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# GSK plc GSK plc - Q1 2024 Earnings Call

Wednesday, May 1, 2024 7:00 AM

## Event Participants

#### Executives 6

Nick Stone, Emma Walmsley, Luke Miels, Deborah Waterhouse, Julie Brown, Tony Wood

#### Analysts 12

Mark Purcell, Kerry Holford, Graham Parry, Jo Walton, Steve Scala, Simon Baker, James Gordon, Emily Field, Richard Parkes, Unknown Analyst, Peter Welford, Timothy Anderson

#### Nick Stone Executive

Hello, everyone. Welcome to today's call and webcast. The presentation was sent to our distribution list by e-mail, and you can !nd this on gsk.com. Please turn to Slide 2. This is the usual safe harbor statement.

We'll comment on our performance using constant exchange rates, or CR unless stated otherwise. As a reminder, adjusted results are now referred to as core like many European pharmaceutical peers. Please turn to Slide 3. Today's call will last approximately 1 hour with the presentation taking around 25 minutes and the remaining time for your questions. Today, our sp...

# GSK plc GSK plc - Q1 2024 Earnings Call

Wednesday, May 1, 2024 7:00 AM

## Event Participants

#### Executives 6

Nick Stone, Emma Walmsley, Luke Miels, Deborah Waterhouse, Julie Brown, Tony Wood

#### Analysts 12

Mark Purcell, Kerry Holford, Graham Parry, Jo Walton, Steve Scala, Simon Baker, James Gordon, Emily Field, Richard Parkes, Unknown Analyst, Peter Welford, Timothy Anderson

#### Nick Stone Executive

Hello, everyone. Welcome to today's call and webcast. The presentation was sent to our distribution list by e-mail, and you can !nd this on gsk.com. Please turn to Slide 2. This is the usual safe harbor statement.

We'll comment on our performance using constant exchange rates, or CR unless stated otherwise. As a reminder, adjusted results are now referred to as core like many European pharmaceutical peers. Please turn to Slide 3. Today's call will last approximately 1 hour with the presentation taking around 25 minutes and the remaining time for your questions. Today, our speakers are Emma Walmsley, Luke Miels, Deborah Waterhouse, and Julie Brown with Tony Wood and David Redfern joining for Q&A.

Please ask 1 to 2 questions so that everyone has the chance to participate. Turning to Slide 4. I will now hand the call over to Emma.

#### Emma Walmsley Executive

Thanks, Nick, and welcome to everybody joining us today. I'm delighted to be presenting to you all with another set of excellent quarterly results for GSK. Please turn to the next slide. We have had a very strong start to the year. Sales and pro!ts grew double digits for the quarter, with sales up 13% to GBP 7.4 billion, core operating pro!t up 35% to GBP 2.4 billion and core earnings per share up 37% to 43.1p, all excluding COVID solutions.

This excellent performance re"ects our continued focus on execution, some bene!t from phasing in the quarter and strong delivery of our recent launches. It also demonstrates the great momentum we continue to see across the business. Demand for our innovative vaccines and specialty medicines was clear with strong growth across new products. Our very good sales performance was also underpinned by good cost control. Julie will take you through the details on this in a moment, but I particularly want to highlight our SG&A performance, which was delivered alongside increasing investment in R&D, demonstrating continued delivery of e#ective operating leverage and margin improvement.

These bene!ts are also delivering improved cash "ow, providing funds for investment and returns to shareholders. Our dividend for the quarter was 15p. And for the full year, we are upgrading our guidance and looking forward to delivering another year of meaningful growth for shareholders. Next slide, please. Alongside our excellent !nancial performance, we've seen strong pipeline progress across the therapy areas with Phase III data readouts for 4 medicines.

For gepotidacin, further pivotal data that supports regulatory submission of this new antibiotic; for Cabenuva, further evidence of superior e\$cacy; for Jemperli, potential broader use of this medicine to treat endometrial cancer; and lastly, encouraging clinical data supporting use of Blenrep for the treatment of multiple myeloma. These data will be presented at ASCO, and we look forward to sharing more with you on our plans for oncology at our Meet the Management event in June. These readouts, together with other R&D achievements this quarter mean we've strengthened growth prospects in all of our key therapeutic areas. The 3 material points I'd highlight. First, we continued to strengthen our innovative vaccine portfolio this quarter, with regulatory submission of our new 5-in-1 meningococcal vaccine candidate alongside new expansion opportunities for both Arexvy in the U.S.

and Shingrix in China. Second, positive clinical trial !ndings for an ultra long-acting formulation of cabotegravir further supporting progression of this medicine and con!dence in the important transition we expect in our HIV portfolio for long-term growth. And third, in respiratory, we completed the acquisition of Aiolos Bio. A signal of our continued investment and leadership in this disease area where a next important step will be sharing data for depemokimab, which we expect in Q2. Next slide, please.

Alongside delivering stronger shareholder returns, we continue to build trust by delivering across the 6 key areas we prioritize for ESG. This quarter, we published our ESG performance report. 95% of the metrics we target are being met or exceeded. We also saw that GSK developed TB vaccine candidate enter Phase III, sponsored by the Gates MRI and Wellcome Foundation. This could potentially be the !rst new TB vaccine in over 100 years.

So all in, a very good start to the year. Let's now hear more from the team on our progress, starting with Luke.

# Luke Miels Executive

Thanks, Emma. Please turn to the next slide. In Q1, we delivered growth across all our product areas and regions with GBP 7.4 billion of sales, up 13% versus last year, excluding COVID solutions. This includes a strong performance in the U.S. led by continued contributions from our new launch products.

Please turn to Slide 10. In Vaccines, we saw a strong growth of 22% in Q1, excluding COVID solutions, led by Arexvy and Shingrix. Following the outstanding launch last year, Arexvy continued to deliver with sales of GBP 182 million in the quarter. Script data shows a strong

preference for Arexvy as we received 2 out of every 3 retail prescriptions, with U.S. market penetration of around 14%.

I'll cover Arexvy in more detail on the next slide. Shingrix delivered a record of GBP 945 million in the quarter and was up 18%, driven by public funding outside the U.S. together with early supply to our new partnership in China. Outside the U.S., Shingrix has launched in 39 markets and the majority have less than 5% penetration. In the U.S., sales decreased by 4%, re"ecting the comparison to Q1 '23, which bene!ted from the removal of the co-pay for adults aged 65 and over in Medicare as well as the prioritization of other adult vaccines during the bio respiratory season.

We are investing in DTC and ACP campaigns as we seek to activate harder to reach consumers to continue to grow the cumulative immunization rate, now 37% of people aged 50 and older, which leaves more than 75 million Americans still unvaccinated and eligible to receive Shingrix. Our expectation continues to be that Shingrix sales will reach more than GBP 4 billion over time, driven by growth outside the U.S. In addition, we have also recently shared exceptional data demonstrating vaccine e\$cacy of 82% at year 11. Turning to our meningitis portfolio. Bexsero and Menveo sales were up 3% and 41%, respectively, in the quarter, with performance in Brazil and favorable phasing driving the growth in Menveo.

