 5 | 72 | (4) | (1) |
| Seretide/Advair | 262 | (24) | (27) | 61 | (54) | (60) | 73 | (8) | (6) | 128 | (6) | (7) |
| Trelegy Ellipta | 467 | 60 | 50 | 354 | 74 | 58 | 58 | 18 | 20 | 55 | 45 | 47 |
| Ventolin | 174 | 4 | (2) | 85 | (4) | (15) | 27 | 8 | 12 | 62 | 17 | 11 |
| Other<br>Respiratory | 38 | 19 | 16 | (1) | 50 | >100 | 9 | 12 | - | 30 | 11 | 4 |
| Other General Medicines | 861 | (1) | (2) | 87 | 6 | (6) | 174 | (15) | (14) | 600 | 4 | 4 |
| Dermatology | 91 | (11) | (11) | - | - | - | 28 | (20) | (20) | 63 | (6) | (6) |
| Augmentin | 130 | 43 | 45 | - | - | - | 37 | 28 | 31 | 93 | 50 | 52 |
| Avodart | 81 | (5) | (6) | - | - | - | 27 | (10) | (7) | 54 | (2) | (5) |
| Lamictal | 127 | 9 | 3 | 65 | 18 | 7 | 27 | (4) | (4) | 35 | 6 | - |
| Other | 399 | (9) | (9) | 22 | (19) | (33) | 55 | (34) | (34) | 322 | - | 1 |
| General Medicines | 2,510 | 5 | 2 | 933 | 11 | - | 522 | (3) | (2) | 1,055 | 6 | 5 |
| General Medicines turnover – six months ended 30 June<br>2022 | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| Respiratory | 3,184 | 6 | 3 | 1,568 | 9 | 2 | 681 | 1 | 3 | 935 | 4 | 5 |
| Arnuity Ellipta | 26 | 62 | 50 | 22 | 69 | 62 | - | - | - | 4 | 33 | - |
| Anoro Ellipta | 216 | (14) | (16) | 100 | (29) | (34) | 77 | 7 | 10 | 39 | - | 3 |
| Avamys/Veramyst | 168 | 1 | 2 | - | - | - | 36 | - | 3 | 132 | 2 | 2 |
| Flixotide/Flovent | 270 | 22 | 17 | 183 | 33 | 24 | 36 | 16 | 19 | 51 | (4) | (2) |
| Incruse Ellipta | 101 | (4) | (7) | 55 | (2) | (9) | 33 | (11) | (11) | 13 | 8 | 17 |
| Relvar/Breo Ellipta | 584 | 1 | (1) | 270 | 2 | (5) | 170 | 2 | 5 | 144 | (3) | (1) |
| Seretide/Advair | 564 | (19) | (20) | 145 | (42) | (46) | 146 | (16) | (14) | 273 | (1) | (1) |
| Trelegy Ellipta | 807 | 50 | 43 | 592 | 57 | 47 | 111 | 18 | 20 | 104 | 53 | 57 |
| Ventolin | 375 | 5 | 2 | 202 | - | (6) | 57 | 14 | 18 | 116 | 10 | 10 |
| Other<br>Respiratory | 73 | - | 2 | (1) | 50 | 100 | 15 | 7 | 7 | 59 | (5) | (5) |
| Other General Medicines | 1,712 | (1) | - | 176 | 10 | 3 | 344 | (16) | (14) | 1,192 | 4 | 5 |
| Dermatology | 183 | (9) | (8) | - | - | - | - | (20) | (19) | 128 | (4) | (2) |
| Augmentin | 259 | 42 | 48 | - | - | - | 73 | 40 | 46 | 186 | 43 | 48 |
| Avodart | 162 | (4) | (4) | - | - | - | 54 | (10) | (8) | 108 | 1 | - |
| Lamictal | 247 | 6 | 3 | 124 | 13 | 5 | 53 | (5) | (4) | 70 | 6 | 5 |
| Other | 785 | (8) | (7) | 52 | 6 | (2) | 109 | (36) | (35) | 624 | (1) | 1 |
| General Medicines | 4,896 | 3 | 2 | 1,744 | 9 | 2 | 1,025 | (5) | (3) | 2,127 | 4 | 5 |
| Commercial Operations turnover | ||||||||||||
| --- | ||||||||||||
| Total | US | Europe | International | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | Growth | Growth | Growth | |||||||||
| £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | £m | £% | CER% | |
| Three months ended 30 June 2022 | 6,929 | 19 | 13 | 3,317 | 19 | 7 | 1,549 | 23 | 25 | 2,063 | 15 | 14 |
| Six months ended<br><br><br>30 June 2022 | 14,119 | 28 | 25 | 6,903 | 38 | 29 | 3,209 | 27 | 30 | 4,007 | 16 | 17 |
| Balance<br>sheet | ||||||||||||
| --- | ||||||||||||
| 30 June 2022<br><br><br>£m | 31<br>December 2021<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| ASSETS | ||||||||||||
| Non-current assets | ||||||||||||
| Property,<br>plant and equipment | 8,503 | 9,932 | ||||||||||
| Right<br>of use assets | 650 | 740 | ||||||||||
| Goodwill | 5,906 | 10,552 | ||||||||||
| Other<br>intangible assets | 11,371 | 30,079 | ||||||||||
| Investments<br>in associates and joint ventures | 77 | 88 | ||||||||||
| Other<br>investments | 1,651 | 2,126 | ||||||||||
| Deferred<br>tax assets | 4,952 | 5,218 | ||||||||||
| Derivative<br>financial instruments | 11 | 18 | ||||||||||
| Other<br>non-current assets | 1,736 | 1,676 | ||||||||||
| Total non-current assets | 34,857 | 60,429 | ||||||||||
| Current assets | ||||||||||||
| Inventories | 4,664 | 5,783 | ||||||||||
| Current<br>tax recoverable | 413 | 486 | ||||||||||
| Trade<br>and other receivables | 6,457 | 7,860 | ||||||||||
| Derivative<br>financial instruments | 105 | 188 | ||||||||||
| Liquid<br>investments | 67 | 61 | ||||||||||
| Cash<br>and cash equivalents | 6,465 | 4,274 | ||||||||||
| Assets<br>held for sale/distribution | 36,017 | 22 | ||||||||||
| Total current assets | 54,188 | 18,674 | ||||||||||
| TOTAL ASSETS | 89,045 | 79,103 | ||||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Short-term<br>borrowings | (3,327) | (3,601) | ||||||||||
| Contingent<br>consideration liabilities | (888) | (958) | ||||||||||
| Trade<br>and other payables | (14,806) | (17,554) | ||||||||||
| Derivative<br>financial instruments | (70) | (227) | ||||||||||
| Current<br>tax payable | (295) | (489) | ||||||||||
| Short-term<br>provisions | (599) | (841) | ||||||||||
| Liabilities<br>held for distribution | (17,850) | - | ||||||||||
| Total current liabilities | (37,835) | (23,670) | ||||||||||
| Non-current liabilities | ||||||||||||
| Long-term<br>borrowings | (18,784) | (20,572) | ||||||||||
| Corporation<br>tax payable | (200) | (180) | ||||||||||
| Deferred<br>tax liabilities | (149) | (3,556) | ||||||||||
| Pensions<br>and other post-employment benefits | (2,526) | (3,113) | ||||||||||
| Other<br>provisions | (557) | (630) | ||||||||||
| Derivative<br>financial instruments | (1) | (1) | ||||||||||
| Contingent<br>consideration liabilities | (5,472) | (5,118) | ||||||||||
| Other<br>non-current liabilities | (881) | (921) | ||||||||||
| Total non-current liabilities | (28,570) | (34,091) | ||||||||||
| TOTAL LIABILITIES | (66,405) | (57,761) | ||||||||||
| NET ASSETS | 22,640 | 21,342 | ||||||||||
| EQUITY | ||||||||||||
| Share<br>capital | 1,347 | 1,347 | ||||||||||
| Share<br>premium account | 3,439 | 3,301 | ||||||||||
| Retained<br>earnings | 9,824 | 7,944 | ||||||||||
| Other<br>reserves | 1,764 | 2,463 | ||||||||||
| Shareholders’ equity | 16,374 | 15,055 | ||||||||||
| Non-controlling<br>interests | 6,266 | 6,287 | ||||||||||
| TOTAL EQUITY | 22,640 | 21,342 | ||||||||||
| Statement of changes in<br>equity | ||||||||||||
| --- | ||||||||||||
| Share<br><br><br>capital<br><br><br>£m | Share<br><br><br>premium<br><br><br>£m | Retained<br><br><br>earnings<br><br><br>£m | Other<br><br><br>reserves<br><br><br>£m | Share-<br><br><br>holder’s<br><br><br>equity<br><br><br>£m | Non-<br><br><br>controlling<br><br><br>interests<br><br><br>£m | Total<br><br><br>equity<br><br><br>£m | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||
| At 1<br>January 2022 | 1,347 | 3,301 | 7,944 | 2,463 | 15,055 | 6,287 | 21,342 | |||||
| Profit<br>for the period | 2,640 | 2,640 | 502 | 3,142 | ||||||||
| Other<br>comprehensive<br><br><br>income/(expense)<br>for the period | 1,010 | (411) | 599 | (25) | 574 | |||||||
| Total<br>comprehensive income/(expense)<br><br><br>for<br>the period | 3,650 | (411) | 3,239 | 477 | 3,716 | |||||||
| Distributions<br>to non-controlling interests | (506) | (506) | ||||||||||
| Contributions<br>from non-controlling<br><br><br>interests | 8 | 8 | ||||||||||
| Dividends<br>to shareholders | (2,108) | (2,108) | (2,108) | |||||||||
| Shares<br>issued | 20 | 20 | 20 | |||||||||
| Shares<br>acquired by ESOP Trusts | 118 | 704 | (822) | - | - | |||||||
| Share<br>of associates and joint ventures<br><br><br>realised<br>profits on disposal of equity<br><br><br>investments | (1) | 1 | - | - | ||||||||
| Realised<br>after tax losses on disposal<br><br><br>or<br>liquidation of equity investments | (23) | 23 | - | - | ||||||||
| Write-down<br>on shares held by ESOP<br><br><br>Trusts | (510) | 510 | - | - | ||||||||
| Share-based<br>incentive plans | 168 | 168 | 168 | |||||||||
| At 30 June 2022 | 1,347 | 3,439 | 9,824 | 1,764 | 16,374 | 6,266 | 22,640 | |||||
| At 1<br>January 2021 | 1,346 | 3,281 | 6,755 | 3,205 | 14,587 | 6,221 | 20,808 | |||||
| Profit<br>for the period | 2,468 | 2,468 | 330 | 2,798 | ||||||||
| Other<br>comprehensive (expense)/<br><br><br>income<br>for the period | 14 | 205 | 219 | (37) | 182 | |||||||
| Total<br>comprehensive income for the<br><br><br>period | 2,482 | 205 | 2,687 | 293 | 2,980 | |||||||
| Distributions<br>to non-controlling interests | (320) | (320) | ||||||||||
| Contributions<br>from non-controlling<br><br><br>interests | 7 | 7 | ||||||||||
| Dividends<br>to shareholders | (2,097) | (2,097) | (2,097) | |||||||||
| Shares<br>issued | 1 | 18 | 19 | 19 | ||||||||
| Realised<br>after tax profits on disposal<br><br><br>of<br>equity investments | 145 | (145) | - | - | ||||||||
| Share<br>of associates and joint ventures<br><br><br>realised<br>profits on disposal of equity<br><br><br>investments | 9 | (9) | - | - | ||||||||
| Write-down<br>on shares held by ESOP<br><br><br>Trusts | (96) | 96 | - | - | ||||||||
| Share-based<br>incentive plans | 181 | 181 | 181 | |||||||||
| At 30<br>June 2021 | 1,347 | 3,299 | 7,379 | 3,352 | 15,377 | 6,201 | 21,578 | |||||
| Cash flow statement<br>– six months ended 30 June 2022<br><br><br>(amounts presented are from continuing operations unless otherwise<br>specified) | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>£m | H1<br>2021(a)<br><br><br>£m | |||||||||||
| --- | --- | --- | --- | |||||||||
| Profit after tax from continuing operations | 2,517 | 2,150 | ||||||||||
| Tax on<br>profits | 473 | (46) | ||||||||||
| Share<br>of after tax losses/(profits) of associates and joint<br>ventures | 3 | (32) | ||||||||||
| Loss on<br>disposal of interests in associates | - | 36 | ||||||||||
| Net<br>finance expense | 381 | 377 | ||||||||||
| Depreciation,<br>amortisation and other adjusting items | 1,335 | 906 | ||||||||||
| Increase<br>in working capital | (198) | (809) | ||||||||||
| Contingent<br>consideration paid | (542) | (371) | ||||||||||
| Decrease<br>in other net liabilities (excluding contingent consideration<br>paid) | (33) | (452) | ||||||||||
| Cash generated from operations attributable to continuing<br>operations | 3,936 | 1,759 | ||||||||||
| Taxation<br>paid | (534) | (542) | ||||||||||
| Net cash inflow from continuing operating activities | 3,402 | 1,217 | ||||||||||
| Cash<br>generated from operations attributable to discontinued<br>operations | 918 | 564 | ||||||||||
| Taxation<br>paid from discontinued operations | (143) | (158) | ||||||||||
| Net operating cash flows attributable to discontinued<br>operations | 775 | 406 | ||||||||||
| Total net cash inflows from operating activities | 4,177 | 1,623 | ||||||||||
| Cash flow from investing activities | ||||||||||||
| Purchase<br>of property, plant and equipment | (430) | (352) | ||||||||||
| Proceeds<br>from sale of property, plant and equipment | 6 | 95 | ||||||||||
| Purchase<br>of intangible assets | (597) | (556) | ||||||||||
| Proceeds<br>from sale of intangible assets | 13 | 314 | ||||||||||
| Purchase<br>of equity investments | (59) | (122) | ||||||||||
| Proceeds<br>from sale of equity investments | - | 171 | ||||||||||
| Share<br>transaction with minority shareholders | 1 | 1 | ||||||||||
| Contingent<br>consideration paid | (73) | (55) | ||||||||||
| Disposal<br>of businesses | (12) | (19) | ||||||||||
| Investment<br>in associates and joint ventures | - | (1) | ||||||||||
| Proceeds<br>from disposal of associates and joint ventures | - | 277 | ||||||||||
| Interest<br>received | 26 | 10 | ||||||||||
| Decrease<br>in liquid investments | - | 18 | ||||||||||
| Dividends<br>from associates and joint ventures | - | 9 | ||||||||||
| Net cash outflow from continuing investing activities | (1,125) | (210) | ||||||||||
| Net<br>investing cash flows attributable to discontinued<br>operations | (3,013) | (23) | ||||||||||
| Total net cash outflow from investing activities | (4,138) | (233) | ||||||||||
| Cash flow from financing activities | ||||||||||||
| Issue<br>of share capital | 20 | 19 | ||||||||||
| Shares<br>acquired by ESOP trust | (3) | - | ||||||||||
| Decrease<br>in long-term loans | (3) | (2) | ||||||||||
| Repayment<br>of short-term loans | (3,062) | (352) | ||||||||||
| Repayment<br>of lease liabilities | (99) | (94) | ||||||||||
| Interest<br>paid | (437) | (431) | ||||||||||
| Dividends<br>paid to shareholders | (2,108) | (2,097) | ||||||||||
| Distributions<br>to non-controlling interests | (177) | (121) | ||||||||||
| Contributions<br>from non-controlling interests | 8 | 7 | ||||||||||
| Other<br>financing items | 264 | (99) | ||||||||||
| Net cash outflow from continuing financing activities | (5,597) | (3,170) | ||||||||||
| Net<br>financing cash flows attributable to discontinued<br>operations | 9,084 | (251) | ||||||||||
| Total net cash inflow/(outflow) from financing<br>activities | 3,487 | (3,421) | ||||||||||
| Increase/(decrease) in cash and bank overdrafts in the<br>period | 3,526 | (2,031) | ||||||||||
| Cash<br>and bank overdrafts at beginning of the period | 3,817 | 5,261 | ||||||||||
| Exchange<br>adjustments | 83 | (34) | ||||||||||
| Increase/(decrease)<br>in cash and bank overdrafts | 3,526 | (2,031) | ||||||||||
| Cash and bank overdrafts at end of the period | 7,426 | 3,196 | ||||||||||
| Cash<br>and bank overdrafts at end of the period comprise: | ||||||||||||
| Cash<br>and cash equivalents | 6,465 | 3,503 | ||||||||||
| Cash<br>and cash equivalents reported in assets held for<br>sale/distribution | 1,421 | - | ||||||||||
| 7,886 | 3,503 | |||||||||||
| Overdrafts | (460) | (307) | ||||||||||
| 7,426 | 3,196 | |||||||||||
| (a) | The<br>2021 comparative results have been restated on a consistent basis<br>from those previously published to reflect the classification of<br>the Consumer Healthcare business as a discontinued operation (see<br>page 20) and the impact of Share Consolidation implemented on 18<br>July 2022 (see page 53). | |||||||||||
| --- | --- | |||||||||||
| Segment<br>information | ||||||||||||
| --- | ||||||||||||
