Good afternoon, ladies and gentlemen, and welcome to the Analyst Call on the GSK First Quarter 2021 Results. I will now hand you over to Iain Mackay, our CFO, who will introduce today's session..

Thank you. Good morning, good afternoon. Thank you for joining us for our first quarter 2021 results, which were issued earlier today. You should have received our press release and can view presentation on GSK's website. For those not able to view the webcast slides that accompany today's call are located on the Investors section of the GSK website.

Before we begin, please refer to Slide 2 of our presentation, for our cautionary statements. Speakers today are Emma Walmsley, Luke Miels, David Redfern and Brian McNamara and myself, Iain Mackay. Joining us for the Q&A portion of the call will be Dr. Hal Barron and Roger Connor.

We request that you ask a maximum of two questions so that everyone has a chance to participate. Our presentation will last for approximately 30 minutes in order to maximize the opportunity for questions. And with that, I'll hand the call over to Emma..

Thanks Iain and a very warm welcome to you all. We continue to deliver on our strategic priorities and remain very focused on creating significant value for shareholders with the launch of two new global companies next year.

Both companies have the opportunity to improve the health of billions of people and we're confident that both will offer strong performance in 2022 and beyond. For 2021, our focus is on execution and delivering this very significant change for GSK.

I'm pleased to report that we're on track, both on plans to separate and to deliver financial guidance for the year. So turning to the quarter, our financial results were impacted by comparisons related to stocking in Q1, 2020 and disruption from the pandemic. First quarter sales and adjusted EPS were down 15% and 33% respectively at CER.

We expected a challenging start for the year, but with these pandemic impacts starting to reverse in the current quarter we are confident will deliver a very different performance in the second half of the year and Iain is going to go through this shortly.

Turning to our strategic priorities, we continue to see progress on each of innovation, performance and trust. In innovation, we strengthened our growth outlook on several fronts. Firstly, we are reshaping the landscape of HIV treatment with the launch of Cabenuva, the world's first and only [technical difficulty].

We achieved important regulatory milestones with the approvals of Rukobia and Dostarlimab and Jemperli and a positive CHMP opinion on Benlysta. And we started Phase III programs for two major pipeline assets, our RSV vaccine for older adults and 294, our long-acting IL-5 antibody, which builds on our Nucala success.

We also made progress in our COVID contributions including reporting strong data for antibody VIR-7831. Of course, it's never all progress in drug development and the news received this quarter to the ICOS agonist was disappointing.

But it should be seen in the context of GSK developing more than 10 novel oncology pipeline assets as well as the broader pipeline progression a significant shift from where we were just a few years ago.

In performance, the underlying momentum of our growth drivers is strong, albeit overshadowed short-term by the COVID driven impact on the wider portfolio. This reflects transformed commercial capabilities as you're going to hear shortly from Luke, David and Brian.

Shingrix is an outstanding product and continues to have a very large opportunity ahead of it. This quarter prescription trends were heavily impacted by the rollout of government COVID vaccination programs.

Looking ahead, we continue to expect, and we'll be driving a recovery for Shingrix and a wider vaccines business in the second half of the year given the encouraging pace of deployment of COVID vaccines in the U.S. Alongside commercial delivery, we've made excellent progress on our Future Ready program.

The commercial integration of consumer health is now broadly complete. We've generated more than $1 billion in net proceeds through tail brand divestments and separation activities are advancing well. We also continue to streamline our pharma portfolio and this quarter we announced an agreement to divest our cephalosporin business.

And lastly on trust, our focus remains on maintaining leadership across all areas of ESG. And this is evident again this quarter with actions taken on environment, global health and diversity representation.

We look forward to driving momentum in all three core priorities and to delivering a significant improvement in financial performance as the year progresses. Before I hand over to Luke, I want to highlight what we will share with you at our Investor Update on June 23.

We will provide you with a clear view of the strategy for new GSK, its outlook for growth and the opportunities we see for shareholder value creation. As part of our strategy will give clarity on our target therapeutic areas for investment, will give revenue outlooks for the next 10 years with greater outlook detail for the first five years.

We will set out how we expect to deliver competitive performance. This will include deep dives into new growth drivers including key R&D pipeline assets as well as deeper visibility of new GSK's key capabilities and technology platforms.

We will also outline our capital allocation priorities and provide you with details on our expected dividend policy. And lastly, we will set out in more detail the timing and approach of separation. We are very aware the GSK shares have underperformed and will demonstrate how we are building shareholder value in new GSK.

With the foundation of deep change in progress made in the last few years, we believe we've developed a compelling vision and outlook to share with you and we hope as many of you as possible will join us on the day. With that I'll hand on Luke..

Thanks, Emma. We continue to make great progress on commercial execution and competitiveness in the quarter with strong share performance across our key and new specialty growth drivers.

As expected, the performance across our vaccines business was disrupted heavily by the pandemic and let me start first with an update on Shingrix for which we remain confident for a recovery in the second half. Shingrix sales declined by close to 50% in the quarter reflecting the expected headwinds we highlighted in our last quarterly earnings call.

The prioritization of the public health systems to focus on pandemic vaccination deployment has led to significant disruption in Shingrix prescriptions. This has been most in evidence in the U.S.

where the CDC has recommended a 14-day window either side of receiving COVID vaccines effectively creating a two-month no go period for administration of other vaccines. We are seeing similar disruption in other key markets including Germany and China. The encouraging news is that the pace of administration of pandemic vaccines among U.S.

adults has been rapid, especially those in the target age group for Shingrix. By the end of the second quarter, we expect the majority of the 50 plus age group will have been fully vaccinated. Further with two-thirds of those 65 years and older in the U.S. fully vaccinated for COVID.

We are seeing a weekly rolling four week NBRx increase of 27% in this population versus the prior period attributed to an increasing proportion of Shingrix eligible consumers we have progressed beyond the COVID vaccine period.

This backdrop supports our confidence in the second half recovery in Shingrix and we've been enacting strategies to drive this recovery. For example we've been partnering with U.S. retailers to rollout for minor programs the eligible adults to come and encourage and retaining them to the pharmacies two weeks following their final COVID vaccine.

And we've been seeing encouraging market research data suggesting that eligible adults are intending to return for Shingrix vaccine within one to three months.

On a global basis, we've been working hard to ensure that we have a strong supply position to leverage the expected upswing in demand, as we are in the process of doubling our number of launch markets in 2021. So to summarize, we continue to believe the disruption to Shingrix is a timing issue.