We're pleased to have received FDA !le acceptance for our MenABCWY vaccine in mid-April. And combined, our meningitis portfolio is expected to deliver around GBP 2 billion in peak year sales. Across our vaccines portfolio, we expect sales to increase high single to low double-digit percent in 2024. Next slide, please. Focusing on RSV, we've vaccinated over 1.3 million people with Arexvy in the retail setting during Q1.

The launch was exceptional and exceeded our expectations. We now see seasonality similar to "u impacting use patterns in the !rst year. In 2024, we expect the vast majority of sales to be in the U.S. and weighted to the second half in preparation for the 2024-2025 RSV season. This year, we continue to build on our competitive pro!le with the potential to expand the label, adding at-risk individuals in the 50 to 59 cohort, which could impact approximately 15 million people in the U.S.

This is subject to approval, followed by ACIP review in June. Last year, we presented data supporting an e\$cacy pro!le for Arexvy of at least 2 seasons. As the '23-'24 RSV season is coming to an end, later this year, we expect to have additional e\$cacy data on long-term duration of protection and immunogenicity data over 3 years. We plan to present the totality of data at a future public health forum in the second half of this year, and we do not expect public health o\$cials to decide on the frequency of RSV vaccination or revaccination before 2025. We're ambitious about growth in an expanding market with increasing competition.

Whether a 2-season or a 3-season vaccine pro!le, we remain very con!dent that Arexvy can achieve more than GBP 3 billion in peak year sales over time. Next slide, please. In Specialty Medicines, including HIV, which Deborah will cover shortly, we increased sales by 19%, excluding COVID solutions. In Respiratory and Immunology, our market-leading medicines, Nucala and Benlysta continued to deliver good growth. Nucala was up 13%, re"ecting high patient demand for treatments addressing severe eosinophilic asthma, chronic rhinosinusitis with nasal polyps and EGPA.

Our MATINEE trial to con!rm the e\$cacy of Nucala in COPD is expected to read out in the second half of this year. We also expect pivotal trial results for our 6 monthly IL-5 depemokimab. This year with readouts in asthma in Q2 and chronic rhinosinusitis with nasal polyps before year-end. Combined, we anticipate our IL-5 portfolio to deliver more than GBP 4 billion in peak year sales. Benlysta continues to show consistent growth and was up 8% in the quarter, with opportunities to drive earlier intervention and increase penetration in both SLE and lupus nephritis.

In oncology, sales more than doubled in the quarter. Ojjaara has continued to perform well following last year's launch, and I'll talk more about this on the next slide. We are pleased to receive authorization from the European Commission for Ojjaara in late January, and we have since launched in the U.K. and Germany. Jemperli has also continued to grow strongly.

And again, I'll discuss this further on the next slide. Zejula's performance was driven by increased patient demand and higher volumes due to the new tablet formulation, with further growth from new international launches. Overall, we expect strong performance for our Specialty Medicines in 2024, with growth of low double-digit percent. Please turn to Slide 13. Ojjaara, which we acquired from Sierra Oncology, has performed exceptionally well following last year's launch and has the strongest uptake curve for a JAK inhibitor in myelo!brosis.

Ojjaara is establishing market share in both the !rst line and second line settings, and we've seen encouraging data suggesting physicians are anticipating increasing their use of Ojjaara in the coming months. For Jemperli, we've demonstrated strong execution in the quarter with our new patient share up 33%, and we continued to build further clinical evidence in endometrial cancer, where we recently presented data demonstrating that Jemperli plus chemotherapy is the only IO combination to show statistically signi!cant and clinically meaningful OS data in the all-comers population. Subsequently, the FDA has granted a priority review to our !le to expand the treatment with Jemperli to all adult patients with primary advanced or recurrent endometrial cancer. We also expect this data to be published soon in a peer-reviewed journal. On Blenrep, we're encouraged by the data from DREAMM-7, which showed a tripling of progression-free survival.

DREAMM-8 also met its primary endpoint and showed a statistically signi!cant and clinically meaningful PFS compared to standard of care in second-line multiple myeloma. In addition, DREAMM-7 and 8 also demonstrated strong overall survival trends, and we will continue to follow up to completion. We look forward to presenting these data at ASCO in June and are targeting regulatory !lings in the second half of the year. Next slide, please. Finally, turning to our General Medicines portfolio, sales grew 1% in the quarter led by Trelegy delivering GBP 591 million and established products in emerging markets.

We've also seen growth owning the stockpiling and patient demand and it's still early in the year, and we are continuing to assess and manage the impact of the AMP Cap removal in the U.S. And as a reminder, there was a USD 150 million impact in 2023, and we continue to expect up to USD 550 million of sales at risk for the full year. The growth outlook for gen meds is unchanged. I'll now hand over to Deborah to cover HIV.

# Deborah Waterhouse Executive

Thank you, Luke. We continued to drive HIV market transformation and are pleased to see our growth momentum continuing with HIV sales growing 14% to GBP 1.6 billion in the !rst quarter. This is driven mainly by increased patient demand for our oral 2-drug and long-acting injectable regimens and represents an increase of more than 2 percentage points in global market share versus Q1 2023. This continued strong performance demonstrates our leadership in transforming the HIV marketplace and delivering on individual patient needs. Looking across our portfolio, Dovato, our leading oral 2-drug regimen and #1 selling HIV medicine grew sales by 27% versus Q1 2023.

Our long-acting portfolio is also showing strong momentum with Cabenuva growing 73% and Apretude growing over 100%. With more than 60,000 patients bene!ting from these medicines, our ongoing growth is underpinned by strong patient demand and excellent operational execution. We believe that long-acting options have the potential to change the trajectory of the HIV epidemic. And as the leaders in driving this market shift, it is positive to see this portfolio growing more than 80% versus Q1 2023 and contributing 17% of total portfolio sales. In absolute terms, this resulted in GBP 116 million of growth representing more than 50% of the total HIV CER growth.

Overall, Q1 has been a very strong quarter and puts us !rmly on track to deliver a growth rate of high single to low double digits in 2024. We were also pleased by the positive reaction from the scienti!c and medical community to the comprehensive set of early phase as well as Phase IIIb4 and real-world evidence data that was presented at CROI in March, demonstrating con!dence in our current portfolio and progress towards our pipeline of ultra long-acting regimens. HIV physicians and health care providers reinforce to us time and time again that the long-acting regimens which they have in their hands today are really transforming the lives of people living with HIV, liberating people from the daily burden of oral therapy, improving adherence and tackling stigma, which remains stubbornly pervasive. Data from over 11,000 patients participating in long-acting clinical and real-world evidence trials clearly demonstrates the e#ectiveness of our long-acting treatment regimen. We were particularly pleased with the interim data from the LATITUDE study, indicating that Cabenuva has superior e\$cacy compared to daily oral therapy in individuals living with HIV who have adherence challenges.