| Operating<br>segments are reported based on the financial information provided<br>to the Chief Executive Officer and the responsibilities of the GSK<br>Leadership Team (GLT). GSK has revised its operating segments from<br>Q1 2022 and from Q2 2022. Previously, GSK reported results under<br>four segments: Pharmaceuticals; Pharmaceuticals R&D; Vaccines<br>and Consumer Healthcare. For the first quarter 2022, GSK reported<br>results under three segments: Commercial Operations; Total R&D<br>and Consumer Healthcare. From Q2 2022, GSK reports results under<br>two segments from continuing operations as the demerger of the<br>Consumer Healthcare segment was completed on 18 July 2022. Members<br>of the GLT are responsible for each segment. Comparative<br>information in this announcement has been retrospectively restated<br>on a consistent basis. The Consumer Healthcare segment is presented<br>entirely as discontinued operations and therefore no segment<br>information is presented.<br><br><br><br><br><br>R&D<br>investment is essential for the sustainability of the business.<br>However for segment reporting the Commercial operating profits<br>exclude allocations of globally funded R&D.<br><br><br><br><br><br>The<br>Total R&D segment is the responsibility of the Chief Scientific<br>Officer and President, R&D and is reported as a separate<br>segment. The operating profit of this segment includes R&D<br>activities across Specialty Medicines, including HIV and Vaccines.<br>It includes R&D and some SG&A costs relating to regulatory<br>and other functions.<br><br><br><br><br><br>The<br>Group’s management reporting process allocates intra-Group<br>profit on a product sale to the market in which that sale is<br>recorded, and the profit analyses below have been presented on that<br>basis. | ||||||||||||
| --- | ||||||||||||
| Turnover by segment | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021<br><br><br>£m | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| Commercial<br>Operations (total turnover) | 6,929 | 5,838 | 19 | 13 | ||||||||
| Operating profit by segment | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021<br><br><br>£m | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| Commercial<br>Operations | 3,304 | 2,869 | 15 | 6 | ||||||||
| Research<br>and Development | (1,152) | (1,119) | 3 | (2) | ||||||||
| Segment<br>profit | 2,152 | 1,750 | 23 | 10 | ||||||||
| Corporate<br>and other unallocated costs | (144) | (109) | ||||||||||
| Adjusted<br>operating profit | 2,008 | 1,641 | 22 | 7 | ||||||||
| Adjusting<br>items | (927) | (366) | ||||||||||
| Total<br>operating profit | 1,081 | 1,275 | (15) | (35) | ||||||||
| Finance<br>income | 21 | 4 | ||||||||||
| Finance<br>costs | (204) | (189) | ||||||||||
| Loss on<br>disposal of interests in associates | - | (36) | ||||||||||
| Share<br>of after tax (losses)/profits of<br><br><br>associates<br>and joint ventures | (2) | 16 | ||||||||||
| Profit<br>before taxation from continuing operations | 896 | 1,070 | (16) | (40) | ||||||||
| Adjusting items reconciling Q2 2022 and H1 2022 segment profit and<br>operating profit comprise items not specifically allocated to<br>segment profit. These include impairment and amortisation of<br>intangible assets; major restructuring costs, which include<br>impairments of tangible assets and computer software;<br>transaction-related adjustments related to significant<br>acquisitions; proceeds and costs of disposals of associates,<br>products and businesses, significant legal charges and expenses on<br>the settlement of litigation and government investigations, other<br>operating income other than royalty income and other<br>items. | ||||||||||||
| --- | ||||||||||||
| Turnover by segment | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| Commercial<br>Operations (total turnover) | 14,119 | 10,993 | 28 | 25 | ||||||||
| Operating profit by segment | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | Growth<br><br><br>£% | Growth<br><br><br>CER% | |||||||||
| Commercial<br>Operations | 6,421 | 5,312 | 21 | 16 | ||||||||
| Research<br>and Development | (2,247) | (2,148) | 5 | 2 | ||||||||
| Segment<br>profit | 4,174 | 3,164 | 32 | 26 | ||||||||
| Corporate<br>and other unallocated costs | (223) | (198) | ||||||||||
| Adjusted<br>operating profit | 3,951 | 2,966 | 33 | 26 | ||||||||
| Adjusting<br>items | (577) | (481) | ||||||||||
| Total<br>operating profit | 3,374 | 2,485 | 36 | 26 | ||||||||
| Finance<br>income | 28 | 10 | ||||||||||
| Finance<br>costs | (409) | (387) | ||||||||||
| Loss on<br>disposal of interests in associates | - | (36) | ||||||||||
| Share<br>of after tax (losses)/profits of<br><br><br>associates<br>and joint ventures | (3) | 32 | ||||||||||
| Profit<br>before taxation from continuing operations | 2,990 | 2,104 | 42 | 32 | ||||||||
| Legal<br>matters<br><br><br><br><br><br>The<br>Group is involved in significant legal and administrative<br>proceedings, principally product liability, intellectual property,<br>tax, anti-trust, consumer fraud and governmental investigations,<br>which are more fully described in the ‘Legal<br>Proceedings’ note in the Annual Report 2021. At 30 June 2022,<br>the Group’s aggregate provision for legal and other disputes<br>(not including tax matters described on page 27 was £0.2<br>billion (31 December 2021: £ 0.2 billion).<br><br><br><br><br><br>The<br>Group may become involved in significant legal proceedings in<br>respect of which it is not possible to meaningfully assess whether<br>the outcome will result in a probable outflow, or to quantify or<br>reliably estimate the liability, if any, that could result from<br>ultimate resolution of the proceedings. In these cases, the Group<br>would provide appropriate disclosures about such cases, but no<br>provision would be made.<br><br><br><br><br><br>The<br>ultimate liability for legal claims may vary from the amounts<br>provided and is dependent upon the outcome of litigation<br>proceedings, investigations and possible settlement negotiations.<br>The Group’s position could change over time, and, therefore,<br>there can be no assurance that any losses that result from the<br>outcome of any legal proceedings will not exceed by a material<br>amount the amount of the provisions reported in the Group’s<br>financial accounts.<br><br><br><br><br><br>There<br>have been no significant legal developments this<br>quarter. | ||||||||||||
| --- | ||||||||||||
| Additional<br>information | ||||||||||||
| --- | ||||||||||||
| Disposal group and discontinued operations accounting<br>policy<br><br><br>Disposal<br>groups are classified as held for distribution if their carrying<br>amount will be recovered principally through a distribution to<br>shareholders rather than through continuing use, they are available<br>for distribution in their present condition and the distribution is<br>considered highly probable. They are measured at the lower of their<br>carrying amount and fair value less costs to<br>distribute.<br><br><br><br><br><br>Non-current<br>assets included as part of a disposal group are not depreciated or<br>amortised while they are classified as held for distribution. The<br>assets and liabilities of a disposal group classified as held for<br>distribution are presented separately from the other assets and<br>liabilities in the balance sheet.<br><br><br><br><br><br>A<br>discontinued operation is a component of the entity that has been<br>disposed of or distributed or is classified as held for<br>distribution and that represents a separate major line of business.<br>The results of discontinued operations are presented separately in<br>the statement of profit or loss and comparatives are restated on a<br>consistent basis.<br><br><br><br><br><br>Accounting policies and basis of preparation<br><br><br>This<br>unaudited Results Announcement contains condensed financial<br>information for the three and six months ended 30 June 2022, and should be read in<br>conjunction with the Annual Report 2021, which was prepared<br>in accordance with United Kingdom adopted<br>International Financial Reporting Standards. This Results<br>Announcement has been prepared applying consistent accounting<br>policies to those applied by the Group in the Annual Report<br>2021.<br><br><br><br><br><br>The<br>Group has not identified any changes to its key sources of<br>accounting judgements or estimations of uncertainty compared with<br>those disclosed in the Annual Report 2021. | ||||||||||||
| --- | ||||||||||||
| This<br>Results Announcement does not constitute statutory accounts of the<br>Group within the meaning of sections 434(3) and 435(3) of the<br>Companies Act 2006. The full Group accounts for 2021 were published<br>in the Annual Report 2021, which has been delivered to the<br>Registrar of Companies and on which the report of the independent<br>auditor was unqualified and did not contain a statement under<br>section 498 of the Companies Act 2006.<br><br><br><br><br><br>COVID-19 pandemic<br><br><br>The<br>potential impact of the COVID-19 pandemic on GSK’s trading<br>performance and all its principal risks is continually assessed,<br>with appropriate mitigation plans put in place. GSK is encouraged<br>by the uptake in demand in the second quarter for its medicines and<br>vaccines, particularly Shingrix. The Company remains confident<br>in the underlying demand for its vaccines and medicines, given the<br>number of COVID-19 vaccinations and boosters administered<br>worldwide. The pandemic continues to be challenging to predict and<br>remains a dynamic situation with the worldwide rate of community<br>infections presently increasing due to Omicron subvariants BA.5 and<br>BA.4; these variants of concern and future variants of concern<br>could potentially impact GSK’s trading results, clinical<br>trials, supply continuity and its employees<br>materially. | ||||||||||||
| --- | ||||||||||||
| Exchange rates | ||||||||||||
| --- | ||||||||||||
| GSK<br>operates in many countries and earns revenues and incurs costs in<br>many currencies. The results of the Group, as reported in Sterling,<br>are affected by movements in exchange rates between Sterling and<br>other currencies. Average exchange rates, as modified by specific<br>transaction rates for large transactions, prevailing during the<br>period, are used to translate the results and cash flows of<br>overseas subsidiaries, associates and joint ventures into Sterling.<br>Period-end rates are used to translate the net assets of those<br>entities. The currencies which most influenced these translations<br>and the relevant exchange rates were: | ||||||||||||
| Q2 2022 | Q2<br>2021 | H1 2022 | H1<br>2021 | 2021 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Average<br>rates: | ||||||||||||
| US$/£ | 1.26 | 1.40 | 1.30 | 1.39 | 1.38 | |||||||
| Euro/£ | 1.18 | 1.16 | 1.19 | 1.15 | 1.16 | |||||||
| Yen/£ | 162 | 152 | 159 | 149 | 151 | |||||||
| Period-end<br>rates: | ||||||||||||
| US$/£ | 1.21 | 1.39 | 1.21 | 1.39 | 1.35 | |||||||
| Euro/£ | 1.16 | 1.17 | 1.16 | 1.17 | 1.19 | |||||||
| Yen/£ | 165 | 153 | 165 | 153 | 155 | |||||||
| During Q2 2022 average Sterling exchange rates were stronger<br>against the Yen and the Euro but weaker against the US Dollar<br>compared with the same period in 2021. Period-end Sterling exchange<br>rates were stronger against the Yen but weaker against the US<br>Dollar and the Euro compared with the 2021 period-end<br>rates. | ||||||||||||
| --- | ||||||||||||
| Net assets | ||||||||||||
| --- | ||||||||||||
| The<br>book value of net assets increased by £1,298 million from<br>£21,342 million at 31 December 2021 to £22,640 million at<br>30 June 2022. This primarily reflected the Total profit for the<br>period and the re-measurement gains on the defined benefit plans.<br>These increases were partially offset by a decrease in fair value<br>of Other investments and by dividends paid during the<br>period.<br><br><br><br><br><br>The<br>carrying value of investments in associates and joint ventures at<br>30 June 2022 was £77 million (31 December 2021: £88<br>million), with a market value of £77 million (31 December<br>2021: £88 million).<br><br><br><br><br><br>At 30<br>June 2022, the net deficit on the Group’s pension plans was<br>£651 million compared with £1,129 million at 31 December<br>2021. This decrease in the net deficit is primarily related to<br>increases in the long term UK discount rate (3.9% Q2 2022, 2.0% Q4<br>2021), the US discount rate (4.7% Q2 2022, 2.7% Q4 2021) and<br>Euro-zone discount rates (3.4% Q2 2022, 1.3% Q4 2021), partially<br>offset by increases in the US cash balance credit rate (3.0% Q2<br>2022; 2.0% Q4 2021), Euro-zone inflation rates (2.2% Q2 2022; 2.1%<br>Q4 2021) and, lower UK and Euro-zone asset values. The net deficit<br>balance at 30 June 2022 excludes £25 million relating to the<br>discontinued Consumer Healthcare business.<br><br><br><br><br><br>The<br>estimated present value of the potential redemption amount of the<br>Pfizer put option related to ViiV Healthcare, recorded in Other<br>payables in Current liabilities, was £1,158 million (31<br>December 2021: £1,008 million).<br><br><br><br><br><br>Contingent<br>consideration amounted to £6,360 million at 30 June 2022 (31<br>December 2021: £6,076 million), of which £5,797 million<br>(31 December 2021: £5,559 million) represented the estimated<br>present value of amounts payable to Shionogi relating to ViiV<br>Healthcare and £546 million (31 December 2021: £479<br>million) represented the estimated present value of contingent<br>consideration payable to Novartis related to the Vaccines<br>acquisition.<br><br><br><br><br><br>Of the<br>contingent consideration payable (on a post-tax basis) to Shionogi<br>at 30 June 2022, £857 million (31 December 2021: £937<br>million) is expected to be paid within one year. | ||||||||||||
| Movements in contingent consideration are as follows: | ||||||||||||
| --- | ||||||||||||
| H1<br>2022 | ViiV<br><br><br>Healthcare<br><br><br>£m | Group<br><br><br>£m | ||||||||||
| --- | --- | --- | ||||||||||
| Contingent<br>consideration at beginning of the period | 5,559 | 6,076 | ||||||||||
| Re-measurement<br>through income statement | 841 | 899 | ||||||||||
| Cash<br>payments: operating cash flows | (534) | (542) | ||||||||||
| Cash<br>payments: investing activities | (69) | (73) | ||||||||||
| Contingent<br>consideration at end of the period | 5,797 | 6,360 | ||||||||||
| H1 2021 | ViiV<br><br><br>Healthcare<br><br><br>£m | Group<br><br><br>£m | ||||||||||
| --- | --- | --- | ||||||||||
| Contingent<br>consideration at beginning of the period | 5,359 | 5,869 | ||||||||||
| Re-measurement<br>through income statement | 259 | 317 | ||||||||||
| Cash<br>payments: operating cash flows | (366) | (371) | ||||||||||
| Cash<br>payments: investing activities | (53) | (55) | ||||||||||
| Contingent<br>consideration at end of the period | 5,199 | 5,760 | ||||||||||
| Contingent liabilities | ||||||||||||
