GSK plc Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Performance: Group sales up 4%, core operating profit up 5%, core earnings per share up 5% to 44.9 pence. Cash generated from operations over £1 billion. Dividend increased to 16 pence, and £2 billion share buyback commenced.
• R&D Progress: Two FDA product approvals secured in 2025. Acquired IDRX for oncology. Pipeline includes 14 key opportunities with peak sales >£2 billion. Innovations in ADC, HIV injectables, and respiratory vaccines.
• Regional Performance: Europe up 11% in sales, U.S. up 4% but impacted by IRA headwind.
• Manufacturing: Groundbreaking on new manufacturing facility in Marietta, Pennsylvania.

Segment Performance

• Specialty Medicines: Grew 17% in Q1, driven by respiratory immunology and inflammation, oncology, and HIV. Contributes significantly to overall sales growth.
• Vaccines: Sales down 6% in Q1. Shingrix sales declined 7% (impacted by U.S. and international factors, but Europe saw growth); meningitis portfolio up 20%; Arexvy sales down 57% due to comparator and ACIP restrictions.
• General Medicines: Broadly stable. Respiratory sales up 1% driven by Trelegy; Blujepa approved with plans for Urogenital gonorrhea indication.
• HIV: Sales grew 7% driven by Dovato, Cabenuva, and Apretude. Long-acting injectables showed strong growth.

Guidance

• 2025 sales growth expected 3%-5%, operating profit and EPS growth 6%-8%. Royalty income higher than guided at £750m-£800m. Anticipate three more FDA approvals in 2025 (Nucala COPD, Blenrep, depemokimab).
• Confident in 2025 being a year of profitable growth despite macro uncertainties.

Risks

• Potential sector tariffs could impact business. Supply chain resilience and productivity initiatives needed to mitigate risks. Impact of ACIP recommendations on vaccine sales, especially for Arexvy.

Question and Answer

• Q: New launch expectations for Nucala COPD, Blenrep, etc. A: Discussed launch plans, data, and potential barriers like ocular toxicity for Blenrep and ACIP recommendations for vaccines.
• Q: Impact of tariffs on GSK. A: Prepared with supply chain resilience, product mix shift to higher margin specialties, and productivity initiatives.
• Q: Vaccines market in U.S. and RIVAX. A: Cautiously optimistic, ACIP approval for Penmenvy, base case for RIVAX revaccination in 2028.
• Q: SG&A and tariffs. A: SG&A growth controlled through focused resource allocation and productivity, supply chain dual sourcing to mitigate tariff impacts.
• Q: PrEP market and BD priorities. A: Apretude performing well, ongoing BD activity with interest in potential opportunities despite macro uncertainties.
• Q: Blenrep REMS and capital allocation. A: Monitoring FDA interactions on REMS, ongoing BD focus with interest in potential opportunities.
• Q: Long-term HIV strategy. A: Focus on long-acting injectables, with progress in pipeline assets like VH184, and monitoring oral competitors.