We also presented positive Phase I data from a study of cabotegravir ultra long-acting dosed at intervals of at least every 4 months and positive Phase IIa data from the [ bNab ] study, exploring the use of our novel broadly neutralizing antibody, N6LS, for the treatment of people living with HIV. These data show continued progress towards our ambition to end the HIV epidemic, delivering our ultra long-acting pipeline with cabotegravir replacing dolutegravir as our foundational medicine. We remain on track to o#er 4 monthly dosing options for prevention in 2026 and treatment in 2027 as well as extending the dosing interval of our long-acting regimens in treatment and prevention to enable every 6-month dosing towards the end of the decade. At our September 2023 Meet the Management event, we committed to delivering around 40% of our revenue from long-acting medicines by 2027 and our current performance puts us on the right trajectory to achieve that goal. We are, therefore, con!dent in our ability to navigate through the revenue impact associated with the loss of exclusivity of dolutegravir.

With that, I will hand to Julie.

#### Julie Brown Executive

Thank you, Deborah, and good morning, everyone. As a reminder, to align with European pharmaceutical peers, we've changed our name in convention. So I will be referring to core instead of adjusted results. Next slide, please. Starting with the income statement, with growth rates stated at constant exchange rates.

Sales increased 13%, excluding COVID solutions, and were up 10% overall, re"ecting continued strong business performance. As Luke mentioned, growth bene!ted from newly launched products, Arexvy, Ojjaara and Jemperli, along with earlier than expected Shingrix sales to our partner, Zhifei in China. Together, these added 5 percentage points of growth in Q1. Core operating pro!t grew 35%, excluding COVID, and 27% overall, and the margin increased to 33.2% with leverage from gross margin and SG&A. Cost of goods bene!ted from mix e#ects, including growth of higher-margin Arexvy, Shingrix and specialty care products.

We expect to deliver gross margin leverage in the full year with bene!ts predominantly in the !rst half given anticipated sales phasing and mixed dynamics. At the full year, we discussed our focus on delivering improved operational leverage, as we seek to bene!t from the investment made over recent years. Against this backdrop, we're pleased 2024 has started well, with underlying low single-digit percentage SG&A growth. This, together with a one-o# bene!t from the successful Zejula royalty dispute caused SG&A spend to increase in the quarter by 2%. R&D investment continued to grow broadly in line with sales, as expected, mainly within our vaccines, respiratory and infectious diseases late-stage portfolios.

Core earnings per share grew 37%, excluding COVID solutions. Now turning to the total results. Operating pro!t decreased 18% to GBP 1.5 billion, primarily re"ecting a charge arising from the remeasurement of the ViiV CCL and P!zer put option, largely resulting from improved longer-term prospects in our HIV business and currency. Overall, currency was adverse in the quarter due to the strengthening of sterling against the U.S. dollar and emerging market currencies.

Next slide, please. Moving to the core operating pro!t margin. On this slide, we have shared, including and excluding COVID, to provide a review of our margin dynamics. Excluding COVID, the margin improvement was signi!cant at 580 basis points CER due to 2 main reasons: !rst, underlying margin bene!ts contributed 410 basis points driven largely by sales growth, favorable product mix and SG&A leverage partly o#set by the impact from the loss of Gardasil royalties. And secondly, the Zejula royalty dispute contributed 170 basis points of margin improvement in the quarter.

Including COVID solutions, there was a 460 basis point improvement driven by similar factors. Next slide, please. Cash generated from operations was GBP 1.1 billion, representing an improvement of GBP 0.8 billion over Q1 last year. This was driven by core operating pro!t and favorable working capital, with the latter bene!ting from higher receivable collections, particularly in the U.S. Vaccines business.

Free cash "ow was GBP 289 million in the quarter relative to an out"ow last year and

therefore, improving year-on-year by GBP 978 million. Next slide, please. Slide 20 shares our net debt position since the 31st of December last year and how we've actively deployed capital in the business in line with our framework. Net debt was broadly stable compared to the end of 2023 at GBP 15 billion. This included further monetization of our stake in Haleon and the completion of the acquisition of Aiolos Bio in the quarter.

With our end 2023 net debt to core EBITDA ratio of 1.5x, and expected cash generation, we have a strong balance sheet to support continued investment in future growth, including through BD as we look to deploy funds to enhance growth and deliver attractive shareholder returns. Now with that, I'll turn to our full year expectations. Next slide, please. Turning to guidance. There is no change to our sales range of 5% to 7%, but we're increasingly con!dent of the full year being towards the upper part of the range.

We are upgrading our operating pro!t guidance to 9% to 11%, re"ecting the strong start to the year and bene!ts from the Zejula patent dispute in the !rst quarter. We also expect royalty income to be slightly higher between GBP 550 million and GBP 600 million in 2024. These bene!ts also "ow through to our earnings per share now upgraded to 8% to 10% for the year. I also wanted to give some color on anticipated phasing throughout the year, starting with sales. Continued execution of the successful launches of Arexvy, Ojjaara and Jemperli life cycle innovation, have contributed 5 percentage points of growth in Q1 and will continue to bene!t Q2.

However, we will annualize their launches, including the initial channel inventory build in Arexvy in the second half. This year is also the start of our agreement with Zhifei for Shingrix in China. As Luke said, we had earlier than expected sales in Q1, but still expect the majority of 2024 Shingrix sales to be in Q2. Taking these factors together, we therefore expect sales growth will be signi!cantly higher in half 1 relative to half 2. And turning to the operating pro!t dynamics.

We continue to expect SG&A to increase in the low single-digit percentage range and for R&D to increase broadly in line with sales for the year. As a result, driven by the sales phasing, operating pro!t growth will also be signi!cantly higher in half 1 given the operating leverage. In summary, whilst it is still early in the year, we've made an excellent start to 2024 and are con!dent in delivering the full year guidance and longer-term outlook. Turning to Slide 22. Lastly, our IR road map, which shares our progress towards major milestones and value unlock opportunities.

it's clear that we've had a very positive start to the year with a number of important pipeline events delivered, as Emma mentioned. The main milestones expected in the next 2 months are the U.S. FDA approval of Arexvy in adults aged 50 to 59. The Phase III data readout of depemokimab in severe asthma with an eosinophilic phenotype and the presentation of Blenrep data at ASCO in June. Turning to R&D milestones.

Many of the successes since Q4 have been within oncology, and we look forward to our Meet the Management event in June to share a deeper review with you. I will now hand back to Emma to conclude.

# Emma Walmsley Executive

Thanks, Julie. So to summarize, GSK continues to deliver on its commitments and perform to a new standard. Our excellent performance in Q1 provides us with clear momentum. We're pleased to be upgrading guidance and expect to deliver another year of meaningful growth in sales and earnings in 2024, as we continue to focus on prevention and changing the course of disease for millions of people. This all bodes well, but it's still early in the year.