| --- | ||||||||||||
| There<br>were contingent liabilities at 30 June 2022 in respect of<br>guarantees and indemnities entered into as part of the ordinary<br>course of the Group’s business. No material losses are<br>expected to arise from such contingent liabilities. Provision is<br>made for the outcome of legal and tax disputes where it is both<br>probable that the Group will suffer an outflow of funds and it is<br>possible to make a reliable estimate of that outflow. Descriptions<br>of the significant legal disputes to which the Group is a party are<br>set out on page 49. | ||||||||||||
| Discontinued operations | ||||||||||||
| --- | ||||||||||||
| Consumer<br>Healthcare has been presented as a discontinued operation at the<br>end of Q2 2022. The demerger of Haleon was completed on 18 July.<br>Financial information relating to the operations of Consumer<br>Healthcare for the period is set out below. The Group Income<br>Statement and Group Cash Flow Statement distinguish discontinued<br>operations from continuing operations. Comparative figures have<br>been restated on a consistent basis.<br><br><br><br><br><br>This<br>financial information differs both in purpose and basis of<br>preparation from the Historical Financial Information and the<br>Interim Financial Information included in the Haleon prospectus and<br>from that which will be published by Haleon plc on 19 September<br>2022. As a result, whilst the two sets of financial information are<br>similar, they are not the same because of certain differences in<br>accounting and disclosure under IFRS. | ||||||||||||
| --- | ||||||||||||
| Total<br>Results | H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | ||||||||||
| --- | --- | --- | ||||||||||
| Turnover | 5,115 | 4,517 | ||||||||||
| Expenses | (4,271) | (3,633) | ||||||||||
| Profit<br>before tax | 844 | 884 | ||||||||||
| Taxation | (219) | (236) | ||||||||||
| Tax<br>rate% | 25.9% | 26.7% | ||||||||||
| Profit<br>after Tax from discontinued operations | 625 | 648 | ||||||||||
| Non-controlling<br>interest in discontinued operations | 187 | 193 | ||||||||||
| Earnings<br>attributable to shareholders from discontinued<br>operations | 438 | 455 | ||||||||||
| Earnings<br>per share from discontinued operations | 10.9p | 11.4p | ||||||||||
| Q2 2022<br><br><br>£m | Q2<br>2021<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| Turnover | 2,525 | 2,254 | ||||||||||
| Expenses | (2,185) | (1,854) | ||||||||||
| Profit<br>before tax | 340 | 400 | ||||||||||
| Taxation | (111) | (133) | ||||||||||
| Tax<br>rate% | 32.6% | 33.4% | ||||||||||
| Profit<br>after Tax from discontinued operations | 229 | 267 | ||||||||||
| Non-controlling<br>interest in discontinued operations | 97 | 86 | ||||||||||
| Earnings<br>attributable to shareholders from discontinued<br>operations | 132 | 181 | ||||||||||
| Earnings<br>per share from discontinued operations | 3.3p | 4.5p | ||||||||||
| Assets and liabilities held for sale/distribution | ||||||||||||
| --- | ||||||||||||
| Haleon<br>has been presented as a disposal group at the end of Q2 2022.<br>Non-current assets and disposal groups are transferred to Assets<br>held for sale/distribution when it is expected that their carrying<br>amounts will be recovered principally through disposal or a<br>distribution, they are available for sale/distribution in their<br>present condition and sale/distribution is considered highly<br>probable. They are held at the lower of carrying amount and fair<br>value less costs to sell/distribute. No impairment was recorded as<br>fair value was in excess of carrying value. | ||||||||||||
| --- | ||||||||||||
| Assets held for sale/distribution | 30 June 2022<br><br><br>Haleon<br><br><br>£m | 30 June 2022<br><br><br>Other<br><br><br>£m | 30 June 2022<br><br><br>Total<br><br><br>£m | 31<br>December 2021<br><br><br>Total<br><br><br>£m | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| Property,<br>plant and equipment | 1,649 | 104 | 1,753 | 22 | ||||||||
| Goodwill | 5,207 | - | 5,207 | - | ||||||||
| Other<br>intangibles | 19,951 | 6 | 19,957 | - | ||||||||
| Inventories | 1,775 | - | 1,775 | - | ||||||||
| Trade<br>and other receivables | 1,955 | - | 1,955 | - | ||||||||
| Short<br>term loans to third parties | 2,948 | - | 2,948 | - | ||||||||
| Cash<br>and cash equivalents | 1,421 | - | 1,421 | - | ||||||||
| Other | 987 | 14 | 1,001 | - | ||||||||
| Total<br>assets held for sale/distribution | 35,893 | 124 | 36,017 | 22 | ||||||||
| Liabilities held for distribution | 30 June 2022<br><br><br>Haleon<br><br><br>£m | 31<br>December 2021<br><br><br>Total<br><br><br>£m | ||||||||||
| --- | --- | --- | ||||||||||
| Borrowings | (10,248) | - | ||||||||||
| Trade<br>payables and other liabilities | (3,880) | - | ||||||||||
| Deferred<br>tax liability | (3,722) | - | ||||||||||
| Total<br>liabilities held for distribution | (17,850) | - | ||||||||||
| Post balance sheet events: | ||||||||||||
| --- | ||||||||||||
| Business acquisitions | ||||||||||||
| --- | ||||||||||||
| On 1 July 2022, GSK completed the acquisition of 100% of Sierra<br>Oncology, Inc. a California-based, late-stage biopharmaceutical<br>company focused on targeted therapies for the treatment of rare<br>forms of cancer, for $1.9 billion (£1.6 billion). The main<br>asset is momelotinib which targets the medical needs of<br>myelofibrosis patients with anaemia. The initial acquisition<br>accounting will be reflected in the third quarter of<br>2022, and it is not completed<br>at this date.<br><br><br><br><br><br>On 31<br>May 2022, GSK announced that it has entered into a definitive<br>agreement to acquire 100% of Affinivax, Inc. (Affinivax), a<br>clinical-stage biopharmaceutical company based in Cambridge,<br>Boston, Massachusetts focused on pneumococcal vaccine candidates.<br>Under the terms of the<br>agreement, GSK will acquire 100% of the outstanding shares of<br>Affinivax. The consideration for the acquisition comprises an<br>upfront payment of $2.1 billion (£1.7 billion)<br>to be paid upon closing and<br>two potential milestone payments of $0.6 billion (£0.5<br>billion) to be paid upon<br>the achievement of certain paediatric clinical development<br>milestones. The transaction is subject to customary closing<br>conditions, including the expiration or early termination of the<br>waiting period under the Hart-Scott-Rodino Anti-Trust Improvements<br>Act of 1976. The transaction is expected to close in the third<br>quarter of 2022.<br><br><br><br><br><br>Divestments<br><br><br>On 18 July 2022, GSK plc separated its Consumer Healthcare business<br>from the GSK Group to form Haleon, an independent listed company.<br>The separation was effected by way of a demerger of 80.1% of<br>GSK’s 68% holding in the Consumer Healthcare business to GSK<br>shareholders. Following the demerger, 54.5% of Haleon is held in<br>aggregate by GSK Shareholders, 6.0% is held by GSK (including<br>shares received by GSK’s consolidated ESOT trusts) and 7.5%<br>is held by certain Scottish limited partnerships (SLPs) set up to<br>provide a funding mechanism pursuant to which GSK will provide<br>additional funding for GSK’s UK Pension Schemes. The<br>aggregate ownership by GSK (including ownership by the ESOT trusts<br>and SLPs) after the demerger of 13.5% will be initially measured at<br>fair value with changes through profit or loss. Pfizer continues to<br>hold 32% of Haleon after the demerger.<br><br><br><br><br><br>Under IFRIC 17 ‘Distributions of<br>Non-cash Assets to Owners’ a liability and an equity distribution<br>are measured at the fair value of the assets to be distributed when<br>the dividend is appropriately authorised and it is no longer at the<br>entity’s discretion. The liability and equity movement, and<br>associated gain, will be recognised in Q3 2022 when the demerger<br>distribution was authorised and occurred.<br><br><br><br><br><br>The asset distributed was the 54.5% ownership of the Consumer<br>Healthcare business. The net carrying value of the Consumer<br>Healthcare business, including the retained 13.5% and net of the<br>amount attributable to the non-controlling interest, was<br>approximately £11.5 billion at the end of June. The assets<br>distributed were reduced by Consumer Healthcare transactions up to<br>18 July that included pre-separation dividends declared and settled<br>after the end of Q2 2022 and before 18 July 2022. Those dividends<br>included: £10.4 billion (£7.1 billion attributable to<br>GSK) of dividends funded by Consumer Healthcare debt that was<br>partially on-lent during Q1 2022 and dividends of £0.6 billion<br>(£0.4 billion attributable to GSK) from available cash<br>balances. GSK’s share of the pre-separation dividends and<br>loans are eliminated in the consolidated financial<br>statements.<br><br><br><br><br><br>The fair value of the 54.5% ownership of the Consumer Healthcare<br>business distributed was £15.5 billion. This was measured by<br>reference to the quoted average Haleon share price over the first<br>five days of trading, this being a fair value measured with<br>observable inputs which is considered to be representative of the<br>fair value at the distribution date. A gain on distribution of this<br>fair value less 54.5% of the book value of the net assets of the<br>Consumer Healthcare business will be recorded in the Income<br>Statement in Q3 2022. There will be an additional gain to remeasure<br>the retained 13.5% from its book value to fair value of £3.9<br>billion using the same fair value methodology as used for the<br>distributed shares. In addition, there will be a reclassification<br>of the Group’s share of cumulative exchange differences<br>arising on translation of the foreign currency net assets of the<br>divested subsidiaries and offsetting net investment hedges from<br>Retained Earnings into the Income Statement. All these transactions<br>will be presented in profit from discontinued operations (adjusting<br>results) in Q3 2022.<br><br><br><br><br><br>Share Consolidation<br><br><br>Following<br>completion of the Consumer Healthcare business demerger on 18 July<br>2022, GSK plc Ordinary shares were consolidated to maintain share<br>price comparability before and after demerger. The consolidation<br>was approved by GSK shareholders at a General Meeting held on 6<br>July 2022. Shareholders received 4 new Ordinary shares with a<br>nominal value of 31¼ pence each for every 5 existing Ordinary<br>share which had a nominal value of 25 pence each. Earnings per<br>share, diluted earnings per share, adjusted earnings per share and<br>dividends per share were retrospectively adjusted to reflect the<br>Share Consolidation in all the periods presented. | ||||||||||||
| Related party transactions | ||||||||||||
| --- | ||||||||||||
| Details of GSK’s related party transactions are disclosed on<br>page 221 of our 2021 Annual Report and Accounts. | ||||||||||||
| Financial instruments fair value disclosures | ||||||||||||
| --- | ||||||||||||
| The following tables categorise the Group’s financial assets<br>and liabilities held at fair value by the valuation methodology<br>applied in determining their fair value. Where possible, quoted<br>prices in active markets are used (Level 1). Where such prices are<br>not available, the asset or liability is classified as Level 2,<br>provided all significant inputs to the valuation model used are<br>based on observable market data. If one or more of the significant<br>inputs to the valuation model is not based on observable market<br>data, the instrument is classified as Level 3. Other investments<br>classified as Level 3 in the tables below comprise equity<br>investments in unlisted entities with which the Group has entered<br>into research collaborations and also investments in emerging life<br>science companies. | ||||||||||||
| At 30 June 2022 | Level 1<br><br><br>£m | Level 2<br><br><br>£m | Level 3<br><br><br>£m | Total<br><br><br>£m | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| Financial assets at fair value | ||||||||||||
| Financial<br>assets at fair value through other comprehensive income<br>(FVTOCI): | ||||||||||||
| Other investments designated at FVTOCI | 1,183 | - | 208 | 1,391 | ||||||||
| Trade and other receivables | - | 2,119 | - | 2,119 | ||||||||
| Financial<br>assets mandatorily at fair value through profit or loss<br>(FVTPL): | ||||||||||||
| Other investments | - | - | 260 | 260 | ||||||||
| Other non-current assets | - | - | 25 | 25 | ||||||||
| Trade and other receivables | - | 55 | - | 55 | ||||||||
| Held for trading derivatives that are not in<br>a<br><br><br>designated and effective hedging<br>relationship | - | 102 | 11 | 113 | ||||||||
| Cash and cash equivalents | 5,230 | - | - | 5,230 | ||||||||
| Derivatives designated and effective as hedging<br><br><br>instruments (FVTOCI) | - | 3 | - | 3 | ||||||||
| Financial assets classified as assets held<br><br><br>for distribution | 424 | 160 | - | 584 | ||||||||
| 6,837 | 2,439 | 504 | 9,780 | |||||||||
| Financial liabilities at fair value | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Financial<br>liabilities mandatorily at fair value through profit or loss<br>(FVTPL): | ||||||||||||
| Contingent consideration liabilities | - | - | (6,360) | (6,360) | ||||||||
| Held for trading derivatives that are not in<br>a<br><br><br>designated and effective hedging<br>relationship | - | (41) | (1) | (42) | ||||||||
| Derivatives designated and effective as hedging<br><br><br>instruments (FVTOCI) | - | (29) | - | (29) | ||||||||
| Financial liabilities classified as liabilities held<br><br><br>for distribution | - | (57) | - | (57) | ||||||||
| - | (127) | (6,361) | (6,488) | |||||||||
| At 31 December 2021 | Level 1<br><br><br>£m | Level 2<br><br><br>£m | Level 3<br><br><br>£m | Total<br><br><br>£m | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| Financial assets at fair value | ||||||||||||
| Financial<br>assets at fair value through other comprehensive income<br>(FVTOCI): | ||||||||||||
| Other investments designated at FVTOCI | 1,736 | - | 191 | 1,927 | ||||||||
| Trade and other receivables | - | 1,943 | - | 1,943 | ||||||||
| Financial<br>assets mandatorily at fair value through profit or loss<br>(FVTPL): | ||||||||||||
| Other investments | - | - | 199 | 199 | ||||||||
| Other non-current assets | - | - | 23 | 23 | ||||||||