With strong underlying demand, we continue to expect Shingrix growth to be weighted to half two and assuming we progressed towards more normal operating conditions in our key markets. We expect a significant step up in Shingrix sales in 2022.

Moving onto the medicines portfolio, our recent product launches with and lifecycle innovation again delivered as key drivers of growth in the quarter. Starting with oncology, we continue to make inroads with Blenrep in its second full quarter on the market.

Blenrep is the only anti-BCMA therapy administered through an off-the-shelf infusion and we've had positive feedback from ADCC as they gain increasing familiarity and confidence in the management of corneal events.

We've now more than 1,200 healthcare sites set up with more than 1,000 patients enrolled in the REMS program in the U.S., and more than 1,200 patients treated globally. Early uptake has been driven by myeloma experts and academic medical centers and we're now expanding our reach into the community setting.

We also continue to expand Blenrep globally with launches gathering pace in Europe. On Zejula, significant market share gains were offset in revenue terms by the suppressed ovarian cancer market and this is one of the many tragic consequences reported further as patients remain undiagnosed.

Since Q3, debulking surgeries are down 20%, which has impacted the number of patients initiating chemotherapy you can refer to this in our backups slide. In terms of new patient share we're up to 51% and our share of voice among HCPs is the highest in the class, now 52%.

We've worked hard to drive awareness and we are pleased to see that watch and wait in the US has decreased to 16% and patient awareness of maintenance therapy has increased from 29% this time last year to 45% in early 2021 these indications of positive progress. Outside the US, we seen growth launches in Germany and the UK.

Looking ahead, the impact of reduced surgeries will likely continue in the short term, but as dependent stabilizes, we would expect to see a return of the diagnosis debulking surgeries and chemo initiation and a consequent return of sequential Zejula growth.

Moving to respiratory, Trelegy performed very strongly with sales up 35% in the US, led by the US. Less than four years from launch, sales are now annualizing at about GBP1 billion. We continue to lead the total triple market with share three times higher than the number two and that indication in the US is proving to be a key differentiator.

Since the launch of the asthma indication, we've seen a 65% increase in asthma patient share and in Q1, new to brand prescriptions from allergist quadrupled. Outside the US, the NRDL listing in China started to take effect in March and in Japan our second largest market we are now the leader with 76% market share.

We're also excited about the continued growth opportunities with Nucala and we are now the leading IL-5 across the broadest range of eosinophil-driven diseases in all major markets. First quarter sales grew 26% and like Trelegy and now are annualizing at about GBP1 billion.

A lifecycle innovation to Nucala with indications HSE, GPI and FCA then expected approval in nasal polyps later this year has been a key success driver in helping more patients receive therapy. In addition, we believe the categories in which we compete are still very under-penetrated.

With only 28% eligible SCI patients currently receiving a biologic in the US and less in other major markets. While on the slide, I also wanted to highlight the fantastic performance we've seen from Benlysta where we again drove double-digit growth after 10 years on the market.

Let me now hand over to David to talk about the great performance of Dovato and the major potential of cabotegravir..

Thank you, Luke and hello everyone. First quarter HIV sales declined 11% reflecting a strong Q1 2020 comparator which benefited from around GBP100 million in stock build and the timing of an international tender. Adjusting for these factors, Q1 sales would have been broadly flat versus the prior year.

Looking ahead, we expect these phasing impacts to reverse in Q2 and we remain confident of delivering our full year growth objectives. On a strategic level, our HIV business has been a first mover in the development of two drug regimens and long-acting regimens.

In recent months, we've seen a validation of this strategy by competitors who are now shifting their focus in both of these directions and long-acting injectables we have at least a five-year head start versus the competition. A market, which we believe will grow significantly in the coming years.

Importantly, our new products Dovato, Juluca, Cabenuva and Rukobia, now make up 25% of our HIV portfolio. Turning to Dovato, sales more than doubled in the quarter [technical difficulty] and is key driver on track towards the $1 billion in sales.

Our leading share of voice in the US and Europe and the US label inclusion of the TANGO switch data has helped to drive Dovato share of the switch market to approaching 20%. The growing momentum behind Dovato in Europe has also been reflected in strong and increasing market shares across the EU5.

Moving to our injectable portfolio, we have a rich stable of long-acting assets centered around cabotegravir. This is a foundational medicine with incredible potential and patent protection beyond 2030.

In February, we launched Cabenuva in the US as the first and only every four-week treatment for patients living with HIV and we have submitted a supplemental NDA for every eight-week dosing.

Early indications from HCPs and KOLs are positive, but it fulfills a real unmet patient need replicating the market research and clinical trial findings We were particularly pleased with very high level of prescriber attendance at the recent national Cabenuva launch broadcast with strong levels of engagement and positive sentiment.

The European launch with every eight-week dosing will be underway in the coming weeks under the brand names Vocabria and Rekambys.

Turning to prevention, the 083 and 084 studies strikingly demonstrated the cabotegravir every eight weeks was superior to Dovato and preventing HIV acquisition in men and women and we are on track to submit the file to the FDA in the first half of 2021.

In summary, we remain confident in the outlook for progressive acceleration in the growth in HIV underpinned by the momentum of Dovato, the launch of Cabenuva and the expected launch of cabotegravir in the prep setting. And with that, now let me hand over to Brian to talk about consumer..

Thanks, David. We remain on track to create the world's leading consumer health care company updating on progress to date, our divestment program generating GBP1.1 billion net proceeds is complete. Resulting in a strong focus portfolio well placed for sustainable growth.

On integration, the commercial integration is largely complete and manufacturing work is underway. Separation activities are progressing well. Importantly, all of our guidance for fiscal year '22 including margin synergies remain unchanged.

Turning to Q1, the quarter was impacted by tough comparators given pantry loading across all categories last year and a record week cold and flu season resulting in Q1 continuing sales excluding brands divested and under review, down 9% at constant exchange rates.

Recognizing the unusual year-over-year comparators, two-year CAGRs are more indicative of the underlying category trends. On this basis all categories are up apart from respiratory. Overall health sales declined slightly in the quarter with a two-year CAGR of mid-single digits.

Q1 saw our continued outperformance as gum health and Sensodyne with venture care is still under pressure. Pain release saw Q1 sales down high single digits with a two-year CAGR up mid single digits. In Q1, with continued success of the Voltaren Rx OTC switch in the US last year was offset by Advil and Panadol weakness given pantry load comparators.