And we remain very focused on delivering on our commitments and more at continued pace for patients, for shareholders and for our people, combining science, technology and talent to get ahead of disease together. With that, I'll now open up the call for the Q&A with the team.

## Nick Stone Executive

Thanks, Emma. We're going to take our !rst question from Mark Purcell at Morgan Stanley.

# Mark Purcell Analyst

Yes. So 2 questions on Shingrix. Could you help us understand the contribution we might expect from Zhifei in full year '24? And then going back to your point of ex U.S. penetration being less than 5% versus 37% in the U.S., could you sort of like help us understand if there are any leading indicator countries, which we could think about in terms of the broader ex U.S.

penetration increasing or other vaccines, there could be proxies for how high the ex U.S. penetration could go? And then the second one on Nucala, COPD. There's been some discussion around Dupixent and a potential delay to the PDUFA as Sano! trades label breadth for time into the market. So could you help us understand the breadth of the MATINEE trial in terms of the patient population you're addressing?

I think you've got bronchitic and emphysemic patients in there, and it's a broad eos phenotype as well. So it would be helpful to understand the relative breadth of your label and target population.

# Emma Walmsley Executive

Great. Thanks, Mark. So we'll come !rst to Luke on the prospects of expansion on Shingrix and then we'll come Tony to you.

## Luke Miels Executive

Sure, Mark. So I'm pleased to say it's following very much in line with the strategy that we've been outlined over the last few years. So with the contract with Zhifei, we have -- it's around GBP 400 million with the contract. As we've said before, we are somewhat limited with supply into China this year. So GBP 400 million is the number that you should use and then GBP 800 million next year and then GBP 1.2 million.

The intent, of course, is to run that relationship signi!cantly beyond the initial 3 years. Encouraging start. We're now in the !eld as of April with Zhifei and the point of vaccination expansion is very encouraging. So good news there. In terms of analogs, look, I think - there's -- in markets like Europe and Japan, it's very much about reimbursement penetration.

So I think the U.K. is a good analog. Spain, Italy, these are good analogs, and we're very much

at the start of the process in those markets with single-digit penetration overall. In terms of emerging markets, I think you've got a range of markets. I think Saudi is quite interested in terms of government support for tenders and things like that.

At -- we've been very strict on pricing, so that's encouraging. And then out-of-pocket markets like Brazil, and again, we're in single-digit percentage penetration here. So very early days in those markets at a very tight price corridor.

## Tony Wood Executive

Mark, so in COPD Nucala, MATINEE is the study you referred to. It's ongoing, and we expect it to read out at the end of the year. To get to your questions, it's a broader population. We've included emphysema as well as chronic bronchitis phenotypes, that's important because of the 500 million individuals with COPD, about 30% of them present with an emphysema phenotype. We're also excluding any current or prior diagnosis [indiscernible].

That was important given the nature of the CRL for the previous studies. And I think [ it's way far ] just pointing you to the data that we disclosed at ATS, which was a post-hoc analysis of those previous studies shown that in that broader population, we see a 24% reduction in exacerbations. It's also important to stress that this is a 2-year data set in an area in which quality of life is also important over and above headline reduction of exacerbations.

## Emma Walmsley Executive

Great. Thanks, Tony.

# Nick Stone Executive

Okay. We'll take our next question from Kerry Holford at Berenberg.

# Kerry Holford Analyst

On Arexvy, just thinking about underlying demand into the next winter season. When does the contracting process start for the upcoming season? Is that something you're already engaged in? And how might the arrival of a third competitor in Moderna impact that process, the competitive landscape? And then just a quick follow-up on Shingrix.

Can you quantify the exact amount that was booked in Q1 relating to the Zhifei agreement in China?

### Emma Walmsley Executive

Well, Luke, continue on this, please.

### Luke Miels Executive

Yes, sure. So I mean underlying demand for Arexvy, we remain very con!dent. I mean if you look at all the market research, whether that's consumer patient awareness, which is around 86%. If you then look at measures of physician and pharmacy con!dence to -- knowledge and con!dence to discuss RSV with patients and potential people for vaccination, it's extremely high. It's in the 90s and high 80s, and that continues to be there.

So there's our con!dence and insight there behind that. In terms of the -- so I think that will ultimately be translated because there's an ideal, obviously, synergy with the "u season that we can take advantage. Our overall intent over time, as we've done with Shingrix, is to deseasonalize that to manage pharmacy work"ow. But yes, good signs there. And of course, if you look at Q1 demand, that was pretty much the same.

When you look at in arm shots as we saw in Q3 of 2023, so good sign. In terms of contracting, everyone is very busily doing that. But I don't think anything will be ultimately consolidated until we see the June ACIP outcome, which is linked to the other part of your question, which is the presence of Moderna and the impact there. So if you can imagine, you're a pharmacy chain, you want to see whether at a, is there going to be 2 or 3 vaccines. Does anything come up in terms of subgroups, for example, asked for 50-59, further discussion on GBS and other topics.

And also, yes, what's the interpretation of the data Moderna has. So all these are moving parts. Once we get through that, then I think there'll be a race for lock down contracts as we go into the season there. In terms of Zhifei split with Q1, we don't break that out for China. But the main thing to remember is if you think about phasing, just your modeling.

Q1 is where we get orders. There's nothing in Q2, very limited as we ship. And then Q3, you'll see [ bolus ] and then very little in Q4 -- sorry, it's Q3, nothing in Q3 and a lot in Q4.

## Emma Walmsley Executive

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

## Nick Stone Executive

Next question will now come to Graham Parry at Bank of America.

## Graham Parry Analyst

So !rstly, on Shingrix, just if you can just help us understand U.S. dynamics. So obviously, scripts were down. If you could just help us understand what's going on in the non-retail segment there. Is that stabilized or even growing again now?

And on your peak sales guide there, I think it's still just GBP 4 billion by 2026. It looks like you have a !ghting chance getting there this year, certainly '25. So just any thoughts on if and when you might have data on that? Do you need to see your supply issues in China sorted to get more con!dence in Zhifei growth above the contracted volumes? And then on Arexvy, can you help us understand where the total penetration rates that you see are now between yourselves and P!zer in the comorbid and the over-80s population where risk is greater?

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

## Emma Walmsley Executive

Okay. Well, the back to Luke, again. I would just say, Graham, that we're not going to update

our peak year sales forecast for Shingrix. It's more than [ 4 ] over time. Obviously, we just had another record quarter, which is great and really excited about what's coming for Zhifei.

But we -- as Luke said, we're contracted for 2.5% over the next few years, and we're hoping to be more ambitious to that. But Luke, do you want to comment speci!cally on the Shingrix?

# Luke Miels Executive

Sure. And Graham, on the supply, we're trying to -- it's a 2024 e#ect. There was a slight tweak in the process that the Chinese regulator required. We've done that. And then now we're shipping.