| Trade and other receivables | - | 59 | - | 59 | ||||||||
| Held for trading derivatives that are not in<br>a<br><br><br>designated and effective hedging<br>relationship | - | 77 | 6 | 83 | ||||||||
| Cash and cash equivalents | 1,449 | - | - | 1,449 | ||||||||
| Derivatives designated and effective as hedging<br><br><br>instruments (FVTOCI) | - | 123 | - | 123 | ||||||||
| 3,185 | 2,202 | 419 | 5,806 | |||||||||
| Financial liabilities at fair value | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Financial<br>liabilities mandatorily at fair value through profit or loss<br>(FVTPL): | ||||||||||||
| Contingent consideration liabilities | - | - | (6,076) | (6,076) | ||||||||
| Held for trading derivatives that are not in<br>a<br><br><br>designated and effective hedging relationship | - | (171) | - | (171) | ||||||||
| Derivatives designated and effective as hedging<br><br><br>instruments (FVTOCI) | - | (57) | - | (57) | ||||||||
| - | (228) | (6,076) | (6,304) | |||||||||
| Movements in the six months to 30 June 2022 and the six months to<br>30 June 2021 for financial instruments measured using Level 3<br>valuation methods are presented below: | ||||||||||||
| --- | ||||||||||||
| Financial<br><br><br>assets<br><br><br>£m | Financial<br><br><br>liabilities<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| At 1 January 2022 | 419 | (6,076) | ||||||||||
| Gains/(losses) recognised in the income statement | (7) | (900) | ||||||||||
| Gains recognised in other comprehensive income | 32 | - | ||||||||||
| Additions | 60 | - | ||||||||||
| Disposals | - | - | ||||||||||
| Transfer from Level 3 | - | - | ||||||||||
| Payments in the period | - | 615 | ||||||||||
| At 30 June 2022 | 504 | (6,361) | ||||||||||
| At 1 January 2021 | 814 | (5,878) | ||||||||||
| --- | --- | --- | ||||||||||
| Gains/(losses) recognised in the income statement | 47 | (313) | ||||||||||
| Gains recognised in other comprehensive income | 90 | - | ||||||||||
| Additions | 51 | - | ||||||||||
| Disposals | (10) | - | ||||||||||
| Transfer from Level 3 | (595) | - | ||||||||||
| Payments in the period | - | 426 | ||||||||||
| At 30 June 2021 | 397 | (5,765) | ||||||||||
| Net losses of £907 million (H1 2021: net losses of £267<br>million) reported in other operating income were attributable to<br>Level 3 financial instruments held at the end of the period. There<br>were no transfers from Level 3 as a result of listing of equity<br>investments on a recognised stock exchange during the period. In H1<br>2021, net gains of £99m arose prior to transfer from Level 3<br>on equity investments which transferred to a Level 1 valuation<br>methodology as a result of such listings. Net gains and losses<br>include the impact of exchange movements.<br><br><br><br><br><br>Financial liabilities measured using Level 3 valuation methods at<br>30 June included £5,797 million (H1 2021: £5,199 million)<br>of contingent consideration for the acquisition in 2012 of the<br>former Shionogi-ViiV Healthcare joint venture and £546 million<br>(H1 2021: £504 million) of contingent consideration for the<br>acquisition of the Novartis Vaccines business in 2015. Contingent<br>consideration is expected to be paid over a number of years and<br>will vary in line with the future performance of specified<br>products, the achievement of certain milestone targets and<br>movements in certain foreign currencies. The financial liabilities<br>are measured at the present value of expected future cash flows,<br>the most significant inputs to the valuation models being future<br>sales forecasts, the discount rate, the Sterling/US Dollar exchange<br>rate and the Sterling/Euro exchange rate. | ||||||||||||
| --- | ||||||||||||
| The table below shows, on an indicative basis, the income statement<br>and balance sheet sensitivity to reasonably possible changes in key<br>inputs to the valuation of the largest contingent consideration<br>liabilities. | ||||||||||||
| --- | ||||||||||||
| Shionogi-<br><br><br>ViiV Healthcare<br><br><br>£m | Novartis<br><br><br>Vaccines<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| Increase/(decrease) in financial liability | ||||||||||||
| 10% increase in sales forecasts | 571 | 64 | ||||||||||
| 10% decrease in sales forecasts | (571) | (62) | ||||||||||
| 1% (100 basis points) increase in discount rate | (211) | (40) | ||||||||||
| 1% (100 basis points) decrease in discount rate | 227 | 47 | ||||||||||
| 10 cent appreciation of US Dollar | 397 | 7 | ||||||||||
| 10 cent depreciation of US Dollar | (338) | (5) | ||||||||||
| 10 cent appreciation of Euro | 103 | 20 | ||||||||||
| 10 cent depreciation of Euro | (86) | (17) | ||||||||||
| The Group transfers financial instruments between different levels<br>in the fair value hierarchy when, as a result of an event or change<br>in circumstances, the valuation methodology applied in determining<br>their fair values alters in such a way that it meets the definition<br>of a different level. There were no transfers between the Level 1<br>and Level 2 fair value measurement categories. Transfers from Level<br>3 during H1 2021 relate to equity investments in companies which<br>were listed on stock exchanges during the period. | ||||||||||||
| --- | ||||||||||||
| The following methods and assumptions were used to measure the fair<br>value of the significant financial instruments carried at fair<br>value on the balance sheet: | ||||||||||||
| --- | --- | |||||||||||
| ● | Other<br>investments – equity investments traded in an active market<br>determined by reference to the relevant stock exchange quoted bid<br>price; other equity investments determined by reference to the<br>current market value of similar instruments, recent financing<br>rounds or the discounted cash flows of the underlying net<br>assets | |||||||||||
| ● | Trade<br>receivables carried at fair value – based on invoiced<br>amount | |||||||||||
| ● | Interest<br>rate swaps, foreign exchange forward contracts, swaps and options<br>– based on the present value of contractual cash flows or<br>option valuation models using market-sourced data (exchange rates<br>or interest rates) at the balance sheet date | |||||||||||
| ● | Cash<br>and cash equivalents carried at fair value – based on net<br>asset value of the funds | |||||||||||
| ● | Contingent consideration for business acquisitions and divestments<br>– based on present values of expected future cash<br>flows | |||||||||||
| There are no material differences between the carrying value of the<br>Group's other financial assets and liabilities and their estimated<br>fair values, with the exception of bonds, for which the carrying<br>values and fair values are set out in the table below: | ||||||||||||
| --- | ||||||||||||
| 30 June 2022 | 31 December 2021 | |||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Carrying<br><br><br>value<br><br><br>£m | Fair<br><br><br>value<br><br><br>£m | Carrying<br><br><br>value<br><br><br>£m | Fair<br><br><br>value<br><br><br>£m | |||||||||
| Bonds in a designated hedging relationship | (5,096) | (5,008) | (4,982) | (5,311) | ||||||||
| Other bonds | (15,830) | (16,688) | (17,373) | (20,746) | ||||||||
| Bonds classified as liabilities held for distribution | (9,823) | (9,341) | - | - | ||||||||
| (30,749) | (31,037) | (22,355) | (26,057) | |||||||||
| The following methods and assumptions are used to estimate the fair<br>values of financial assets and liabilities which are not measured<br>at fair value on the balance sheet: | ||||||||||||
| --- | --- | |||||||||||
| ● | Receivables<br>and payables, including put options, carried at amortised cost<br>– approximates to the carrying amount | |||||||||||
| ● | Liquid<br>investments – approximates to the carrying<br>amount | |||||||||||
| ● | Cash<br>and cash equivalents carried at amortised cost – approximates<br>to the carrying amount | |||||||||||
| ● | Short-term<br>loans, overdrafts and commercial paper – approximates to the<br>carrying amount because of the short maturity of these<br>instruments | |||||||||||
| ● | Long-term<br>loans – based on quoted market prices (a Level 1 fair value<br>measurement) in the case of European and US Medium Term Notes;<br>approximates to the carrying amount in the case of other<br>fixed rate borrowings and floating rate bank loans | |||||||||||
| Put option<br><br><br>Other<br>payables in Current liabilities includes the present value of the<br>expected redemption amount of the Pfizer put option over its<br>non-controlling interest in ViiV Healthcare of £1,158 million.<br>This reflects a number of assumptions around future sales, profit<br>forecasts and forecast exchange rates. The forecast exchange rates<br>used are consistent with market rates at 30 June 2022.<br><br><br><br><br><br>The table below shows on an indicative basis the income statement<br>and balance sheet sensitivity to reasonably possible changes in the<br>key inputs to the measurement of this liability. | ||||||||||||
| --- | ||||||||||||
| Increase/(decrease) in financial liability | ViiV<br><br><br>Healthcare<br><br><br>put<br>option<br><br><br>£m | |||||||||||
| --- | --- | |||||||||||
| 10%<br>increase in sales forecasts | 107 | |||||||||||
| 10%<br>decrease in sales forecasts | (107) | |||||||||||
| 1% (100<br>basis points) increase in discount rate | (38) | |||||||||||
| 1% (100<br>basis points) decrease in discount rate | 42 | |||||||||||
| 10 cent appreciation of US Dollar | 73 | |||||||||||
| 10 cent depreciation of US Dollar | (61) | |||||||||||
| 10 cent appreciation of Euro | 32 | |||||||||||
| 10 cent depreciation of Euro | (27) | |||||||||||
| Reconciliation of cash<br>flow to movements in net debt | ||||||||||||
| --- | ||||||||||||
| H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | |||||||||||
| --- | --- | --- | ||||||||||
| Total<br>Net debt at beginning of the period | (19,838) | (20,780) | ||||||||||
| Increase/(decrease)<br>in cash and bank overdrafts | 3,526 | (2,031) | ||||||||||
| Increase/(decrease)<br>in liquid investments and short-term loans to third<br>parties | 2,948 | (18) | ||||||||||
| Net<br>decrease in short-term loans | 3,073 | 352 | ||||||||||
| Net<br>increase in long-term loans | (9,232) | - | ||||||||||
| Repayment<br>of lease liabilities | 116 | 108 | ||||||||||
| Exchange<br>adjustments | (1,999) | 525 | ||||||||||
| Other<br>non-cash movements | (52) | (77) | ||||||||||
| Increase<br>in net debt | (1,620) | (1,141) | ||||||||||
| Total<br>Net debt at end of the period | (21,458) | (21,921) | ||||||||||
| Net debt<br>analysis | ||||||||||||
| --- | ||||||||||||
| 30 June 2022<br><br><br>£m | 30 June<br>2021<br><br><br>£m | 31<br>December<br><br><br>2021<br><br><br>£m | ||||||||||
| --- | --- | --- | --- | |||||||||
| Liquid<br>investments | 67 | 59 | 61 | |||||||||
| Cash<br>and cash equivalents | 6,465 | 3,503 | 4,274 | |||||||||
| Short-term<br>borrowings | (3,327) | (5,041) | (3,601) | |||||||||
| Long-term<br>borrowings | (18,784) | (20,442) | (20,572) | |||||||||
| Short-term<br>loans to third parties held for distribution | 2,948 | - | - | |||||||||
| Cash<br>and cash equivalents held for distribution | 1,421 | - | - | |||||||||
| Borrowings<br>held for distribution | (10,248) | - | - | |||||||||
| Total<br>Net debt at the end of the period | (21,458) | (21,921) | (19,838) | |||||||||
| Free cash flow<br>reconciliation from continuing operations | ||||||||||||
| --- | ||||||||||||
| Q2 2022<br><br><br>£m | H1 2022<br><br><br>£m | H1<br>2021<br><br><br>£m | ||||||||||
| --- | --- | --- | --- | |||||||||
| Net<br>cash inflow from continuing operating activities | 1,196 | 3,402 | 1,217 | |||||||||
| Purchase<br>of property, plant and equipment | (237) | (430) | (352) | |||||||||
| Proceeds<br>from sale of property, plant and equipment | - | 6 | 95 | |||||||||
| Purchase<br>of intangible assets | (220) | (597) | (556) | |||||||||
| Proceeds<br>from disposals of intangible assets | 8 | 13 | 314 | |||||||||
| Net<br>finance costs | (337) | (411) | (421) | |||||||||
| Dividends<br>from joint ventures and associates | - | - | 9 | |||||||||
| Contingent<br>consideration paid (reported in investing activities) | (47) | (73) | (55) | |||||||||
| Distributions<br>to non-controlling interests | (99) | (177) | (121) | |||||||||
| Contributions<br>from non-controlling interests | - | 8 | 7 | |||||||||
| Free<br>cash inflow from continuing operations | 264 | 1,741 | 137 | |||||||||
| R&D<br>commentary | ||||||||||||
| --- | ||||||||||||
| Pipeline overview | ||||||||||||
| --- | ||||||||||||
| Medicines<br>and vaccines in phase III development (including major lifecycle<br>innovation or under regulatory review) | 21 | Infectious Diseases (10) | ||||||||||
| --- | --- | --- | --- | |||||||||
| ● | Bexsero infants vaccine (US) | |||||||||||
| ● | COVID-19<br>(Medicago) vaccine candidate | |||||||||||
| ● | COVID-19<br>(Sanofi) vaccine candidate | |||||||||||
| ● | COVID-19<br>(SK Bioscience) vaccine candidate | |||||||||||
| ● | MenABCWY<br>(1st gen) vaccine candidate | |||||||||||
| ● | Menveo liquid vaccine | |||||||||||
| ● | Rotarix liquid (US) vaccine | |||||||||||
| ● | RSV<br>older adult vaccine candidate | |||||||||||
| ● | gepotidacin<br>(bacterial topoisomerase inhibitor) uUTI and GC | |||||||||||
| ● | Xevudy (sotrovimab/VIR-7831) COVID-19 | |||||||||||
| Oncology (5) | ||||||||||||
| ● | Blenrep (anti-BCMA ADC) multiple myeloma | |||||||||||
| ● | Jemperli (anti-PD-1) 1L endometrial cancer | |||||||||||
| ● | Zejula (PARP inhibitor) 1L ovarian, lung and breast<br>cancer | |||||||||||
| ● | letetresgene-autoleucel<br>(NY-ESO-1 TCR) synovial<br><br><br>sarcoma/myxoid/round<br>cell liposarcoma | |||||||||||
| ● | momelotinib<br>(JAK1/2 and ACVR1/ALK2 inhibitor) myelofibrosis with<br>anaemia | |||||||||||
| Immunology (4) | ||||||||||||
| ● | latozinemab<br>(AL001, anti-sortilin) frontotemporal dementia | |||||||||||
| ● | depemokimab<br>(long acting anti-IL5) asthma, eosinophilic granulomatosis with<br>polyangiitis, chronic rhinosinusitis with nasal polyps | |||||||||||
| ● | Nucala chronic obstructive pulmonary disease | |||||||||||
| ● | otilimab<br>(anti-GM-CSF) rheumatoid arthritis | |||||||||||
| Opportunity driven (2) | ||||||||||||
| ● | daprodustat<br>(HIF-PHI) anaemia of chronic kidney disease | |||||||||||
| ● | linerixibat<br>(IBATi) cholestatic pruritus in primary biliary<br>cholangitis | |||||||||||