In vitamins, minerals and supplements, sale declined slightly in the quarter with a two-year CAGR up high-single digits. Digestive health and other sales were flat in the quarter with a two-year CAGR up slightly. Respiratory sales declined 42% in the quarter, with the two-year CAGR down in the teens.

Cold and flu remains under pressure due to continued social distancing. For example, in the US, IRI data showed a category decline of over 60% in the 12 weeks ending March 27. However, we expect more normal consumer trends in the second half of the year. E-commerce grew over 30% and is now around 7% of sales, up 2% on last year.

Our continued investment in digital capabilities positioned us well for growth in this channel. Innovation remains a key focus and an important growth driver. The success of the Voltaren Rx OTC switch was coupled with other successful innovations such as Sensodyne sensitivity and gum and new launches including pronamel enamel repair.

Turning to our power brands, seven of the nine brands gained or held share. In addition, we saw a double-digit growth in the quarter from our continuing business in emerging markets. Our fiscal year sales outlet remains unchanged.

With temporary integration activities well underway, we are well placed and I remain excited and optimistic about our journey to create the world's leading consumer healthcare company. With that, I'll hand it over to Iain..

Thanks, Brian. All the comments I make today will be on a constant currency basis, except for specify otherwise and I'll cover both total and adjusted results. Excuse me.

On Slide 14 is a summary of the Group's results for Q1 2021, we stated our full-year 2020 results that we expected Q1 performance be challenging given the strong comparator from 2020 and that's been the case as you've already heard from the team.

As such, I'll focus on key numbers performed in Q1, important consideration for Q2 and the shape of 2021 overall. Reported turnover was down 15% at constant exchange rates, total levering profit was down 8% with total EPS down 25%. On an adjusted basis, operating profit was down 23%, while adjusted earnings per share was down 33%.

On free cash flow in line with our expectations, we had an outflow of 3 million tonnes in quarter one and as noted the full-year '20 results we expect free cash flow to be lower in 2021 compared to 2020.

On currency the strengthening of sterling against the US dollar and weakness in emerging market currencies relative to Q1 2020 results in a headwind of 3% in sales and 6% in adjusted EPS.

Slide 15 summarizes the reconciliation of our total to adjusted results, we adjusted items of note for the quarter were in disposals, which largely reflected the profit on disposal of rights to the cabozantinib royalty stream and major restructuring which reflected continued progress on the separation preparation programs and consumer health care integration.

Please also note that as referenced in our Annual Report, the 2021 UK finance bill is passed and results in an increase in the UK Corporation tax rate from 19% to 25% will be a significant positive revaluation of deferred tax assets in the UK later in the year, which will be treated as an adjusting item.

My comments from here onwards and adjusted results unless stated otherwise. On this slide let me cover the key drivers of revenues and profits for the Group in Q1 compared to the prior year.

As the sales decline was informed by unfavorable year-on-year comparisons due to stocking and pantry loading the ongoing pandemic impact on vaccines and the very weak cold and flu season on consumer. Our common shortly on the drivers by business for the second quarter and for the full year.

The negative impact of sales and operating profit and margin for the Group was mitigated by continued robust cost control across the business, with increased investment in R&D contributing 215 of the total 290 basis points margin reduction resulting in [technical difficulty] operating margin of 25.4%.

R&D growth of 3% reflected continued investment in progressing our pipeline and was driven by significant increased investment in specialty medicines related to our two key COVID-19 treatment programs VIR-7831 and otilimab.

There was further incremental investment from progression of a number of key programs including Zejula, Jemperli and 294 anti-IL-5 and pharma, as well as RSV and meningitis ABCWY in vaccines. [technical difficulty] partly offset by phasing and spend on Blenrep.

Efficiency savings from the implementation of our one development program and reduced variable spending as a result of COVID-19 lockdowns. We continue to expect R&D growth for the group to be low double digits in the full year.

Lower SG&A down 15% in line with sales reflected ongoing tight control cost across the group, the continued benefit of restructuring and reduction in variable spending as well as year-on-year favorability with regards to legal costs, which contributed around a third of this decline.

With a strong focus on cost management and as I mentioned we're making excellent progress with our future ready program. I can confirm we are on track to deliver the GBP800 million savings. Following the disposal of the cabozantinib, the royalty stream, we now expect royalties to be between GBP300 million and GBP350 million in 2021.

Moving to bottom half of the P&L at highlight that interest expense was GBP190 million similar to last year and there is no change to our full year expectations of between GBP815 million, GBP900 million. The effective tax rate of 18.6% was in line with expectations and reflecting the timing of settlements with various tax authorities.

We still expect a full year rate of around 18% excluding the impact from any possible US or UK corporation tax changes. And finally lower non-controlling interest reflected Pfizer share of profits of the Consumer Healthcare joint venture.

Next, I'll cover free cash flow for the quarter before going on into more detail on how each of the overarching revenue and profit drivers in each business. In Q1, free cash flow has stepped down versus the same period last year as expected with a small cash of GBP3 million in the quarter.

This was informed by reduced operating profit including adverse exchange impacts, adverse timing of returns and rebates and increased dividends to non-controlling interests.

These factors were partly offset by a reduction in trade receivables from lower sales, compared to an increase in Q1 2020 as well as increased proceeds from disposal of intangible assets and lower tax payments. Improving cash flow continues to be a constant focus for the team.

It was worth nothing, Q2 will be much lower versus last year, which saw step-up related to higher Q1 2021 sales, which were collected in Q2, IR timing and lower tax payments. Moving on to performance in the pharma business. Slide 19 summarizes the Pharmaceuticals business for overall revenues declined 8%.

This was broadly as expected approximately half of the decline was due to prior period stocking other half due to pandemic pressures and antibiotics and generics in Japan.

The UN specialty pharmaceuticals revenue grew 3% for the quarter, reflecting continued strong commercial delivering across our portfolio partially offset by phasing in HIV as David had described.

The Established Pharma portfolio declined 17% within this established respiratory was down 11%, reflecting ongoing generic competition for Advair, Seretide and Ventolin as well as Xyzal in Japan. The rest of the Established Pharma portfolio was down 24% with COVID-19 continuing to affect demand particularly in antibiotics.

Pharma operating margin was 28.8%, the 280 basis point increase at constant exchange rates despite the revenue decline primarily reflected the dynamic side effect to earlier.

Tight control of ongoing costs reduced variable spending as a result of COVID-19 for Q1 2020 and started pre-COVID patterns a favorable legal settlement in the quarter compared to increased legal costs in Q1 2020 and the continuing benefit of the restructuring activities.