So that's the key thing. We're uncapped in '25 and '26 and hopefully beyond. Okay. So there's some structural things that have occurred here. So the main element, as I said in the earlier part of the call was the Q1 '23, you saw a bolus of people who are waiting for co-pay to be removed.

And so that was our highest retail TRx order with Shingrix. So it's a tough comparator for the TRx retail. Now your question was obviously about nonretail. I mean if you look at the trends last year, we averaged at about 1.3, 1.4 a quarter in shops with Shingrix, whereas in quarter 1 was about 1. And what is happening is because the administration costs and the paperwork around the co-pay, we're just seeing the structural shift of physicians just saying that the patient looked a lot easier if you just go next door with the pharmacy and get your shop there.

And so that shift has happened. We have actually recovered some ground in terms of growth in terms of penetration in the centers beyond the 2 core ones, the 3 core ones we had. But we are pushing against this tide, which is just much easier for everyone if they go next door. Now the challenge is when they go next door in quarter 1, the pharmacists are very clear in terms of the market research. Their priority is "u RSV, so a little bit of a victim of our own success there and COVID.

In quarter 2, we expect that, obviously, as we move to the summer months, they're all signaling very strongly, that they expect to move Shingrix up, and we've actually seen that in terms of stocking levels in pharmacies. Wholesaler levels are stable, but we've seen the pharmacist start to build the stock up. So when we see that there's clearly an expectation of a shift to start vaccinating those patients there. So that's encouraging. I think I've covered everything.

# Emma Walmsley Executive

Yes. Anything you want to say on the Arexvy penetration?

# Luke Miels Executive

Yes. Yes, sorry. I mean I think our strategy has been very clear, which has been to concentrate on the comorbid individuals, and we have outstanding market research there showing the intent of pharmacists and doctors to discuss this with patients and vaccinate them. And when you look at the #1 reason someone recommends Arexvy, it's e\$cacy and its e\$cacy in these populations. But we're very much in the early days.

But that initial penetration, the bulk of that is those high-risk informed individuals that have gone in there. I don't have the exact percentages in front of me, but yes, it's about 80% of those people are comorbid older individuals. So there's 65-plus where there's a lot less than that 60-plus. And of course, if we can get the 50 to 59 comorbid, that's a nice growth opportunity for us because they're just as aware of their risk as is their physician with these [ comorbid ] individuals.

## Emma Walmsley Executive

And that's 15 another million American in the at-risk comorbids from 50 to 59, which is an exciting prospect.

## Nick Stone Executive

Now we're going to come to UBS and Jo Walton. Jo Walton, you are on mute.

## Jo Walton Analyst

Three quick ones, please, or 2 related. Just if you could tell us a little bit more about AMP Cap. Trelegy did extremely well. Can you con!rm that there's no bleed across in terms of rebates, et cetera, that is going to impact that and that, that is continued. I wonder if you could also just talk about Zantac litigation.

You -- we've now had one case that has gone to trials where you have previously been settling and you haven't settled that one. And we now see lots of potential cases and a Sargon set of cases coming out in California. We're just wondering if there's any time frame or any update as to when you might be able to resolve this situation.

#### Emma Walmsley Executive

Okay. Well, I'll come to Luke in a second on AMP Cap and rebates o# the back of another quarter of absolutely fantastic dynamics for Trelegy. But let me make some comments on Zantac for everybody on the call. I mean, !rst of all, we remain very con!dent in our position and continue to defend the science and the facts very vigorously. Obviously, you know that since 2019, there have been 16 independent studies that have been categoric in showing no causal link between ranitidine and cancer and the extensive review to the FDA and the EMA as well.

Now obviously, Jo and others, you would not expect me to comment on the speci!cs of our legal strategy and especially with ongoing and current cases. But I do want to also emphasize and remind everyone that the upcoming Daubert hearing is purely a question of visibility of evidence. Absolutely nothing whatsoever to do with any judgment on liability. And we are very focused on, as I said, defending our position vigorously. And in the meantime, this team and the whole organization is really all about delivering on our operating performance, our momentum for growth and continuing to invest for growth as well in line with our capital allocation priorities.

So that's as much comment as I'm going to make on Zantac today. Luke, would you like to come back to AMP Cap?

## Luke Miels Executive

Yes. Thanks, Emma. Jo, I mean Trelegy is really quite separate from AMP Cap. I mean the drivers there are the momentum around the gold guideline changes, commercial execution, and we have a very strong team in the U.S. A very simple messaging there.

I mean we have around 64% of those patients who are on triple therapy with COPD and about 67% with asthma in the U.S. So very strong penetration there, and you've still got a sizable proportion of individuals who are not responding to treatment. So between 40% and 60% of patients still exacerbate depending on which numbers you look at, which is good for Trelegy and could be very good for Nucala and depemokimab long term. In terms of AMP Cap, I mean, the numbers that we've given in the past are still the same. We had a USD 150 million e#ect at the end of 2023.

If you look at broader exposure for the rest of 2024, it's still around USD 550 million. I mean, I think to be fair, we did better than we were expecting in quarter 1. Some of the strategies that we had commercially did exceed our own expectations, which is always nice for further than the other way around. But -- and that there will be a countermove to those. And so I don't think we're going to see the full e#ect until we're talking at the half year results for the total AMP Cap exposure.

And then just back on the China question, [ Nick just helped me ] is about 20% for Shingrix sales will be in Q1 and then 60% to 80% in half 1 if you're on phasing of that [ 400 ].

#### Nick Stone Executive

Our next question from Steve Scala.

### Steve Scala Analyst

Two questions. GSK has had a strong run of under-promising and over-delivering. And for that, it deserves tremendous credit. So why shouldn't we think about the statement that H1 will be stronger as H2 as more a messaging strategy, not a true re"ection of fundamentals and just assume that H2 will be much stronger than GSK states. I've heard everything you've said about the business, but the business has great momentum.

The total turnover comps don't support your statements. So I guess in the end, the question is, why are you so pessimistic about your own business in H2? The second question is why is GSK developing an H5N1 pandemic "u mRNA vaccine? This is a just in case? Or are you hearing a signi!cant concern from health and government authorities?

## Emma Walmsley Executive

Thanks, Steve. Well, I'll come to Tony on your second question. On your !rst one, just to requote, Luke, I'd rather it that way around. But listen, we are absolutely -- and I'm going to ask Julie actually to comment and reiterate the thinking on phasing. I just want remind that on we're at Q1.

We're absolutely delighted with the start to the year. And really pleased in terms of the progress or the growth of Vaccines and Specialty, but also in the earlier as Luke just said, delivery in Gen Meds as well. And obviously, we intend to keep you updated through the year. There are some very real comparator questions, but make no mistake, the whole of this team and all the people that support these teams are very focused on maximizing the delivery that we can, whether it's this year or way beyond it. But Julie, do you want to add any more points on the items?