| Total<br>vaccines and medicines in all phases of clinical<br>development | 68 | |||||||||||
| Total<br>projects in clinical development (inclusive of all phases and<br>indications) | 86 | |||||||||||
| Our key growth assets by<br>therapy area | ||||||||||||
| --- | ||||||||||||
| The following outlines several key vaccines and medicines by<br>therapy area that will help drive growth for GSK to meet its<br>outlooks and ambition for 2021-2026 and beyond. | ||||||||||||
| --- | ||||||||||||
| Infectious Diseases | ||||||||||||
| --- | ||||||||||||
| bepirovirsen (HBV ASO) | ||||||||||||
| --- | ||||||||||||
| Bepirovirsen is a potential new treatment option for people with<br>chronic hepatitis B as either a monotherapy (B-Clear) or<br>combination therapy with both existing (B-Together) and novel<br>treatments to explore additional combinations in the future. In<br>June 2022, GSK announced promising interim results from the B-Clear<br>phase IIb trial showing that bepirovirsen reduced levels of<br>hepatitis B surface antigen (HBsAg) and hepatitis B virus (HBV) DNA<br>after 24 weeks’ treatment in people with chronic hepatitis B<br>(CHB). These data were presented in an oral late-breaker session at<br>the European Association for the Study of the Liver’s<br>International Liver Congress (ILC) in June 2022 in London, UK. The<br>final results from the trial will be submitted for presentation at<br>a scientific congress later this year and published in a<br>peer-reviewed journal. GSK also presented an abstract at ILC<br>showing preclinical evidence that bepirovirsen harbours intrinsic<br>immunostimulatory activity via Toll-like receptor 8 (TLR8),<br>correlating with clinical efficacy from the phase IIa<br>trial.<br><br><br><br><br><br>GSK announced that a phase III trial evaluating bepirovirsen as a<br>monotherapy treating people with CHB is anticipated to start in the<br>first half of 2023. | ||||||||||||
| --- | ||||||||||||
| Key<br>trials for bepirovirsen: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| B-Clear bepirovirsen monotherapy (chronic hepatitis B)<br><br><br><br><br><br>NCT04449029 | IIb | A multi-centre, randomised, partial-blind parallel cohort trial to<br>assess the efficacy and safety of treatment with bepirovirsen in<br>participants with chronic hepatitis B virus | Trial start:<br><br><br>Q3 2020 | Complete; interim results presented; full data anticipated H2<br>2022 | ||||||||
| B-Together bepirovirsen sequential combination therapy with<br>Peg-interferon phase II (chronic hepatitis B)<br><br><br><br><br><br>NCT04676724 | II | A multi-centre, randomised, open label trial to assess the efficacy<br>and safety of sequential treatment with bepirovirsen followed by<br>Pegylated Interferon Alpha 2a in participants with chronic<br>hepatitis B virus | Trial start:<br><br><br>Q1 2021 | Active, not recruiting | ||||||||
| bepirovirsen sequential combination therapy with targeted<br>immunotherapy (chronic hepatitis B)<br><br><br><br><br><br>NCT05276297 | II | A trial on the safety, efficacy and immune response following<br>sequential treatment with an anti-sense oligonucleotide against<br>chronic hepatitis B (CHB) and chronic hepatitis B targeted<br>immunotherapy (CHB-TI) in CHB patients receiving nucleos(t)ide<br>analogue (NA) therapy | Trial start:<br><br><br>Q2 2022 | Recruiting | ||||||||
| gepotidacin (bacterial topoisomerase inhibitor) | ||||||||||||
| --- | ||||||||||||
| First in class novel antibiotic for the treatment of uncomplicated<br>urinary tract infections (uUTI) and gonorrhoea. Interim analysis<br>for EAGLE-2 and 3 are scheduled for the second half of<br>2022. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for gepotidacin: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| EAGLE-1 (uncomplicated urogenital gonorrhoea)<br><br><br><br><br><br>NCT04010539 | III | A randomised, multi-centre, open-label trial in adolescent and<br>adult participants comparing the efficacy and safety of gepotidacin<br>to ceftriaxone plus azithromycin in the treatment of uncomplicated<br>urogenital gonorrhoea caused by Neisseria gonorrhoeae | Trial start:<br><br><br>Q4 2019 | Recruiting | ||||||||
| EAGLE-2 (females with uUTI / acute cystitis)<br><br><br><br><br><br>NCT04020341 | III | A randomised, multi-centre, parallel-group, double-blind,<br>double-dummy trial in adolescent and adult female participants<br>comparing the efficacy and safety of gepotidacin to nitrofurantoin<br>in the treatment of uncomplicated urinary tract infection (acute<br>cystitis) | Trial start:<br><br><br>Q4 2019 | Recruiting | ||||||||
| EAGLE-3 (females with uUTI / acute cystitis)<br><br><br><br><br><br>NCT04187144 | III | A randomised, multi-centre, parallel-group, double-blind,<br>double-dummy trial in adolescent and adult female participants<br>comparing the efficacy and safety of gepotidacin to nitrofurantoin<br>in the treatment of uncomplicated urinary tract infection (acute<br>cystitis) | Trial start:<br><br><br>Q2 2020 | Recruiting | ||||||||
| MenABCWY vaccine candidate | ||||||||||||
| --- | ||||||||||||
| GSK is<br>developing two MenABCWY pentavalent (5-in-1) vaccines. The first<br>generation is in late-stage development and the second generation<br>is in an earlier stage. The goal is to help protect against all<br>five major disease-causing serogroups. Phase III pivotal results<br>from the first-generation MenABCWY vaccine are anticipated in the<br>second half of this year. | ||||||||||||
| --- | ||||||||||||
| Key<br>trials for MenABCWY vaccine candidate: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| MenABCWY – 019<br><br><br><br><br><br>NCT04707391 | IIIb | A randomised, controlled, observer-blind trial to evaluate safety<br>and immunogenicity of GSK’s meningococcal ABCWY vaccine when<br>administered in healthy adolescents and adults, previously primed<br>with meningococcal ACWY vaccine | Trial start:<br><br><br>Q1 2021 | Active, not recruiting | ||||||||
| MenABCWY – V72 72<br><br><br><br><br><br>NCT04502693 | III | A randomised, controlled, observer-blind trial to demonstrate<br>effectiveness, immunogenicity, and safety of GSK's meningococcal<br>Group B and combined ABCWY vaccines when administered to healthy<br>adolescents and young adults | Trial<br>start:<br><br><br>Q3<br>2020 | Active, not recruiting | ||||||||
| RSV vaccine candidates | ||||||||||||
| --- | ||||||||||||
| In June<br>2022, GSK announced positive headline results from a pre-specified<br>efficacy interim analysis of the AReSVi 006 phase III trial for its<br>RSV older adult (OA) vaccine candidate. An Independent Data<br>Monitoring Committee reviewed the interim analysis, and the primary<br>endpoint was exceeded with no unexpected safety concerns observed.<br>Results from this phase III trial will be presented in a<br>peer-reviewed publication and at an upcoming scientific meeting.<br>The AReSVi 006 trial will continue to evaluate an annual<br>revaccination schedule and longer-term protection over multiple<br>seasons following one dose of the RSV OA vaccine<br>candidate. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for RSV older adult and maternal vaccine<br>candidates: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| RSV OA=ADJ-004<br><br><br>(Adults ≥ 60 years old)<br><br><br><br><br><br>NCT04732871 | III | A randomised, open-label, multi-country trial to evaluate the<br>immunogenicity, safety, reactogenicity and persistence of a single<br>dose of the RSVPreF3 OA investigational vaccine and different<br>revaccination schedules in adults aged 60 years and<br>above | Trial start:<br><br><br>Q1 2021 | Active, not recruiting; results anticipated to be shared in H2<br>2022 | ||||||||
| RSV OA=ADJ-006<br><br><br>(ARESVI-006; Adults ≥ 60 years old)<br><br><br><br><br><br>NCT04886596 | III | A randomised, placebo-controlled, observer-blind, multi-country<br>trial to demonstrate the efficacy of a single dose of GSK’s<br>RSVPreF3 OA investigational vaccine in adults aged 60 years and<br>above | Trial start:<br><br><br>Q2 2021 | Active, not recruiting; primary endpoint met; results anticipated<br>to be shared in H2 2022 | ||||||||
| RSV OA=ADJ-007<br><br><br>(Adults ≥ 60 years old)<br><br><br><br><br><br>NCT04841577 | III | An open-label, randomised, controlled, multi-country trial to<br>evaluate the immune response, safety and reactogenicity of RSVPreF3<br>OA investigational vaccine when co-administered with FLU-QIV<br>vaccine in adults aged 60 years and above | Trial start:<br><br><br>Q2 2021 | Complete; results anticipated to be shared in H2 2022 | ||||||||
| RSV OA=ADJ-009<br><br><br>(Adults ≥ 60 years old)<br><br><br><br><br><br>NCT05059301 | III | A randomised, double-blind, multi-country trial to evaluate<br>consistency, safety, and reactogenicity of 3 lots of RSVPreF3 OA<br>investigational vaccine administrated as a single dose in adults<br>aged 60 years and above | Trial start:<br><br><br>Q4 2021 | Active, not recruiting; primary endpoint met | ||||||||
| GRACE (pregnant women aged 18-49 years old)<br><br><br><br><br><br>NCT04605159 | III | A randomised, double-blind, placebo-controlled multi-country trial<br>to demonstrate efficacy of a single dose of unadjuvanted RSV<br>maternal vaccine, administered IM to pregnant women 18 to 49 years<br>of age, for prevention of RSV associated LRTIs in their infants up<br>to 6 months of age | Trial start:<br><br><br>Q4 2020<br><br><br><br><br><br>Trial stopped enrolment and vaccination:<br><br><br>Q1 2022 | Stopped enrolment and vaccination | ||||||||
| HIV | ||||||||||||
| --- | ||||||||||||
| cabotegravir | ||||||||||||
| --- | ||||||||||||
| In June 2022, the Ministry of Health, Labour and<br>Welfare (MHLW) in Japan approved Vocabria<br>(cabotegravir<br>injection and tablets) used in combination with Janssen<br>Pharmaceutical Companies of Johnson & Johnson’s<br>Rekambys<br>(rilpivirine<br>long-acting injectable suspension) and Edurant<br>(rilpivirine tablets<br>taken as an oral lead-in before initiating injections), the first<br>and only complete long-acting treatment for<br>HIV. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for cabotegravir: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| HPTN 083<br><br><br>(HIV uninfected cisgender men and transgender women who have sex<br>with men)<br><br><br><br><br><br>NCT02720094 | IIb/III | A double-blind safety and efficacy trial of injectable cabotegravir<br>compared to daily oral tenofovir disoproxil fumarate/emtricitabine<br>(TDF/FTC), for Pre-Exposure Prophylaxis in HIV-uninfected cisgender<br>men and transgender women who have sex with men | Trial start:<br><br><br>Q4 2016 | Active; not recruiting; primary endpoint met<br>(superiority) | ||||||||
| HPTN 084<br><br><br>(HIV uninfected women who are at high risk of acquiring<br>HIV)<br><br><br><br><br><br>NCT03164564 | III | A double-blind safety and efficacy trial of long-acting injectable<br>cabotegravir compared to daily oral TDF/FTC for Pre-Exposure<br>Prophylaxis in HIV-Uninfected women | Trial start:<br><br><br>Q4 2017 | Active; not recruiting; primary endpoint met<br>(superiority) | ||||||||
| ATLAS<br><br><br><br><br><br>NCT02951052 | III | A randomised, multi-centre, parallel-group, non-inferiority,<br>open-label trial evaluating the efficacy, safety, and tolerability<br>of switching to long-acting cabotegravir plus long-acting<br>rilpivirine from current INI- NNRTI-, or PI-based antiretroviral<br>regimen in HIV-1-infected adults who are virologically<br>suppressed | Trial start:<br><br><br>Q4 2016 | Active; not recruiting; primary endpoint met<br>(non-inferiority) | ||||||||
| ATLAS-2M<br><br><br><br><br><br>NCT03299049 | IIIb | A randomised, multi-centre, parallel-group, non-inferiority,<br>open-label trial evaluating the efficacy, safety, and tolerability<br>of long-acting cabotegravir plus long-acting rilpivirine<br>administered every 8 weeks or every 4 weeks in HIV-1-infected<br>adults who are virologically suppressed | Trial start:<br><br><br>Q4 2017 | Active; not recruiting; primary endpoint met<br>(non-inferiority) | ||||||||
| FLAIR<br><br><br><br><br><br>NCT02938520 | III | A randomised, multi-centre, parallel-group, open-label trial<br>evaluating the efficacy, safety, and tolerability of long-acting<br>intramuscular cabotegravir and rilpivirine for maintenance of<br>virologic suppression following switch from an integrase inhibitor<br>single tablet regimen in HIV-1 infected antiretroviral therapy<br>naïve adult participants | Trial<br>start:<br><br><br>Q4<br>2016 | Active; not recruiting; primary endpoint met<br>(non-inferiority) | ||||||||
| Oncology | ||||||||||||
| --- | ||||||||||||
| Blenrep<br>(belantamab mafodotin) | ||||||||||||
| --- | ||||||||||||
| Updated<br>data from the DREAMM (DRiving Excellence in Approaches to Multiple<br>Myeloma) clinical trial programme evaluating Blenrep were presented at the 2022<br>American Society of Clinical Oncology (ASCO) Annual Meeting, held<br>3-7 June in Chicago, and the European Haematology Association (EHA)<br>2022 Hybrid Congress, held 9-12 June in Vienna,<br>Austria.<br><br><br><br><br><br>At<br>ASCO, preliminary data from DREAMM-5 sub-study 3 of low-dose<br>Blenrep in combination with<br>nirogacestat in patients with relapsed/refractory multiple myeloma<br>were presented. Nirogacestat, an investigational gamma-secretase<br>inhibitor, has been shown to increase target density and reduce<br>levels of soluble BCMA. As such, the potential to enhance the<br>activity of BCMA-targeted therapies like Blenrep is under investigation.<br>Additionally, the DREAMM-6 data showcased outcomes from several<br>dose cohorts of Blenrep in<br>combination with lenalidomide and dexamethasone in patients with<br>relapsed/refractory multiple myeloma who have received one or more<br>prior lines of treatment.<br><br><br><br><br><br>At EHA,<br>data from DREAMM-9 evaluating a quadruplet combination treatment<br>regimen of Blenrep with the<br>standard of care (bortezomib, lenalidomide and dexamethasone) in<br>patients with newly diagnosed multiple myeloma who are transplant<br>ineligible was presented. Additionally, an oral presentation on<br>updated results from a supported collaborative trial evaluated the<br>safety and efficacy of Blenrep plus lenalidomide and<br>dexamethasone in transplant-ineligible patients with newly<br>diagnosed multiple myeloma.<br><br><br><br><br><br>Collectively,<br>the data from these trials will be used to help inform additional<br>studies evaluating the potential of Blenrep in multiple myeloma, including<br>the earlier line setting.<br><br><br><br><br><br>DREAMM-3<br>phase III pivotal results are anticipated in the second half of<br>this year. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for Blenrep: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| DREAMM-3 (3L/4L+ MM pts who have failed Len + PI)<br><br><br><br><br><br>NCT04162210 | III | An open-label, randomised trial to evaluate the efficacy and safety<br>of single-agent belantamab mafodotin compared to pomalidomide plus<br>low dose dexamethasone (pom/dex) in participants with<br>relapsed/refractory multiple myeloma | Trial start:<br><br><br>Q2 2020 | Recruiting | ||||||||