R&D spend grew 2% which partially offset those margin benefits however underlying R&D growth was higher, reflecting phasing in spend on Blenrep in Q1 2020 and efficiency savings.

With regards to Q2 consideration for pharma revenues in addition to favorable comparator due to destocking, we expect new and specialty sales to continue to grow, including HIV Q1 phasing traverse partially offsetting this will be continued pressure in established pharma.

Looking at the full year for Pharma, there is no change to overall expectations. We continue to expect flat to low single-digit percentage growth in pharma revenues excluding divestments and including high single-digit decline in established pharma.

In Q1, we announced the agreed sale of the cephalosporin the business and we continue to review our portfolio for further opportunities to sharpen focus [technical difficulty] with either completed or signed deals representing approximately three quarters of the expected cash costs of the separation preparation.

[technical difficulty] gives you an overview of vaccines performance with sales down 30%. Q1 performance was largely performed by the rapid pace of deployment of COVID-19 immunizations in the US as Luke has referenced. As a result, Shingrix sales declined 47% [technical difficulty] declined 13% and established vaccines declined 23%.

The operating margin was 25%, the reduction in operating profit and margin primarily reflected the negative operating leverage from the COVID-19 related sales decline, as well as higher supply chain costs resulting from lower demand and under recoveries in the current period and adverse mix due to lower Shingrix sales.

As noted earlier, there was also increased on the R&D investment behind our RSV and meningitis development programs. These factors were partly offset by higher royalty income in the quarter.

To reiterate what we've said previously progress in mass immunization programs and easing of pandemic conditions are the key factors in forming pace and scale of recovery in vaccines' revenues.

The advances to date this year are encouraging, particularly in markets such as the US and UK accordingly and in line with Luke's earlier comments, we expect to see progress in recovery of vaccines revenues in the remainder of the year with growth weighted to the second half.

In the full year for vaccines, we continue to expect flat to low single digit percentage revenue growth. Turning to Slide 21, Q1 revenues in Consumer Healthcare decreased 9% excluding brands either divested or under review and including those brands turnover declined 16%.

As Brian mentioned, we've completed the tail brands divestment program in consumer. Consumer Health performance was largely as expected given pantry load and experienced in Q1 2020 when continuing sales [technical difficulty] and the very cold and flu season.

Operating margin for Q1 was 23.1% down 290 basis points of conscious exchange rates versus last year. Notably, the margin last year benefited from pantry loading and high continuing sales growth. As a reminder, the full-year 2020 margin was 22.3%. In Q1, there was also 220 basis points adverse operating margin impact from divestments.

Importantly integration synergies continue to be delivered by this business. With regards to Q2 considerations for consumer, there'll be a favorable comparison in Q2 for the continuing business as a result of last year's pantry unloading.

In Q2, 2020 that were sales of GBP116 million for brands divested and under review, so with further impact from those brands and consumer sales growth. It's also worth noting that there was a two percentage point sales benefit in Q2 2020 as a result of the North American systems cut over and that will not repeat.

As in the other businesses for consumer there is no change to expectations for the full year excluding brands divested or under review, we expect low to mid single-digit percentage revenue growth outperforming the market.

Turning now to our Group 2021 outlook, where we are reconfirming our EPS guidance range which assumes as outlined full year 2020 results with health care systems and consumer trends approached on out in the second half of the year in our key markets.

Our full year revenue expectations for each business also remain unchanged, but other important considerations that will influence Q2 performance as I've already mentioned.

Results through the remainder of 2021 will reflect the phasing and the comparator periods, as well as the progress of immunization programs and the extent to which pandemic conditions ease. Taking each of the business unit factors for Q2 that I've mentioned into account, we expect sales in Q2 to grow mid to high-single digits for the group.

With regards to P&L considerations for Q2, we anticipate that SG&A will increase broadly in line with sales, the investment in R&D will increase mid single digits. Overall, the pandemic disruption to our portfolio during H1 this year will result in H121 performance being below that of H120.

Despite the short-term impact, we remain confident in demand for products and expect a strong recovery and contribution to growth in particular from Shingrix in the second half of the year.

As mentioned by me earlier that our new GSK Investor Update on 23 June will provide more detail on our mid to long-term financial outlook, capital allocation priorities and dividends. With that, operator, we're ready for Q&A..

[Operator Instructions] Your first question comes from the line of Mark Purcell you are live in the call. Please go ahead..

Yes, thank you and thank you for taking my question. Two questions then the first one on the long-acting strategy, so David probably one for you.

So, please could you help us understand the path to market for CAB 400 and how we should think about the timing and dose frequency of that sub-cut backbone assay as every month we're going for every three months? And could you discuss the importance of this given that I believe your competitors Merck and Gilead do not have anything like CAB 400 in their pipelines in terms of how important is an [Ensco's] inhibitor when it comes to long-acting combination treatment approaches? And then the second question is on mRNA vaccines more broadly? Please, could you help us understand which parts of your vaccine franchise you believe might be vulnerable to mRNA disruption.

Is it just the fee business to you guys? And when you're thinking about prioritizing your own mRNA vaccine efforts, what are the key targets and will you be running parallel programs with the non-mRNA vaccine technology? Thank you very much..

Thanks. Well, we’ll come to, Roger and perhaps Hal might want to add something as well overall on our mRNA platform approach obviously something we mobilized aggressively behind both with our in-house platform, but also with our deal with CureVac last year, but David over to you first..

Yes, okay thanks Mark. Well, firstly, we are very pleased to bring the world's first long-acting injectable to the market with Cabenuva in the U.S. in February. And as I said in my remarks, we've seen a lot of interest in that from physicians and patients, obviously that will build over time.

But we do think the long-acting market has the potential to really be quite significant over time. And so, we're investing significantly into it and R&D in next generation. CAB 400 will really be at the heart of that. We are looking at it in sub-cut as you say, and other formulations too early to say exactly what the dosing frequency will be.

We're looking at different intervals one month, two months, three months and so forth. We will have, we are in clinical trials in that we still have some data in the second half of the year some early data.

And of course, we have lots of things that we are potentially going to combine that with, whether it's more maturation inhibitor programs bNAb and RTI, capsid and so forth. So a lot going on, in terms of the competition, we have to see. I mean, they've got a lot of scientific hurdles to get over.

Of course they're not integrated inhibitors, so resistance will be very important that they demonstrate that. And we'll see where they go with formulation and so forth, but I'm very excited by the program we've got and we will certainly outline more of that in June..