# Julie Brown Executive

Thank you and thanks for the comment. I think the main thing is that we de!nitely know we've got a bene!t with phasing in the !rst half. As we mentioned, we are going to annualize some very strong launches that we did in the second half last year, including Arexvy, Ojjaara and Jemperli life cycle indications. So that's de!nitely a factor. Those alone added 5 percentage points of growth in our !rst quarter, just to give you a sense of the numbers.

As Luke mentioned, secondly, we've got Zhifei in China for Shingrix, which is going to be !rst half loaded. We're expecting around 60% to 80%. And therefore, that also skews the phasing. And then I think the !nal thing to say is there are 2 factors we're very conscious of. One is AMP Cap.

I think Luke gave a good feel about the AMP Cap dynamics, and we're waiting to see how that pans out in the second quarter. And then obviously, we're entering the main vaccine season, and we have got -- we believe we've got an expanding market for sure. And as Emma mentioned, we're going to go all out to win. But we've also got a third competitor in the ring that we've got to be conscious of. So that's why we've guided the way we have.

# Tony Wood Executive

And I'll keep it short on H5N1. It's in response to health authority requests, and it's triggered by a change in the transmission associated with that variant very early. And I would say [indiscernible] quarter.

# Nick Stone Executive

Okay. We go to come to Redburn Atlantic and Simon Baker.

## Simon Baker Analyst

Two if I may, please. Firstly, on Shingrix. The very strong long-term e\$cacy data suggests that a general revaccination is still some way away. But I just wonder are there any speci!c populations where revaccination might be on the horizon? And then moving on to oncology.

[ Very ] strong performance in oncology. I just wonder how much is there left in the near term, given the strong share gain, particularly with Jemperli in endometrial. The strong performance in Ojjaara. I mean the suggestion is that doctors will be using a lot more of it in the next 6 months. I just wonder if you could give us an idea of what that near-term upside is within oncology in 2024.

## Emma Walmsley Executive

Well, oncology has obviously started extremely well. So Luke, perhaps you go to comment on that. It's still an emerging business for us, but you'll de!nitely get a lot more Meet the

Management, too. But do you want to pick up with that and then Tony will come to you on Shingrix.

# Luke Miels Executive

Yes. I mean I think, Simon, the short answer is there's plenty [ left ] around. If you look at Ojjaara and the launch you saw the chart there, market research again is very encouraging. The positioning of the product has been very deliberate in terms of targeting individuals within EMEA, which is about 40% of subjects in !rst line and 70% in second line. If you look at barriers to use, the #1 barrier, which is not a major one is I haven't used the product before, which, of course, we're happy to assist people in doing that.

And then the second one is just access and having on the [ tender. ] So that's what we're doing. If you look at early market share, I disclosed as earlier, I think are quite exciting at 14% and 28% so far. So I think, yes, very encouraging to keep that. And of course, we're accumulating these patients that have very long tails once they're on, particularly !rst line.

So we had an initial bolus of patients who are more refractory, and now we're moving into exactly the universe that we expect to see more durable usage in, which is !rst-line individuals with hemoglobin levels below about 10. In terms of Jemperli, I mean, endometrial is the focus right now. We'll cover a lot more broadly. I don't want to preempt the Meet the Management call that will cover more on the life cycle plants. So Jemperli, this is a pretty interesting and exciting work going there.

If you look at the perception versus pembrolizumab, Pembrolizumab is the easier choice, is more broadly available. People are more familiar with it, but we are seeing quite a striking shift in terms of physicians' assessment of Jemperli and willingness to try it. And as we mentioned earlier, the fact that we have a very strong hazard ratio of 0.69, and that's coming out of the FDA, hopefully, on the 5th of May. If that then means downstream NCCN guideline changes, then which you would expect with survival, then that's a further propelling for growth. And then with Zejula, again, shift to tablets, that's more of a one-o# e#ect.

But if we can just hold that business pretty stable in the U.S., which I think we can, following the label changes. And then if you look at ex U.S., we've got good growth in Europe, which is heavily volume-driven and emerging markets, we're still in the launch phase with a lot of these smaller markets. So net-net, with oncology, I think we're well placed to keep things moving, and we'll tell you more at Meet the Management around ASCO.

# Tony Wood Executive

Yes. And probably the only thing to add to that. Obviously, we have a premier OS data coming in [ this June ] as well. So -- and that will also !gure early in the year. Let me address your question on Shingrix, Simon.

So [indiscernible] followed it, the long-term followed data were exceptional with nearly 80% e\$cacy overall in the 50-plus population. Of course, what that does is underscores the value of vaccinating with Shingrix from 50 years onwards. I'd say based on the strength of the data we've got so far, there's no clear evidence as to when a booster will be warranted. But obviously, we're continuing to monitor the nature of breakthrough in particular at the -- in

average populations.

### Nick Stone Executive

So next question is James Gordon from JPMorgan.

#### James Gordon Analyst

James Gordon, JPMorgan. First question was about Arexvy revaccination and make sure I've got Luke's comments correctly. So was it that the 2-year dosing interval revaccination data is now going to be in H2? It may be an ACIP meeting in October. And this is the not study antibody titer data, so do you now have data that says with the 2-year interval?

There are much stronger -- is a much stronger boost on antigo levels. And that's what's giving you the con!dence that you'd get the 2-year recommendation even though you won't have clinical data? And then the second question was just a couple of one-o#s that Luke and Julie mentioned. One was Shingrix, U.S., I believe, was down 4%, but there was some pricing on prior inventory moves. So is that a clean trend?

Or could Shingrix in the U.S. still be down teens for the year? And Gen Meds looks like there could be a bit of a one-o# as well. So I think it grew 1%, but you're saying down mid-single digit. So the extent which Gen Meds has a one-o#?

And then also just gross margin that's very good up [ 20 bps ], but you're going to have higher Arexvy sales in H2. So can we say the Q1 gross margin and then give a boost from more of Arexvy sales in the second half? Or is there something one-o# there at all?

## Emma Walmsley Executive

That's at least 4 or 5 questions in there. Anyway, I'm going to come to Julie !rst on gross margin. Then, Tony, if you could talk about the 2-year, 3-year data. Just clarify that. And then Luke will come back to repeat on the Shingrix and Gen Meds questions that have been raised.

#### Julie Brown Executive

Thank you. Thank you, Emma. It is de!nitely the product mix. So because we had such a strong half in the second half of last year, largely based on those launches, which, as you know, specialty care and vaccines, a high margin. Because we had Shingrix, we had Arexvy and we also had Ojjaara and Jemperli life cycle.

They signi!cantly change the gross margin. And we'll be up against those in the second half of this year because they were new launches. So that changes the dynamic in gross margin overall. We also have the stocking e#ect, of course, last year. I think that was gross margin down.

#### Luke Miels Executive

Yes. So Tony or me?

#### Emma Walmsley Executive

We get that.

# Luke Miels Executive

Yes. Okay. And look, I think I don't want to repeat myself on Shingrix U.S. I mean the key thing is there is a structural shift out of nonretail to retail. We're addressing that.