| DREAMM-7 (2L+ MM pts)<br><br><br><br><br><br>NCT04246047 | III | A multi-centre, open-label, randomised trial to evaluate the<br>efficacy and safety of the combination of belantamab mafodotin,<br>bortezomib, and dexamethasone (B-Vd) compared with the combination<br>of daratumumab, bortezomib and dexamethasone (D-Vd) in participants<br>with relapsed/refractory multiple myeloma | Trial start:<br><br><br>Q2 2020 | Active, not recruiting | ||||||||
| DREAMM-8 (2L+ MM pts)<br><br><br><br><br><br>NCT04484623 | III | A multi-centre, open-label, randomised trial to evaluate the<br>efficacy and safety of belantamab mafodotin in combination with<br>pomalidomide and dexamethasone (B-Pd) versus pomalidomide plus<br>bortezomib and dexamethasone (P-Vd) in participants with<br>relapsed/refractory multiple myeloma | Trial start:<br><br><br>Q4 2020 | Recruiting | ||||||||
| Jemperli<br>(dostarlimab) | ||||||||||||
| --- | ||||||||||||
| At<br>ASCO, updated data from an investigator-sponsored trial from<br>Memorial Sloan Kettering Cancer Center (MSKCC) was presented in a<br>late-breaking oral presentation. The data showed 14 consecutive clinical<br>complete responses in patients who received Jemperli<br>as a<br>first-line treatment for mismatch repair-deficient (dMMR) locally<br>advanced rectal cancer. The research was also published in<br>The New England Journal of<br>Medicine, and initial data were presented earlier this year<br>at the ASCO Gastrointestinal Cancers Symposium. GSK continues to closely collaborate with MSKCC to<br>advance this research and expand the trial for patients with rectal<br>cancer.<br><br><br><br><br><br>Also,<br>at ASCO, results from the GARNET trial Cohorts A1 and A2 in<br>advanced/recurrent dMMR/microsatellite instability-high or<br>proficient/stable endometrial cancer was presented, which will<br>inform long-term use of Jemperli in this patient population. In<br>addition, long-term outcomes from the GARNET trial Cohorts A1 and F<br>were shared, covering the efficacy and safety profile of<br>Jemperli in certain<br>patients with dMMR recurrent or advanced solid tumours, including<br>endometrial cancer.<br><br><br><br><br><br>RUBY<br>phase III pivotal results are anticipated in the second half of<br>this year. | ||||||||||||
| --- | ||||||||||||
| Key<br>trials for Jemperli: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| RUBY<br><br><br>ENGOT-EN6<br><br><br>GOG-3031 (1L Stage III or IV endometrial cancer)<br><br><br><br><br><br>NCT03981796 | III | A randomised, double-blind, multi-centre trial of dostarlimab<br>(TSR-042) plus carboplatin-paclitaxel with and without niraparib<br>maintenance versus placebo plus carboplatin-paclitaxel in patients<br>with recurrent or primary advanced endometrial cancer | Trial start:<br><br><br>Q3 2019 | Recruiting | ||||||||
| PERLA (1L metastatic non-small cell lung cancer)<br><br><br><br><br><br>NCT04581824 | II | A randomised, double-blind study to evaluate the efficacy of<br>dostarlimab plus chemotherapy versus pembrolizumab plus<br>chemotherapy in metastatic non-squamous non-small cell lung<br>cancer | Trial start:<br><br><br>Q4 2020 | Active, not recruiting | ||||||||
| momelotinib (JAK1/2 and ACVR1/ALK2 inhibitor) | ||||||||||||
| --- | ||||||||||||
| On July<br>1, GSK announced that it had completed the acquisition of Sierra<br>Oncology, Inc. (Sierra Oncology), a California-based<br>biopharmaceutical company focused on targeted therapies for the<br>treatment of rare forms of cancer. The acquisition includes<br>momelotinib, a potential new medicine with a unique dual mechanism<br>of action that may address the critical unmet medical needs of<br>myelofibrosis patients with anaemia.<br><br><br><br><br><br>The<br>full MOMENTUM phase III data were presented in an oral presentation<br>at ASCO, in addition to a poster presentation of a subset analysis<br>from the trial evaluating safety and efficacy for patients with low<br>platelet counts, which was presented as a poster. Together, these<br>data demonstrate the potential use of momelotinib in symptomatic<br>and anaemic myelofibrosis patients.<br><br><br><br><br><br>In June<br>2022, Sierra Oncology announced the regulatory submission of a New<br>Drug Application (NDA) for momelotinib with the US Food and Drug<br>Administration (FDA). A filing with the European Medicines Agency<br>(EMA) is expected in H2 2022. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for momelotinib: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| MOMENTUM (myelofibrosis)<br><br><br><br><br><br>NCT04173494 | III | A randomised, double-blind, active control phase III trial intended<br>to confirm the differentiated clinical benefits of the<br>investigational drug momelotinib (MMB) versus danazol (DAN) in<br>symptomatic and anaemic subjects who have previously received an<br>approved Janus kinase inhibitor (JAKi) therapy for myelofibrosis<br>(MF) | Trial start:<br><br><br>Q1 2020 | Active, not recruiting; primary endpoint met | ||||||||
| Zejula<br>(niraparib) | ||||||||||||
| --- | ||||||||||||
| At ASCO, GSK presented real-world analyses from four studies<br>in patients with advanced ovarian cancer, including real-world data<br>evaluating outcomes in patients with advanced ovarian cancer who<br>receive poly (ADP-ribose) polymerase (PARP) inhibitor monotherapy<br>as maintenance compared to those who receive active surveillance.<br>Insights from the presentations will deepen the understanding of<br>the use of PARP inhibitors for maintenance therapy in advanced<br>ovarian cancer and shed light on differences in treatment practice<br>across geographic locations. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for Zejula: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| ZEAL-1L (maintenance for 1L advanced NSCLC)<br><br><br><br><br><br>NCT04475939 | III | A randomised, double-blind, placebo-controlled, multi-centre trial<br>comparing niraparib plus pembrolizumab versus placebo plus<br>pembrolizumab as maintenance therapy in participants whose disease<br>has remained stable or responded to first-line platinum-based<br>chemotherapy with pembrolizumab for Stage IIIB/IIIC or IV non-small<br>cell lung cancer | Trial start:<br><br><br>Q4 2020 | Recruiting | ||||||||
| ZEST (Her2- with BRCA-mutation, or TNBC)<br><br><br><br><br><br>NCT04915755 | III | A randomised double-blinded trial comparing the efficacy and safety<br>of niraparib to placebo in participants with either HER2-negative<br>BRCA-mutated or triple-negative breast cancer with molecular<br>disease based on presence of circulating tumour DNA after<br>definitive therapy | Trial start:<br><br><br>Q2 2021 | Recruiting | ||||||||
| FIRST (1L ovarian cancer maintenance)<br><br><br><br><br><br>NCT03602859 | III | A randomised, double-blind, comparison of platinum-based therapy<br>with dostarlimab (TSR-042) and niraparib versus standard of care<br>platinum-based therapy as first-line treatment of stage III or IV<br>non-mucinous epithelial ovarian cancer | Trial start:<br><br><br>Q4 2018 | Active, not recruiting | ||||||||
| Immunology | ||||||||||||
| --- | ||||||||||||
| depemokimab (long-acting anti-IL5) | ||||||||||||
| --- | ||||||||||||
| In Q2 2022, GSK began recruiting for three additional phase III<br>programmes. This includes a screening of patients in two trials for<br>chronic rhinosinusitis with nasal polyps (CRSwNP) and site<br>initiation activities for trials in eosinophilic granulomatosis<br>with polyangiitis (EGPA) and hyper-eosinophilic syndrome (HES).<br>Recruitment of patients into all three programmes is<br>ongoing. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for depemokimab: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| SWIFT-1 (severe eosinophilic asthma; SEA)<br><br><br><br><br><br>NCT04719832 | III | A 52-week, randomised, double-blind, placebo-controlled,<br>parallel-group, multi-centre trial of the efficacy and safety of<br>depemokimab adjunctive therapy in adult and adolescent participants<br>with severe uncontrolled asthma with an eosinophilic<br>phenotype | Trial start:<br><br><br>Q1 2021 | Recruiting | ||||||||
| SWIFT-2 (SEA)<br><br><br><br><br><br>NCT04718103 | III | A 52-week, randomised, double-blind, placebo-controlled,<br>parallel-group, multi-centre trial of the efficacy and safety of<br>depemokimab adjunctive therapy in adult and adolescent participants<br>with severe uncontrolled asthma with an eosinophilic<br>phenotype | Trial start:<br><br><br>Q1 2021 | Recruiting | ||||||||
| NIMBLE (SEA)<br><br><br><br><br><br>NCT04718389 | III | A 52-week, randomised, double-blind, double-dummy, parallel group,<br>multi-centre, non-inferiority trial assessing exacerbation rate,<br>additional measures of asthma control and safety in adult and<br>adolescent severe asthmatic participants with an eosinophilic<br>phenotype treated with depemokimab compared with mepolizumab or<br>benralizumab | Trial start:<br><br><br>Q1 2021 | Recruiting | ||||||||
| ANCHOR-1 (CRSwNP)<br><br><br><br><br><br>NCT05274750 | III | Efficacy and safety of depemokimab in participants with<br>CRSwNP | Trial start:<br><br><br>Q2 2022 | Recruiting | ||||||||
| ANCHOR-2 (CRSwNP)<br><br><br><br><br><br>NCT05281523 | III | Efficacy and safety of depemokimab in participants with<br>CRSwNP | Trial start:<br><br><br>Q2 2022 | Recruiting | ||||||||
| OCEAN (EGPA)<br><br><br><br><br><br>NCT05263934 | III | Efficacy and safety of depemokimab compared with mepolizumab in<br>adults with relapsing or refractory EGPA | Trial site initiations underway | Recruiting | ||||||||
| DESTINY (HES)<br><br><br><br><br><br>NCT05334368 | III | A 52-week, randomised, placebo-controlled, double-blind, parallel<br>group, multicentre trial of depemokimab in adults with uncontrolled<br>HES receiving standard of care (SoC) therapy | Trial site initiations underway | Recruiting | ||||||||
| otilimab (anti-GM-CSF) | ||||||||||||
| --- | ||||||||||||
| GSK is<br>investigating otilimab, an anti-GM-CSF monoclonal antibody, as a<br>potential new treatment for rheumatoid arthritis (RA). We expect to<br>report results from three phase III studies by the end of<br>2022. | ||||||||||||
| --- | ||||||||||||
| Key<br>phase III trials for otilimab: | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| contRAst-1<br><br><br>(Moderate to severe RA MTX-IR patients)<br><br><br><br><br><br>NCT03980483 | III | A 52-week, multi-centre, randomised, double blind, efficacy, and<br>safety trial comparing otilimab with placebo and with tofacitinib,<br>in combination with methotrexate in participants with moderately to<br>severely active rheumatoid arthritis who have an inadequate<br>response to methotrexate | Trial start:<br><br><br>Q2 2019 | Active, not recruiting | ||||||||
| contRAst-2 (Moderate to severe RA DMARD-IR patients)<br><br><br><br><br><br>NCT03970837 | III | A 52-week, multi-centre, randomised, double blind, efficacy, and<br>safety trial, comparing otilimab with placebo and with tofacitinib<br>in combination with conventional synthetic DMARDs, in participants<br>with moderately to severely active rheumatoid arthritis who have an<br>inadequate response to conventional synthetic DMARDs or<br>biologic | Trial start:<br><br><br>Q2 2019 | Active, not recruiting | ||||||||
| contRAst-3 (Moderate to severe RA patients IR to biologic DMARD<br>and/or JAKs)<br><br><br><br><br><br>NCT04134728 | III | A 24-week, multi-centre, randomised, double-blind, efficacy and<br>safety trial, comparing otilimab with placebo and with sarilumab,<br>in combination with conventional synthetic DMARDs, in participants<br>with moderately to severely active rheumatoid arthritis who have an<br>inadequate response to biological DMARDs and/or Janus Kinase<br>inhibitors | Trial start:<br><br><br>Q4 2019 | Complete; results anticipated to be shared<br><br><br>H2 2022 | ||||||||
| Opportunity driven | ||||||||||||
| --- | ||||||||||||
| daprodustat (oral hypoxia-inducible factor prolyl hydroxylase<br>inhibitor) | ||||||||||||
| --- | ||||||||||||
| Earlier<br>this year, the EMA validated the marketing authorisation<br>application (MAA), and the US FDA accepted the NDA for daprodustat<br>based on the positive data from the ASCEND phase III clinical trial<br>programme. The programme included five pivotal trials assessing the<br>efficacy and safety of daprodustat for the treatment of anaemia of<br>chronic kidney disease (CKD) in both non-dialysis and dialysis<br>settings. GSK has also submitted MAAs in both Australia and<br>Switzerland. | ||||||||||||
| --- | ||||||||||||
| Trial name (population) | Phase | Design | Timeline | Status | ||||||||
| --- | --- | --- | --- | --- | ||||||||
| ASCEND-D (Dialysis subjects with anaemia of CKD)<br><br><br><br><br><br>NCT02879305 | III | A randomised, open-label (sponsor-blind), active-controlled,<br>parallel-group, multi-centre, event driven trial in dialysis<br>subjects with anaemia associated with chronic kidney disease to<br>evaluate the safety and efficacy of daprodustat compared to<br>recombinant human erythropoietin, following a switch from<br>erythropoietin-stimulating agents | Reported | Complete; primary endpoint met | ||||||||
| ASCEND-ID (Incident Dialysis subjects with anaemia of<br>CKD)<br><br><br><br><br><br>NCT03029208 | III | A 52-week open-label (sponsor-blind), randomised,<br>active-controlled, parallel-group, multi-centre trial to evaluate<br>the efficacy and safety of daprodustat compared to recombinant<br>human erythropoietin in subjects with anaemia of chronic kidney<br>disease who are initiating dialysis | Reported | Complete; primary endpoint met | ||||||||