Thank you, Roger?.

Yes thanks, Mark. I'd say I think mRNA is going to form a critical part and dose form a critical part of our GSK vaccine pipeline. The benefits of the technology have really been accelerated and shown recently in terms of speed to clinic and the efficacy in the manufacturer, are the efficiency in the manufacturing process.

We've been investing for some time. We've got two real plays going on here which will bring to life more in June when we share more of the pipeline.

But just to give you a feeling for it, in terms of our CureVac partnership this infectious disease partnerships we've got five potentially mRNA pathogens to develop are under COVID next generation play with CureVac as well. And also Emma mentioned our in host self-amplifying technology in mRNA as well, which will be going into the clinic.

So we see a number of assets moving forward in the next 18 months, which will share in June, we are investing and allocating capital, our capital to it. So we're already looking at how we create world-class GMP manufacturing capability as well. Just answer your question directly and where do we think mRNA will play.

There are certain challenges, certain areas in vaccines where it may struggle in terms of technically being applied meningitis, bacterial infections as well. Other complex antigens, but I don't think you can be complacent. We do believe that this is going to be a very important platform for the future.

It’s going to be an addition to some platforms that we already have that we believe are world-class and like adjuvant bio conjugation viral vectors, all of these will be a very important portfolio of technologies that we're going to apply to the future in the pipeline.

And Hal anything you would add?.

No very comprehensive, I agree..

Could I just ask you from [GT fill] Shingrix Roger just to the points you made, is shingle an area where we feel mRNA could be disruptive or do you feel that the benchmark you share with Shingrix is just too high?.

We think the benchmark on the efficacy is really very, very high and going to be difficult too much, to be honest, given the impact of the adjuvant.

So again, we can't be complacent, I think lifecycle management of Shingrix making sure that we continue to expand geographically we've got all our indications that we're working on is going to be important, but I think that's a very high bar for mRNA to come after..

High bar and efficacy in a decade of safety, next question please..

Thank you very much. Your next question on the line comes from the line of Tim Anderson. You are live in the call. Please go ahead..

Thank you. I wanted to go back to HIV if I can and just the future competition from Merck and Gilead. So Merck in our TTI looks very good by itself Glaxo's sorry Gilead's capsid inhibitor looks very good.

Combining the drugs you might very well have a very strong drug that offers once weekly oral dosing and they're kind of capitalizing on these two drug regimen and I know that you've been a big proponent of two drug regimens? What does Glaxo have in the pipeline that makes you comfortable that you've got a competitive offering in the future where you might have something like a once-weekly oral regimen as well, because it seems like your franchise longer term could be at risk by these two products that are now being combined? And then second question just on Shingrix manufacturing capacity where you are in terms of having that expanded and what percent of capacity is currently being used? Thank you..

Thank you. Well, Roger may perhaps you can pick up - the Shingrix manufacturing I know there has been a lot of work going on in terms of progress there and then we'll come to David..

Yes listen, thanks very much for the question. We're making great progress on the manufacturing expansion and also whilst we've seen some demand disruption as we've mentioned on Shingrix we have kept making in terms of putting inventory into the system.

So I think the long and the short of it is, we're going to have the capacity in place to meet the demand that we foresee for the next number of years.

We have the new facility coming on in 2024, but we are - as I mentioned earlier, we're geographically expanding we should be in 16 countries by the end of 2021 and manufacturing over the next number of years is not going to be a problem for us..

Thanks for the question Tim. So in terms of weekly oral my understanding from Gilead and Merck is they expect to produce that combination I think in the mid '20s. What I would say on that is, I think it will predominantly compete against the daily orals and of course.

So in our case Dovato and the bar there as I think being set incredibly high with all the data we now have based on efficacy, safety. And of course most importantly resistance and integrators have really become the standard of care. And I certainly had enough questions around resistance as we went through the clinical studies.

So I think we'll see when the data comes out in the next few years, but there is a high hurdle to beat and resistance will be critical. Also and a lot of market research we've done, it's actually not clear that patients or physicians really prefer weekly oral versus daily oral and you will start to run into more adherence issues and so forth.

So I think there is quite a lot to play through there. In terms of the injectable, the long-acting injectable, I think they've said it too longer timeframe probably 2027. Again resistance will be important and just remember this program is at very, very early stage I think dolutegravir in injectable form is only in Phase I.

So there's a lot to go and a lot to prove and as I said in the answer to Mark meanwhile, we're investing a lot in second-generation with CAB 400 and so forth..

Next question please..

Thank you very much. Your next question on the line comes from this line of [Simon Mathew]. You're live in the call. Please go ahead..

Actually good afternoon everybody thank you for taking my questions. I've got two one on Shingrix and then one more of a strategic question.

So just on Shingrix, I think if you listen to Moderna they talk about and I think it's widespread, not concerns but views that potentially we're going to need to boost the vaccine for COVID-19 as we go towards the end of the year.

I'm just thinking how that might play into your views on the recovery of Shingrix? Do you think there'll will be potential space to vaccinate people with the Shingrix vaccine I'm just - generally overall thoughts on if we do have requirement produce the vaccine how that could potentially impact the recovery of Shingrix in the second half, that's the first question.

And the second one is more bigger picture strategic thing obviously capitalized maybe last week by the news of the revelations that Elliott will building a stake.

I think the question is, I mean, obviously, when you announced the deal with Pfizer, initially you had views of hopefully spinning off splitting this company into three years post close, obviously you've got a bit of space into five years post to close you have the choice what to do and not dependent on the current positioning in the standalone strength of biopharma as it stands now obviously, we've got a few disappointments in the pipeline, we've had COVID there's been a lot of headwinds that we could never seen.

I mean, is there a rationale for delaying the spin of consumer and maybe if you could maybe comment if you can on the enrollment of Elliott. And if you have any views on that would be great. Thank you..

Well, it will come to Luke in a moment to give more content to our confidence in the reaffirmation of the outlook of Shingrix relates to your booster question. I'm sure you won't be surprised that I'm not going to make any comment on them.

Its specifics regarding individual shareholder engagement but just to reiterate that we remain very committed to the pathway that we laid out at the time of the announcement of the Pfizer deal.

And as I said today I mean we are intending to give more specifics around the specific mechanism of separation, when we come with the new GSK update in June that we are absolutely on track in terms of the timetable and delighted with the progress both on the scale of the consumer successful integration and the separation plans, which are complex but absolutely well underway, as well as the future ready [technical difficulty] which is about setting up two competitive cost base is an operating model for two companies, all of that is continued undeterred by COVID with tremendous amount of work and focus from the organization.