We've also said as you go up that curve of adoption, you have to work harder for those patients, and that's what we're doing. But if you look at it last year, we increased the penetration by 7%. So if we can keep adding 1 -- 1-plus percent each quarter, then it's still big numbers, James. And I think as I said earlier, you'll see pharmacists start to switch on and come back to vaccinating Shingrix instead of the respiratory vaccines as we come out of winter in the Northern Hemisphere. So I think still lots of reasons to be balanced and certainly not double-digit pressure.

And then also, again, the strategy has always been with Shingrix, which is to saturate the U.S. and then move into Europe, which, again, the extended e\$cacy data helps us, which is when we're negotiating with payers that haven't got national tenders like we are right now with France. The fact that you've got this outstanding e\$cacy at 11 years is really compelling value for money for these governments. So that's very helpful. And also for individuals paying out of pocket.

And then, of course, we mentioned China. So the strategy that we've had of U.S., Europe, emerging markets is very much in place.

# Emma Walmsley Executive

With prices maintained [indiscernible] .

#### Luke Miels Executive

Exactly with very disciplined pricing corridors. And then ultimately, I mean, we mentioned booster, which may only be a subset, but there's also the exciting work that we're looking into with dementia which, again, I think you have to rewrite the penetration rates in a few years' time if we did demonstrate a prospective outcome on that one. In terms of General Medicines, look, I mean, the way to look at AMP Cap about a 4% drag. So if you factor that in, I think we're still very much in with the range that we've talked about. We did see an e#ective product like Augmentin, a good season in Japan with Hay fever.

So these will start to wash out over the year and the more typical structural e#ects in General Medicines will keep that. And the fact is when we get up in the morning, our !rst priority, of course, Vaccines and Specialty care, General Medicines in terms of resources, everything by de!nition has to be third on that priority. So we can grow in other areas that's where we're going to spend time, money and e#ort.

#### Emma Walmsley Executive

And the super contribution to the mix as we said. I mean -- we are now at 2/3 of the business. It's one of the most important structural shifts in the company and is what is helping to drive leverage for us is this move to where innovation can either be truly unique sustained and an enormous demand because of its direct returns in prevention and vaccines or real breakthroughs in step changes in care and prevention in specialties we're seeing with the

pipeline that's coming through. Tony, do you want to talk about that.

### Tony Wood Executive

Yes. It's very high level. I'll walk you through the considerations for the season 3 data, James. So !rst of all, just to remind you, an ACIP decision is very unlikely before '25. And that's because the !rst subjects to receive the commercial vaccine are protected through the '25 season.

So whether or not you revaccinate, that can wait until '25, '26 season. There are 2 important data "ows running into that. One is the vaccine e\$cacy study 006, that is dependent on the season. And the Northern Hemisphere '23, '24 season has not yet !nished. That's a CDC decision.

It's a global study and that is what is behind the move of the data into the second half. The second data "ow is the immunogenicity study, that's 004, and that is on track to report out in the second half. It includes a number of di#erent revaccination schedules. I don't want to get into the detail on that. Safe to say that what we're seeing there from earlier data as is expected, which is the longer you wait between vaccination, the greater the boost.

### Nick Stone Executive

Okay. We're going to come to Emily Field at Barclays.

### Emily Field Analyst

The !rst one is Gilead last week talked about the impact of the Part D redesign on their HIV business, resulting in "at growth for 2025. I was just wondering if you could give any color on how you're expecting that to impact your own business in '25. And then secondly, just on Blenrep. Before it was removed from the peak sales guide. I believe it had been for a guidance of over GBP 3 billion in peak sales and now having DREAMM-8 and DREAMM-7, I was awaiting the data from DREAMM-8.

Could you talk about perhaps expecting when you may add that in or characterize sort of how that peak sales opportunity may have changed with the new indications?

# Emma Walmsley Executive

Thanks, Emy. I mean just on the peak year sales from Blenrep, we're obviously not going to be updating that today. We explicitly -- and it's an interesting reference point to look at '21 when we were talking about earlier lines. But we have new data, the exciting data that's come through. We're going to be presenting at ASCO.

Tony, Luke and their teams will update you at Meet the Management about how we see the path forward. But we've obviously got a journey to go on with the regulators. We're very engaged in that. But clearly, what we're interested is in the step change of impact for patients, and that could be very exciting. And we'll keep you updated along that journey in due course.

Deborah, excited to have a question on HIV. So perhaps you could comment. We don't guide by asset by year, but we have factored this into our broader outlook. And Deborah, can you give a bit more color to that, please?

# Deborah Waterhouse Executive

Thanks, Emily. So the !rst thing to say is, we're obviously delighted by our growth in Q1, which was 14%, and we're particularly delighted because as I said earlier, 50% of our growth, our pound growth came from long-acting injectables and the momentum behind those medicines is continuing to be extremely important today in driving growth and will continue to be important together the decade as our pipeline, which is long-acting injectable orientated continues to make great progress. In terms of 2025, so we believe that the IRA, Medicare Part D redesign, will have an impact of about GBP 200 million next year. So it will be a drag. But actually, as you can see, our growth is -- our growth and our momentum is very strong.

So it will have a headwind, but we believe that's manageable and has already been factored into all of the guidance we've given, including our upgrade last year to our 5-year CAGR '21 to '26 being 6% to 8% growth and more than 7% at a group level.

# Nick Stone Executive

Thanks. I'm mindful of the fact that we are at the end of the call, so we're going to run for another 10 minutes. We do have 5 individuals with hands raised, so we can [indiscernible] get through as many of these as possible if we can keep both the question and answer concise, then hopefully, we'll get there. So Richard Parkes will come to you, please next, BNP Paribas.

# Richard Parkes Analyst

I just want to push a bit more on the RSV revaccination potential. It's my understanding is that you'll no longer have vaccine e\$cacy data for patients having received a booster before season 3. So we're just going to have immunogenicity data. So I'm just wondering about how con!dent you are that ACIP will make a recommendation based on just immunogenicity data when the previous booster data, we're sure, showed no additional bene!t from [indiscernible] season 1? So that's the !rst question.

And then second on -- just on Shingrix, just to round o# the discussion. So in Europe, growth is slow to single digits. I'm just wondering is that just a capacity allocation? Or could we expect to see a sort of reacceleration in growth for Shingrix in Europe?

# Emma Walmsley Executive

Okay. Quick answers. Tony and then Luke.

# Tony Wood Executive

Yes. So ACIP will make a decision this year, and it will be on vaccine e\$cacy from 3 seasons and immunogenicity when we present those data together.

# Emma Walmsley Executive

Thanks. Luke?

Luke Miels Executive

Yes, it's very much driven as we open up tenders. I said we're in discussions with France right now. We've got a very good rating in tough system and another of the smaller European markets are starting to open up. So I would expect growth in the second half to be encouraging.

### Nick Stone Executive

We'll take the next question from [indiscernible].