| ASCEND-TD (Dialysis subjects with anaemia of CKD)<br><br><br><br><br><br>NCT03400033 | III | A randomised, double-blind, active-controlled, parallel-group,<br>multi-centre trial in haemodialysis participants with anaemia of<br>chronic kidney disease to evaluate the efficacy, safety, and<br>pharmacokinetics of three-times weekly dosing of daprodustat<br>compared to recombinant human erythropoietin, following a switch<br>from recombinant human erythropoietin or its analogues | Reported | Complete; primary endpoint met | ||||||||
| ASCEND-ND (Non-dialysis subjects with anaemia of CKD)<br><br><br><br><br><br>NCT02876835 | III | A randomised, open-label (sponsor-blind), active-controlled,<br>parallel-group, multi-centre, event driven trial in non-dialysis<br>subjects with anaemia of chronic kidney disease to evaluate the<br>safety and efficacy of daprodustat compared to darbepoetin<br>alfa | Reported | Complete; primary endpoint met | ||||||||
| ASCEND-NHQ (Non-dialysis subjects with anaemia of CKD)<br><br><br><br><br><br>NCT03409107 | III | A 28-week, randomised, double-blind, placebo-controlled,<br>parallel-group, multi-centre, trial in recombinant human<br>erythropoietin (rhEPO) naïve non-dialysis participants with<br>anaemia of chronic kidney disease to evaluate the efficacy, safety,<br>and effects on quality of life of daprodustat compared to<br>placebo | Reported | Complete; primary endpoint met | ||||||||
| Principal risks and<br>uncertainties<br><br><br>The<br>principal risks and uncertainties affecting the Group for 2022 are<br>those described under the headings below. In our November 2021<br>annual risk review, the Board agreed our principal risks for 2022,<br>which remain largely unchanged, with the evolution of Privacy to<br>Data Ethics and Privacy, Non-Promotional Engagement to Scientific<br>and Patient Engagement and Transformation and Separation to<br>Separation. Additionally, we agreed that Environmental<br>Sustainability, the risks relating to which are described on pages<br>284 to 285 of our Annual Report, will be managed under our ESG<br>areas of focus.<br><br><br><br><br><br>We<br>describe our risk management process on page 46 of our 2021 Annual<br>Report, along with more detailed information on our risks,<br>including definitions, trends, potential impact, context and<br>mitigation activities as set out on pages 47 to 48 and pages 275 to<br>287 of our 2021 Annual Report. Additionally, we include risks and<br>uncertainties relating to the COVID-19 pandemic in our Annual<br>Report (see page 54). | ||||||||||||
| --- | ||||||||||||
| 2022 Principal Risks | ||||||||||||
| --- | --- | --- | ||||||||||
| Risk Title | Risk Definition | |||||||||||
| Patient<br>safety | Failure<br>to appropriately collect, review, follow up, or report human safety<br>information (HSI), including adverse events from all potential<br>sources, and to act on any relevant findings in a timely<br>manner. | |||||||||||
| Product<br>quality | Failure<br>by GSK, its contractors or suppliers to ensure: | |||||||||||
| ● | Appropriate<br>controls and governance of quality in product<br>development; | |||||||||||
| ● | Compliance<br>with good manufacturing practice or good distribution practice<br>regulations in commercial or clinical trials manufacture and<br>distribution activities; | |||||||||||
| ● | Compliance<br>with the terms of GSK product licences and supporting regulatory<br>activities. | |||||||||||
| Financial<br>controls and reporting | Failure<br>to comply with current tax laws or incurring significant losses due<br>to treasury activities; failure to report accurate financial<br>information in compliance with accounting standards and applicable<br>legislation. | |||||||||||
| Anti-bribery<br>and anti-corruption (ABAC) | Failure<br>of GSK employees and third parties to comply with our anti-bribery<br>& anti-corruption (ABAC) principles, standards and controls, as<br>well as all applicable legislation. | |||||||||||
| Commercial<br>practices | Failure<br>to engage in commercial activities that are consistent with the<br>letter and spirit of the law, industry regulations, or the Group's<br>requirements relating to sales and promotion of our medicines and<br>vaccines; appropriate interactions with healthcare professionals/<br>organizations and patients; legitimate and transparent transfers of<br>value; and competition (or antitrust) regulations in commercial<br>practices, including trade channel activities and tendering<br>business. | |||||||||||
| Scientific<br>and patient engagement | We<br>engage externally with HCPs, HCOs, payers, governments,<br>patients/general public and others, to gain insights, educate and<br>communicate the science of our medicines and/or associated disease<br>areas to inform patient care decisions. These interactions must be<br>legitimate, conducted appropriately and transparently in compliance<br>with local laws, regulations, Industry Codes, GSK business and<br>ethics standards. | |||||||||||
| Data<br>ethics and privacy | With<br>increasing ease and opportunities for use and re-use of data<br>through artificial intelligence, data analytics and automation in<br>business decisions and processes, complex ethical dilemmas emerge<br>irrespective of legal compliance, particularly around its<br>application to personal data. Unethical use of data or the failure<br>to collect, secure, use, share and destroy Personal Information in<br>accordance with data privacy laws can lead to harm to individuals<br>and GSK. | |||||||||||
| Research<br>practices | Potential<br>failure to adequately conduct ethical and credible pre-clinical and<br>clinical research. In addition, it is the failure to engage in<br>scientific activities that are consistent with relevant laws,<br>industry practices, and GSK values and expectations. It comprises<br>the following sub-risks: Data Governance; Laboratory Research; and<br>Human Subject Research. | |||||||||||
| Environment,<br>health and safety (EHS) | Failure<br>in management of: | |||||||||||
| ● | Execution<br>of hazardous activities; | |||||||||||
| ● | GSK's<br>physical assets and infrastructure; | |||||||||||
| ● | Handling<br>and processing of hazardous chemicals and biological<br>agents; | |||||||||||
| ● | Control<br>of releases of substances harmful to the environment in both the<br>short and long term; | |||||||||||
| leading<br>to incidents which could disrupt our R&D and Supply activities,<br>harm employees, harm the communities and harm the local<br>environments in which we operate. | ||||||||||||
| Information<br>security | Information<br>Security risk is characterized as the unauthorised disclosure,<br>theft, unavailability or corruption of GSK’s Information or<br>key information systems that may lead to harm to our patients,<br>partners, workforce and/or customers, disruption to our business<br>and/or loss of commercial or strategic advantage, regulatory<br>sanction, or damage to our reputation. | |||||||||||
| Supply<br>continuity | Failure<br>to deliver a continuous supply of compliant finished product;<br>inability to respond effectively to a crisis incident in a timely<br>manner to recover and sustain critical operations. | |||||||||||
| Separation | Failure<br>to deliver the plan for successful separation of GSK into two new,<br>leading companies: new GSK and Haleon. | |||||||||||
| Reporting<br>definitions | ||||||||||||
| --- | ||||||||||||
| Total, Continuing and Adjusted results<br><br><br>Total<br>reported results represent the Group’s overall performance<br>including discontinued operations. Continuing results represents<br>performance excluding discontinued operations.<br><br><br><br><br><br>GSK<br>also uses a number of adjusted, non-IFRS, measures to report the<br>performance of its business. Adjusted results and other non-IFRS<br>measures may be considered in addition to, but not as a substitute<br>for or superior to, information presented in accordance with IFRS.<br>Adjusted results are defined on page 37 and other non-IFRS measures<br>are defined below and are based on continuing<br>operations.<br><br><br><br><br><br>Free cash flow from continuing operations<br><br><br>Free<br>cash flow is defined as the net cash inflow/outflow from continuing<br>operating activities less capital expenditure on property, plant<br>and equipment and intangible assets, contingent consideration<br>payments, net finance costs, and dividends paid to non-controlling<br>interests plus proceeds from the sale of property, plant and<br>equipment and intangible assets, and dividends received from joint<br>ventures and associates (all attributable to continuing<br>operations). It is used by management for planning and reporting<br>purposes and in discussions with and presentations to investment<br>analysts and rating agencies. Free cash flow growth is calculated<br>on a reported basis. A reconciliation of net cash inflow from<br>continuing operations to free cash flow from continuing operations<br>is set out on page 58.<br><br><br><br><br><br>Free cash flow conversion<br><br><br>Free<br>cash flow conversion is free cash flow from continuing operations<br>as a percentage of earnings attributable to shareholders from<br>continuing operations.<br><br><br><br><br><br>Working capital<br><br><br>Working<br>capital represents inventory and trade receivables less trade<br>payables.<br><br><br><br><br><br>CER and AER growth<br><br><br>In<br>order to illustrate underlying performance, it is the Group’s<br>practice to discuss its results in terms of constant exchange rate<br>(CER) growth. This represents growth calculated as if the exchange<br>rates used to determine the results of overseas companies in<br>Sterling had remained unchanged from those used in the comparative<br>period. CER% represents growth at constant exchange rates. £%<br>or AER% represents growth at actual exchange rates.<br><br><br><br><br><br>Total Net debt<br><br><br>Net debt is defined as total borrowings less cash, cash<br>equivalents, liquid investments, and short-term loans to third<br>parties that are subject to an insignificant risk of change in<br>value (including those classified as assets and liabilities held<br>for distribution).<br><br><br><br><br><br>COVID-19 solutions<br><br><br>COVID-19<br>solutions include the sales of pandemic adjuvant and other COVID-19<br>solutions including vaccine manufacturing and Xevudy and the associated costs but<br>does not include reinvestment in R&D. This categorisation is<br>used by management and we believe is helpful to investors through<br>providing clarity on the results of the Group by showing the<br>contribution to growth from COVID-19 solutions.<br><br><br><br><br><br>New GSK<br><br><br>New GSK<br>refers to the current GSK group excluding the Haleon business that<br>has been demerged.<br><br><br><br><br><br>General Medicines<br><br><br>General<br>Medicines are usually prescribed in the primary care or community<br>settings by general healthcare practitioners. For GSK, this<br>includes medicines in inhaled respiratory, dermatology, antibiotics<br>and other diseases.<br><br><br><br><br><br>Specialty Medicines<br><br><br>Specialty<br>Medicines are typically prescription medicines used to treat<br>complex or rare chronic conditions. For GSK, this comprises<br>medicines in infectious diseases, HIV, oncology, immunology and<br>respiratory.<br><br><br><br><br><br>Biopharma<br><br><br>Biopharma<br>refers to sales in Commercial Operations.<br><br><br><br><br><br>Share Consolidation<br><br><br>Shareholders<br>received 4 new Ordinary shares with a nominal value of 31¼<br>pence each for every 5 existing Ordinary share which had a nominal<br>value of 25 pence each. Earnings per share, diluted earnings per<br>share, adjusted earnings per share and dividends per share were<br>retrospectively adjusted to reflect the Share Consolidation in all<br>the periods presented.<br><br><br><br><br><br>Earnings per share<br><br><br>Earnings<br>per share has been retrospectively adjusted for the Share<br>Consolidation on 18 July 2022, applying a ratio of 4 new Ordinary<br>shares for every 5 existing Ordinary shares. | ||||||||||||
| --- | ||||||||||||
| Brand names and partner acknowledgements<br><br><br>Brand<br>names appearing in italics throughout this document are trademarks<br>of GSK or associated companies or used under licence by the<br>Group.<br><br><br>The MAPS trademark is a registered Trademark of Affinivax,<br>Inc. | ||||||||||||
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| Guidance, assumptions and<br>cautionary statements | ||||||||||||
| --- | ||||||||||||