The key underneath all that is for us to bring transparency and commitment around the growth prospects. And again, that's something that we intend to do in June with a lot of confidence underneath a good improvement in performance from '22 and beyond. So, all, very much on track.

Luke, do you want to comment on the question around businesses and Shingrix please..

Thanks, Simon. Look short term now impact medium-term opportunity. So what I mean by that is current assumption is that countries, including the U.S.

will concentrate on mass vaccinating so younger people, people who are hesitant to get a vaccine rather than vaccinating large cohorts of variance with vaccines in the absence based on what we know now of no waning immunity for viral escape in 2021.

Plus, if you look at the timelines of companies working on the new COVID-19 vaccines including us the line will be readouts towards the end of 2021 and I think in terms of opportunity if there is a role for boosters in 2022 we are very busy working on co-administration studies with the aim of having this data available in 2021 and I think if we have this data along with some other experiments and studies we're looking at data collecting from claims databases in terms of relationships and correlations between COVID-19 and shingles and COVID-19 vaccine with shingles this could actually create an opportunity in terms of co-administration, similar to the way we see with flu.

There is a clear relationship between flu vaccines and people receiving Shingrix. So short term, not much of a challenge, mid-term opportunity..

Thanks, Luke. Next question please..

Thank you very much. Your next question on the line comes from the line of Matthew Weston. You are live in the call. Please go ahead..

That will be the same questions, I'm sure, so first on RSV clearly an increasingly competitive area and one that GSK is flagged is strategically important in the mid-term.

I'm not going to ask you for comments on the competitive drug that's recently come out, but for me, it's a question around RSV rates being at such a low over the course of the last 12 to 18 months and whether or not that has any impact on the timing of your expected readouts in RSV.

And then secondly another vaccine question around pediatric vaccines. There seems to be a very big disconnect in the trends between Sanofi's pediatric vaccine revenue in 1Q and GSK pediatric vaccine revenue.

Sanofi talking aggressively about the benefits they will have with hexavalent in the U.S., can you give us an outlook as to where you see your pediatric vaccine trends going over the course of the next 12 to 24 months?.

Sure.

So first, I'll come to Luke perhaps in a moment on the pediatric vaccine [technical difficulty] first of all, Hal do you want to comment on the development programs around RSV more broadly?.

Yes, thanks. Well, your question is quite broad but as it relates to RSV in the older adults program we're very excited about given the huge unmet medical need.

Our Phase III programs for both maternal and adult are currently progressing pretty much as planned, we indicated that when we first outlined the ARC programs that the ID week last year that we expect the pivotal data in the second half of 2022 and although there is a risk that the timing could be affected by the RSV disease circulation given the pandemic, we've been monitoring this.

Our clinical trials groups are looking for areas in the world in which there is a reopening of the economies and where there is more individual contact person risks, so that the RSV might be more common there. So we're no changes to our current timelines and as I've mentioned, we continue to monitor this.

I think as it relates to the maternal vaccine of course our aim is to protect infants from birth up to six months of life through transfer of the maternal antibodies and I won't comment on the competitor information.

Of course, but the news is encouraging in that if a monoclonal can be protective when given to it an infant then we're very excited that a pre-fusion antigen given to the mother as a vaccine with a polyclonal response would be effective.

In fact, we've shown that when using that antigen that you can boost neutralizing antibodies up to 15-fold to deliver high levels of protective polyclonal responses, which is both important because of potential resistance relative to monoclonals but also the benefit of immunizing a mother versus infusing a monoclonal into an infant maternal immunization is becoming an established methodology to predict very young infants as well as of course the mother.

So we're very we continue to be very optimistic about both the older adults and the maternal program..

Thanks, Hal.

Luke?.

Sure. So, Matthew, I think there's two parts to this, I mean. Firstly we had hepatitis we saw CDC stocking there has just been new to the stockpile. And also, we've seen the interest of the reentry of Recombivax in the pediatric market which put a bit of pressure on hepatitis with DPTI similar trend in terms of CDC purchasing in the U.S.

and actually signal to us that they would do that they going to have inventory in Q1 and reverse that in Q2 and we've already seen that now, so they're putting in orders already in April. So we expect that to even out of the two quarters.

I think if you look at market share versus Sanofi but there is actually no movement, no material movement in market share in the DPTI market, but we do know they're out there pre-booking with Vaxelis. We do expect the level of the competitive intensity in the U.S.

and pressure on the pediatric DPTI business to increase of the timeframe that you described..

Thank you. Next question please..

Thank you very much.

Your next question - do you have a question to add?.

You may begin..

Okay..

No problem. Next question on the line comes from Keyur Parekh. You're live in the call. Please go ahead..

Good afternoon and thank you for taking my questions. Two, please, if I may one for Hal and one for you Emma. Hal, do you've kind of seen two of your riskier kind of oncology compounds have disappointing Phase II readouts recently.

Kind of thing, without setting obviously the data and I think, but can you just tell us what that means from your perspective as it relates to your broader oncology R&D plans, what do you think kind of if anything needs to change on that end where might it be different, as we look towards June.

And then separately, Emma I think you alluded to the Glaxo kind of underperformance from a stock price perspective. When you became CEO you laid down a very clear part for kind of the Glaxo a combined company as you saw it and despite that the stocks underperformed.

So my question is as we look towards June, what are you hoping to tell us that can excite investors and the market about the opportunities that you see forward and that drives your excitement today? Thank you..

Thanks, Keyur. So let's come for Hal first. Well, I think the answer probably linked and then I'll follow up in the second question..

Okay, well thanks Keyur for the thoughtful question. Let me first by just reminding everybody of the R&D focus as we outlined in 2018, which is really to focus on specialty medicines and vaccines, particularly focusing on immunology and human genetics to drive new both medicines and vaccines.

And within immunology we said one of the most exciting areas as marginally the immune system to help patients with cancer based on the profound benefits that PD-1 blockade has had we believed strongly that the checkpoint blockade area as well as cell therapy, to be honest that those two areas would be right for really leveraging our deep expertise in immunology and potentially being leaders in the IO space sort of IO version 2.0 if you will, after the PD-1 blockade.

You're right. We've had two disappointing Phase II studies and I certainly was disappointed by them but one has to remember that they were both Phase II where industry success rates are typically the 25%-ish across many companies in the IO space that number is typically lower.