#### Unknown Analyst Analyst

Sorry, 2 more for Luke, Pete [indiscernible] here from Citi. On the IL-5 franchise, we're assuming biologics penetration in severe asthma, currently around 20% to 30%. Just interested to hear whether you had more precise data and thoughts or hopes where penetration could peak out? And then secondly, the mepo COPD data does play out as you hope in terms of target clinical pro!le. How are you thinking about biologics penetrating in COPD.

I mean, can the ramp be quicker than what has been seen in asthma in line with pulmonologist already being experienced in biologics? Or would you take a more cautious view given the novelty of biologics as a treatment option in COPD?

#### Luke Miels Executive

Yes, Peter. I mean, I think -- look, your numbers are very consistent with what we see in terms of tracking insurance databases, ATUs, physicians, surveys, et cetera. If anything, physician surveys, they tend to overstate their usage, I think this is part historical. I mean there are lots of parallels we've seen, of course, with TNFs and rheumatologists. When you see more recent graduates that have been trained and employed antibodies throughout their training, they're more comfortable with the utilization.

You've also got the evidence trend is moving in our favor. There's an emerging and we've done some good studies here and plan to build on this around the capacity to drive remission through earlier intervention with antibodies. So with IL-5, in particular, Nucala, we published on that. So I think that's all working in our favor. With COPD, my expectation is, yes, they would use it more actively because they've had a number of years' experience in asthma subject.

So let's see, of course, it's going to be driven by the strength of the data. And of course, we have huge synergies with Trelegy, Arexvy and the COPD treatment group. So yes, let's see.

#### Emma Walmsley Executive

Obviously, we're going to [indiscernible] the Nucala, but then we have play in the rest of the longer-acting IL-5s and also the deal we closed this quarter in terms of where other technologies can take us.

#### Nick Stone Executive

Peter Welford at Je#eries.

# Peter Welford Analyst

I'll stick to one question. Just curious on Arexvy with regards to the 50- to 59-year-old. Your degree of con!dence that you'll get a positive CDC ACIP review of that, given some of the prior commentary the earlier this year. And obviously, not in the approval, but we're just thinking about the ACIP rather than FDA and I'd love related to that, any commentary you have on the recent headline data we saw for an 18- to 59-year-old cohort from your competitor? And whether do you think there's any commercial risk from the 18- to 50-yearold cohort that there is there?

# Emma Walmsley Executive

Tony?

# Tony Wood Executive

Yes. So just quickly then, Peter, FDA accepted the submission, we got a PDUFA date for June. So it will be available for ACIP and as Luke mentioned, in the 50 to 59 population, we are focused on high-risk individuals. The data is just as strong as the 60-plus population. So I think we're in good shape for that particular decision.

And then remind me what the second question...

# Emma Walmsley Executive

Well, Luke will take the second question.

#### Luke Miels Executive

Yes. I mean I think the other thing to factor in, Peter, is you've got 7 new ACIP members now on a new chair. So the question will be, will you see we see a change in behavior? Now if you look at the 18 to 59 with P!zer and the commercial consequences of that, I mean, in the end, the bulk of this volume is going to be driven by retail business, 90% and that's older individuals. And we've seen that pattern again with Shingrix.

Remember, we've got the [ ISE ] label 18-plus there, and it's a small number. It does help with contracting, but the 50 to 59 for us also helps with contracting. The younger individuals are more likely to be -- the non-Medicare population are more likely to be treated in the retail, e.g. [indiscernible], et cetera. So not too concerned about it at this point.

And we're the !rst to submit a !le in that adult -- in the 50 to 59 adult population.

### Nick Stone Executive

Okay. Next question will come to Tim Anderson at Wolfe Research.

# Timothy Anderson Analyst

On depemokimab, just your con!dence in the level of -- in having compelling data. And then your excitement about the commercial opportunity. To me, it seems like twice your injection would be quite compelling to make it the category leader, but maybe that's unrealistic. I can't really ever tell how excited you are about that program, partly cannibalizes Nucala. And then

just Blenrep, pretty clear coming back to market.

Do you think we're just completely passed there being any commercial considerations on the [ EyeTox ] issue? Would you still think that's going to be something to contend with given what else is available out there?

### Emma Walmsley Executive

Okay. Well, listen, thanks, Tim. First of all, I'm going to come to Tony and then Luke in a second on depe, which obviously the readouts are coming this coming quarter. And also, we can hear on Blenrep and the commercial impact around [ EyeTox ]. But let me start by simply saying it's hard for [indiscernible] excited.

I'd refer everybody to the Meet the Management that was done speci!cally on respiratory, when we were clear, we thought the [indiscernible] and IL-5s led by long-acting and a lot of great data and research that I'm sure Luke can repeat, means we think this is a very important pillar for us and one of the most, Julie mentioned earlier, important unlocks for us to see. But Tony, do you want to...

# Tony Wood Executive

So just to remind you, full data set available at the end of this half. So we'll update you on it next half. Con!dence in the data comes from a very clear PK/PD relationships from our new color experience. And I'd leave it at that actually rather than get any more details.

# Luke Miels Executive

Yes. So -- yes, I mean it's really interesting. I am excited about depemokimab. This is [ very ] excited, Tim.

### Emma Walmsley Executive

[indiscernible] enthusiasm.

# Luke Miels Executive

Exactly, max enthusiasm. So yes, you've got a validated mechanism that physicians you're aware of, you've got this trend towards remission. You've got a Part B component, which obviously has certain incentives in the U.S. environment, which is encouraging. The physician has total control of compliance, and we know from our market research that patients would prefer something twice a year versus 26 times a year or 12 times a year or 6 times a year.

So yes -- and then the other important thing is we've compacted the life cycle management to all the indications EGPA, nasal polyps, et cetera, are arriving within 2 years of launch in contrast to Nucala with the exception of COPD with -- in contrast to Nucala, which is multi 6 plus years. So quite exciting. In terms of Blenrep, we'll present some interesting data at ASCO. As you know, hematologists, oncologists are very comfortable managing toxicity. I think the main question historically was around the appropriate dose and the scheduling.

We've got a lot more insight from that from DREAMM-7, DREAMM-8 and also some of the Phase IV work that we've done. So no doubt we'll cover that in more depth. But I think we've got a di#erent picture and then also helpfully !rst line with the MRD shift with the FDA is also helpful in terms of life cycle management of Blenrep and compression of launch time frames.

# Tony Wood Executive

Yes. Just to add to that, reversible, transient and manageable, those are the 3 words to think about. And I'll point you to the !rst-line ISS study interface that was published at the European myeloma network in April, if you want to get a sense of what sits behind those 3 words.

# Nick Stone Executive

In spirit of keeping this at the time I said, I think we'll have to close the call there. So Emma, anything you want to just add in terms of closing comment.

# Emma Walmsley Executive

Just to repeat a very strong start to 2024, another quarter of excellent performance and critically continued pipeline progress. And this whole team and all that support remain very strongly committed to delivering our potential and more. So we look forward to catching up with many of you on calls in coming days and over the months ahead.