| 2022 guidance<br><br><br>GSK now<br>expects 2022 sales to increase between 6 to 8 per cent and Adjusted<br>operating profit to increase between 13 to 15 per cent. Adjusted<br>Earnings per share is expected to grow around 1 per cent lower than<br>Operating Profit. This guidance is provided at CER and excludes the<br>commercial benefit of COVID-19 solutions.<br><br><br><br><br><br>Assumptions related to 2022 guidance<br><br><br>In<br>outlining the guidance for 2022, the Group has made certain<br>assumptions about the healthcare sector, the different markets in<br>which the Group operates and the delivery of revenues and financial<br>benefits from its current portfolio, pipeline and restructuring<br>programmes. This guidance relates only to GSK. With the momentum<br>from the business performance to date, GSK now expects 2022 sales<br>to increase between 6 to 8 per cent and Adjusted operating profit<br>to increase between 13 to 15 per cent, excluding any contributions<br>from COVID-19 solutions. Adjusted Earnings per share is expected to<br>grow around 1 per cent lower than Operating Profit. We have<br>delivered first half performance ahead of our full year guidance,<br>slightly better than expected, informed by strong business delivery<br>and the dynamics of prior year comparators.<br><br><br><br><br><br>Predominantly reflecting a more challenging H2 2021 sales<br>comparator as well as the expected increase in R&D spend, we<br>expect lower reported growth in the second half. Key external<br>factors that will influence the second half of 2022 include the<br>continued risk from COVID-19 dynamics and possible developments in<br>the current uncertain global economic environment.<br><br><br><br><br><br><br><br><br>Notwithstanding<br>uncertain economic conditions across many markets in which we<br>operate, we observe evidence of healthcare systems recovering and<br>continue to expect full year sales of Specialty Medicines to grow<br>approximately 10% CER and sales of General Medicines to show a<br>slight decrease, primarily reflecting increased genericisation of<br>established Respiratory medicines. Vaccines sales are now expected<br>to grow at a low to mid-teens percentage at CER for the year.<br>Specifically for Shingrix,<br>we continue to expect strong double-digit growth and record annual<br>sales in 2022, based on strong demand in existing markets and<br>continued geographical expansion. However, we do expect sales in<br>the second half to be slightly lower than in the first half of 2022<br>due to some channel stocking in the first half in the<br>US.<br><br><br><br><br><br>These<br>planning assumptions as well as operating profit guidance and<br>dividend expectations assume no material interruptions to supply of<br>the Group’s products, no material mergers, acquisitions or<br>disposals, no material litigation or investigation costs for the<br>Company (save for those that are already recognised or for which<br>provisions have been made) and no change in the Group’s<br>shareholdings in ViiV Healthcare. The assumptions also assume no<br>material changes in the healthcare environment or unexpected<br>significant changes in pricing as a result of government or<br>competitor action. The 2022 guidance factors in all divestments and<br>product exits announced to date.<br><br><br><br><br><br>The<br>Group’s guidance assumes successful delivery of the<br>Group’s integration and restructuring plans. Material costs for investment in new product<br>launches and R&D have been factored into the expectations<br>given. Given the potential development options in the Group’s<br>pipeline, the outlook may be affected by additional data-driven<br>R&D investment decisions. The guidance is given on a constant<br>currency basis.<br><br><br><br><br><br>Assumptions and cautionary statement regarding forward-looking<br>statements<br><br><br>The<br>Group’s management believes that the assumptions outlined<br>above are reasonable, and that the guidance, outlooks, ambitions<br>and expectations described in this report are achievable based on<br>those assumptions. However, given the forward-looking nature of<br>these guidance, outlooks, ambitions and expectations, they are<br>subject to greater uncertainty, including potential material<br>impacts if the above assumptions are not realised, and other<br>material impacts related to foreign exchange fluctuations,<br>macro-economic activity, the impact of outbreaks, epidemics or<br>pandemics, such as the COVID-19 pandemic and ongoing challenges and<br>uncertainties posed by the COVID-19 pandemic for businesses and<br>governments around the world, changes in legislation, regulation,<br>government actions or intellectual property protection, product<br>development and approvals, actions by our competitors, and other<br>risks inherent to the industries in which we operate.<br><br><br><br><br><br>This<br>document contains statements that are, or may be deemed to be,<br>“forward-looking statements”. Forward-looking<br>statements give the Group’s current expectations or forecasts<br>of future events. An investor can identify these statements by the<br>fact that they do not relate strictly to historical or current<br>facts. They use words such as ‘anticipate’,<br>‘estimate’, ‘expect’, ‘intend’,<br>‘will’, ‘project’, ‘plan’,<br>‘believe’, ‘target’ and other words and<br>terms of similar meaning in connection with any discussion of<br>future operating or financial performance. In particular, these<br>include statements relating to future actions, prospective products<br>or product approvals, future performance or results of current and<br>anticipated products, sales efforts, expenses, the outcome of<br>contingencies such as legal proceedings, dividend payments and<br>financial results. Other than in accordance with its legal or<br>regulatory obligations (including under the Market Abuse<br>Regulation, the UK Listing Rules and the Disclosure and<br>Transparency Rules of the Financial Conduct Authority), the Group<br>undertakes no obligation to update any forward-looking statements,<br>whether as a result of new information, future events or otherwise.<br>The reader should, however, consult any additional disclosures that<br>the Group may make in any documents which it publishes and/or files<br>with the SEC. All readers, wherever located, should take note of<br>these disclosures. Accordingly, no assurance can be given that any<br>particular expectation will be met and investors are cautioned not<br>to place undue reliance on the forward-looking<br>statements.<br><br><br><br><br><br>All outlooks, ambitions and expectations should be read together<br>with pages 5-7 of the Stock Exchange announcement relating to an<br>update to investors dated 23 June 2021, paragraph 19 of Part 7 of<br>the Circular to shareholders relating to the demerger of Haleon<br>dated 1 June 2022 and the Guidance, assumptions and cautionary<br>statements in this Q2 2022 earnings release.<br><br><br><br><br><br>Forward-looking<br>statements are subject to assumptions, inherent risks and<br>uncertainties, many of which relate to factors that are beyond the<br>Group’s control or precise estimate. The Group cautions<br>investors that a number of important factors, including those in<br>this document, could cause actual results to differ materially from<br>those expressed or implied in any forward-looking statement. Such<br>factors include, but are not limited to, those discussed under Item<br>3.D ‘Risk Factors’ in the Group’s Annual Report<br>on Form 20-F for 2021 and any impacts of the COVID-19 pandemic. Any<br>forward looking statements made by or on behalf of the Group speak<br>only as of the date they are made and are based upon the knowledge<br>and information available to the Directors on the date of this<br>report. | ||||||||||||
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| Directors’<br>responsibility statement<br><br><br><br><br><br>The Board of Directors approved this Half-yearly Financial Report<br>on 27 July 2022.<br><br><br><br><br><br>The Directors confirm that to the best of their knowledge the<br>unaudited condensed financial information has been prepared in<br>accordance with IAS 34 as contained in UK-adopted International<br>Financial Reporting Standards (IFRS) and that the interim<br>management report includes a fair review of the information<br>required by DTR 4.2.7 and DTR 4.2.8.<br><br><br><br><br><br>After making enquiries, the Directors considered it appropriate to<br>adopt the going concern basis in preparing this Half-yearly<br>Financial Report.<br><br><br><br><br><br>The Directors of GSK plc are as follows: | ||||||||||||
| --- | --- | |||||||||||
| Sir Jonathan Symonds | Non-Executive Chair, Nominations & Corporate Governance<br>Committee Chair | |||||||||||
| Dame Emma Walmsley | Chief Executive Officer (Executive Director) | |||||||||||
| Iain Mackay | Chief Financial Officer (Executive Director) | |||||||||||
| Dr Hal Barron | Chief Scientific Officer and President, R&D (Executive<br>Director) | |||||||||||
| Charles Bancroft | Senior Independent Non-Executive Director, Audit & Risk<br>Committee Chair | |||||||||||
| Dr Anne Beal | Independent Non-Executive Director, Corporate Responsibility<br>Committee Chair | |||||||||||
| Dr Harry (Hal) Dietz | Independent Non-Executive Director | |||||||||||
| Dr Laurie Glimcher | Independent Non-Executive Director | |||||||||||
| Dr Jesse Goodman | Independent Non-Executive Director, Science Committee<br>Chair | |||||||||||
| Urs Rohner | Independent Non-Executive Director, Remuneration Committee<br>Chair | |||||||||||
| Dr Vishal Sikha | Independent Non-Executive Director | |||||||||||
| By order of the Board | ||||||||||||
| --- | --- | |||||||||||
| Emma Walmsley<br><br><br>Chief Executive Officer<br><br><br><br><br><br>27 July 2022 | Iain Mackay<br><br><br>Chief Financial Officer | |||||||||||
| Independent review report<br>to GSK plc | ||||||||||||
| --- | ||||||||||||
| We have<br>been engaged by GSK plc (“the Company”) to review the<br>condensed financial information in the Results Announcement of the<br>Company for the three and six months ended 30 June<br>2022. | ||||||||||||
| --- | ||||||||||||
| What we have reviewed | ||||||||||||
| --- | --- | |||||||||||
| The<br>condensed financial information comprises: | ||||||||||||
| ● | the<br>income statement and statement of comprehensive income for the<br>three month period ended 30 June 2022 on pages 39 to<br>40; | |||||||||||
| ● | the<br>balance sheet as at 30 June 2022 on page 44; | |||||||||||
| ● | the<br>statement of changes in equity for the six month period then ended<br>on page 45; | |||||||||||
| ● | the<br>cash flow statement for the six month period then ended on page 46<br>and; | |||||||||||
| ● | the<br>accounting policies and basis of preparation and the explanatory<br>notes to the condensed financial information on pages 41 to 43 and<br>47 to 58 that have been prepared applying consistent accounting<br>policies to those applied by the Group in the Annual Report 2021,<br>which was prepared in accordance with International Financial<br>Reporting Standards (“IFRS”) as adopted by the United<br>Kingdom. | |||||||||||
| We have<br>read the other information contained in the Results Announcement,<br>including the non-IFRS measures contained on pages 41 to 43 and 47<br>to 58, and considered whether it contains any apparent<br>misstatements or material inconsistencies with the information in<br>the condensed set of financial statements.<br><br><br><br><br><br>This<br>report is made solely to the Company in accordance with<br>International Standard on Review Engagements (UK and Ireland) 2410<br>“Review of Interim Financial Information Performed by the<br>Independent Auditor of the Entity” issued by the Financial<br>Reporting Council. Our work has been undertaken so that we might<br>state to the Company those matters we are required to state to it<br>in an independent review report and for no other purpose. To the<br>fullest extent permitted by law, we do not accept or assume<br>responsibility to anyone other than the Company, for our review<br>work, for this report, or for the conclusions we have<br>formed.<br><br><br><br><br><br>Directors’ responsibilities<br><br><br>The<br>Results Announcement of the Company, including the condensed<br>interim financial information, is the responsibility of, and has<br>been approved by, the directors. The directors are responsible for<br>preparing the Results Announcement of the Company in accordance<br>with the Disclosure Guidance and Transparency Rules of the United<br>Kingdom’s Financial Conduct Authority.<br><br><br><br><br><br>As<br>disclosed in Note 1, the annual financial statements of the Company<br>are prepared in accordance with United Kingdom adopted<br>International Financial Reporting Standards. The condensed<br>financial information included in this Results Announcement have<br>been prepared in accordance with United Kingdom adopted<br>International Accounting Standard 34, “Interim Financial<br>Reporting”.<br><br><br><br><br><br>Our responsibility<br><br><br>Our<br>responsibility is to express to the Company a conclusion on the<br>condensed financial information in the Results Announcement based<br>on our review. Our conclusion, including our Conclusions Relating<br>to Going Concern, are based on procedures that are less extensive<br>than audit procedures, as described in the Scope of Review<br>paragraph of this report.<br><br><br><br><br><br>Conclusion Relating to Going Concern<br><br><br>Based<br>on our review procedures, which are less extensive than those<br>performed in an audit as described in the Basis for Conclusion<br>section of this report, nothing has come to our attention to<br>suggest that the directors have inappropriately adopted the going<br>concern basis of accounting or that the directors have identified<br>material uncertainties relating to going concern that are not<br>appropriately disclosed.<br><br><br><br><br><br>This<br>conclusion is based on the review procedures performed in<br>accordance with this ISRE (UK), however future events or conditions<br>may cause the entity to cease to continue as a going<br>concern.<br><br><br><br><br><br>Scope of review<br><br><br>We<br>conducted our review in accordance with International Standard on<br>Review Engagements (UK and Ireland) 2410 “Review of Interim<br>Financial Information Performed by the Independent Auditor of the<br>Entity” issued by the Financial Reporting Council for use in<br>the United Kingdom. A review of interim financial information<br>consists of making inquiries, primarily of persons responsible for<br>financial and accounting matters, and applying analytical and other<br>review procedures. A review is substantially less in scope than an<br>audit conducted in accordance with International Standards on<br>Auditing (UK) and consequently does not enable us to obtain<br>assurance that we would become aware of all significant matters<br>that might be identified in an audit. Accordingly, we do not<br>express an audit opinion.<br><br><br><br><br><br>Conclusion<br><br><br>Based<br>on our review, nothing has come to our attention that causes us to<br>believe that the condensed financial information in the Results<br>Announcement for the three and six months ended 30 June 2022 are<br>not prepared, in all material respects, in accordance with United<br>Kingdom adopted International Accounting Standard 34 and the<br>Disclosure Guidance and Transparency Rules of the United<br>Kingdom’s Financial Conduct Authority.<br><br><br><br><br><br><br><br><br><br><br><br>Deloitte LLP<br><br><br>Statutory<br>Auditor<br><br><br>London,<br>United Kingdom<br><br><br>27 July<br>2022 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.
| GSK plc | |
|---|---|
| (Registrant) | |
| Date:<br>July 27, 2022 | |
| By:/s/ VICTORIA<br>WHYTE<br><br><br>-------------------------- | |
| Victoria Whyte | |
| Authorised<br>Signatory for and on | |
| behalf<br>of GSK plc |