We're very excited about the potential of immunology and oncology and continue to believe that's going to be a promising area and one pathway that we think is particularly exciting as the whole poliovirus receptor, the CD226 pathway, which we have the first-in-class anti-CD96 we've struck a deal to have the anti-PVRIG of course Vibostolimab approval that allows us to have some interesting combinations and given the CD state data from erosion some data from Merck we think the TIGIT sort of also confirms that this pathway is very exciting.

As it relates to human genetics, we still think that's very important in oncology, we're we've built a synthetic lethal research unit we've bought Zejula essentially and demonstrated with the PRIMA study that that's best in class PARP.

And we're very excited about the pipeline emerging, which is starting in Phase 1 with the MAP2a inhibitor what we've moved into the clinic with our collaboration with ANDA and we see several other synthetic lethal opportunities moving forward as we expand our relationships with the Laboratory for Genomic Research with Jennifer Doudna and Jonathan Weissman as well as the broad to uncover really novel biology to allow us to see other opportunities.

And that space so we continue to be focused in immunology and human genetics with synthetic lethal and believe that should result in a robust pipeline. I should mention also that three years ago, we had around, I think it was eight molecules in the clinic, the most advanced was in Phase 1.

Now we have 12 predominantly in the IO and synthetic lethal space and importantly over the past four years, we've had 10 new vaccines and medicines approved five in which have been in the last 12 months.

And if you include by cycle innovation we've had 19 approvals in the last four years, 10 up coming in actually in the last 12 months as well as nine I think Phase III trial succeed in the past 18 months. So I think the pipeline is progressing in a reasonably solid way.

And today in our pipeline, we have 22 ongoing Phase III programs twice as many as we had when I started. So I think we're making good progress there as well. Hopefully, that answers your question, Keyur..

Thanks, Hal. And Keyur, in terms of your second question, I mean big picture, we have been extremely focused over the last few years on shareholder value creation, recognizing that it's been some time when you look back over since the formation of GSK that we have opportunity to make big moves here.

We've been tackling really quite deep historic challenges the first priority being R&D performance and productivity. And by the way prioritizing that in terms of capital allocation investment and transformation of the team including the leadership. Hal has just given you with is modest approach.

Some of the headlines on the enormous progress that has already been made, there is always more progress to make, but underneath all of that has and the reason we do it is so that we can commit to competitive and sustainable growth delivery seeing us through whatever LOE patents that we have to digest.

So historic challenges being addressed of R&D productivity, real transformation of the competitiveness of our commercial execution, which I think can be clearly evident when you look at some of the big launches even just over the last few years that we committed to driving significant growth of that would be that Shingrix, be that to [technical difficulty] that Trelegy.

We also sorry we, so that would be in terms of the pipeline transformation.

The commercial execution transformation we've gone off the group structure at a major level, we're preparing for the separation into two new companies which is absolutely on track for next year, capital allocation priorities being clarified a significant refreshing of talent, not just in R&D but across all of the leadership team and culture transformation underway to.

All of this takes some time, but there is major change being delivered in all areas. And our goal in June is to make sure that we bring clarity and specificity. So the translation into growth outlooks and a step change in performance from 2022 and beyond. But also answer any other key questions that investors may have.

We've been clear that we expect to update on the specificity of the separation mechanism as well as distribution policy and target payout ratios. So hopefully that will be a useful session for everybody and certainly if investors have feedback on what we will bring them then. We're very interested to hear it. So I think it's pretty close.

Now, but we're very happy to run a bit longer. If that would be helpful for people and follow-on with some of the more questions that waiting. Thank you. Next question please..

Thank you very much. Your next question on the line comes from the line of Kerry Holford. You're live in the call. Please go ahead..

Thank you. Two questions please. For Iain, just on the legal settlement in the quarter and the guidance for the full year. So could you quantify that item in absolute terms and confirm what it relates to and once that [indiscernible] within your guidance for the year.

Because if it was not then it effectively implies something has worsened since you provided the guidance is that fair or not? I noted that I think you mentioned that your expectation for royalty income is now lower. I didn't catch why, but perhaps that is part of the offset the I just want some clarity around those items would be helpful.

And then secondly on strategy. I wonder if you can give any more detail as to why the EMA issued a negative opinion to the asthma indication, do you intend to see that line extension in this region. And if so what condition your work, do you think will be required. Thank you..

So Iain why don't you go first and then Luke on the prospects and plans on Trelegy..

Right. So Kerry on legal in the first quarter of last year, there was a provision for ongoing litigation. And that was approximately 60 million sterling. In the first quarter of 2021.

We were successful in terms of a judgment on that litigation and the provision was reversed and broadly in terms of that, was the outcomes that we were expecting for this year. So that was factored into how we saw the overall guidance playing through. So the effect. Year-over-year was not going to get a bit more than $100 million in that one.

In terms of royalty income.

As I mentioned in our comments, we sold one of the portfolio focusing elements that Dave's and the team have been very successful at working on was the sale of a stream of royalty income where we saw that particular product is no longer being of strategic relevance to the Group, and we saw an attractive economic opportunity to do that and that is what informs slightly lower royalty income for the full year.

But I think we moved it from 350 million to 400 million sterling to 300 million to 350 million sterling royalty income for the year, so those are the details on the financial points. I think probably some deals will be better suited tonnes [technical difficulty] for the indications..

Luke, do you want to take on strategies?.

Yes, I mean essentially Kerry we didn't meet the parameters outlined by the EMEA, the impact is not enormous in the European context, in the U.S. right now asthma patients represent about 5% of our business obviously growing incredibly quickly and around 12% of revenue, because it's the size of the dose.

We don't intend to try and resurrect that indication in Europe, we're disappointed, but we're moving on, and concentrating on COPD..

Thanks. Next question please..

Your next question on the line comes from the line of Steve Scala. You're live in the call. Please go ahead..

Thank you. A couple of questions. The release says that at the June meeting, we will get an update on the timing and approach to consumer separation, I'm curious what is there to update us on relative to timing since the timing seems unchanged.

So are you referring to fine-tuning with in mid 2022 or is a very different time of course within the range of possibility. And secondly, a little bigger picture question Emma you took over as CEO of GSK four years ago this month.

And as was just said you provided the plan for the path forward at that time I imagine that things have not gone according to your original plan, particularly relative to the cut to the dividend, pressure to spin consumer and the pipeline setbacks. So, things seem to have been tougher than expected.

Now you did just say that these are all formidable tasks and take some time, but would you attribute the inability to achieve the initial goals as more external obstacles or internal deficiencies. Thank you..

Thanks, Steve. Thanks. Still one of your questions. In terms of June. It's, you're right, more a reconfirmation an update on timing or there have been any surprises. What we do want to do is on questions that have been emerging on the mechanism.

In terms of big picture, I think one thing I can categorically tell you that we did not anticipate in 2017 with a global pandemic and if you just look at the trajectory ahead of that.

And frankly, where we were headed, particularly on our Shingrix vaccine, which let's face it has taken a slightly unique, and we believe for all the reasons that Luke laid out short-term hit, but as well as the rest of vaccines business but I think fundamentally, it's hard to conclude from what's happened in the last 18 months but being a world leader in vaccines well placed with new technology platforms with good growth opportunity and momentum in approved assets such as Shingrix but also a late-stage pipeline that's coming through in big adult vaccination opportunities such as RSV as well as the new technologies and a strategy that's focused on immunology with half the pipeline are suited to the pipeline in infectious diseases and immuno-oncology.

I think we are well placed with that. I would certainly not characterize our progresses due to unexpected pressure as you said on two separate consumer that was a very active choice that we made unannounced at the time of the deal with Pfizer and we're really pleased that's remain firmly on track and with the plans initially announced well in place.

Now in terms of the pipeline progress I think again I would I mean everybody on this call knows that not everything can succeed in pipeline development actually and Hal alluded to it, the positive readouts that we've had over the last few years have been very encouraging in terms of our growth prospects.

We have twice as many late-stage pipeline assets as we had just a few years ago.

Last year alone, we had 9 approvals and 9 late stage just this quarter we announced the third of three approvals in oncology, we have an exciting vaccines pipeline coming through and, but all of that is just so that we can bring visibility to what the growth of new GSK is going to look like and that's something we feel confident in sharing in [technical difficulty].

Thanks very much. Next question please..

Your next question on line comes from the line of Andrew Baum. You are live in the call. Please go ahead..

Thank you.

A couple of strategic questions please, first to David how long would it take to step to separates your established products business we've proposed a JV with someone like the [AmTrust] earnings and create an exit and take away the drag, is this potentially ready to go, or is it going to be similar to consumer with a 24-month lead time in order to separate the business units from the individual pharma part.

And then second for Iain, under the 100% demerger scenario, which I think investors are taking defaults, do you believe that GSK its balance sheet is strong enough to optimally address the future challenges particularly associated with dolutegravir generics as well as competitive HIV drugs like islatravir..

So, in terms of pick up on balance sheet and David. I'm not sure if there is a technical question to answer on something that....

Yeah, I guess our Pharma portfolio as well.

I think I established Pharma, Andrew, that's a revenue stream in excess of $7 billion with attractive margins a lot of cash generation and frankly the prospect of JV it with somebody else to dilute the opportunity of the earnings and the cash from that portfolio recognizing the downward and topline dynamics are driven by loss of exclusivity on a couple of important medicines that will work its way out over the course of the next 24 months.

I'm not sure economically that is necessarily the best step forward in terms of supporting both profits cash and going on to your second question around strengthening the balance sheet of GSK.

So it's not something that's been contemplated, but there is, there continues to be, as I mentioned earlier, a very strong focus from Luke, David and the team in terms of how we just continue to refine that portfolio both in terms of our geographic presence in terms of where we distribute those medicines, again driven both by access to medicines, but also the economics of that making sense and also just in terms of being able to sharpen the focus through how that portfolio is supported through supply chain commercial operations and to the patient.

From a separation perspective, I think going back to Steve's question will confirm the timing in June but what we will do is talk more about the mechanism that we would intend to pursue for the separation of the consumer health care company and through that I think will give greater line of sight as to what that then represents and in terms of capital restructuring for the new GSK balance sheet.

I think will provide a lot more detail on that, but other than to say that, no. I will say until that time. Thanks..

Next question please..

Thank you very much. Your next question on the line comes from the line of Graham Parry. You're live in the call. Please go ahead..

Great, thanks for taking my questions. Two more strategic ones actually. So firstly, the consumer separation is brought more attention to some of the parts valuation of GSK and that also includes differences between vaccines and pharma dynamics and outlook.

So, could you perhaps just talk through the rationale for having those two businesses in the same organization and potential synergies from having them in the same business.

And then secondly to the recent R&D failures accentuate the need to accelerate external business development and licensing M&A and or change the focus in the minds of management on the balance of internal versus external R&D sourcing for GSK and with GSK consider cutting dividend earlier than the consumer spend to facilitate debt finance M&A that's bulk of the pipeline? Thank you..

Well, I think Graham we've confirmed the dividend for this year and we've confirmed that we will be implementing new policies that we will update on from 2022. So I think that's already been stated and committed too. I will let Hal cover anything further he wants on our ongoing view that R&D should continue to be supplemented by BD.

But let me first cover quickly your points on vaccines absolutely call to new GSK, not least because scientifically.

We are focused on the science of immunology and these businesses are operationally, geographically, completely integrated so Luke leads the commercial operations for our vaccines in all countries in the world and an integrated way across the rest of the portfolio.

Scientifically we have one development organization, which is not only helpful from an operating and a capital allocation judgment point of view across the different it's also increasingly relevant when you have such a big portfolio of infectious diseases.

And when we all know that as evidenced most recently through COVID that reviewing from a patient back point of view prevention and treatment. And we think about that, whether it's in flu, Hep B and HIV.

If you think we are looking at the prep world as well as the treatment world, COVID too and we see increasing opportunities in that direction, not least, when you think long-term the new technology platforms and then of course adds we've been working on the future ready program towards separation and getting a fit the purpose cost base.

We've been very thoughtful about making sure that we have distinct capabilities where they’re necessary, but we absolutely simplify, and reduce duplication in terms of an integrated operating model.

And both the specialty business and the vaccines business where we're investing for growth - are expected to contribute to the growth outlook meaningfully for new GSK.

So with that Hal anything to add on ongoing business development focus as part of the pipeline and how it is continue reviewed?.

Thanks, Graham. Of course, strengthening the pipeline is certainly my number one priority, our company's number one priority in terms of allocating capital to do this we obviously have invested significantly in our own internal efforts and that's resulted in.

As I mentioned earlier, five new medicines in the past 12 months and twice that in terms of number of approvals, if you include lifecycle innovation, but business development plays a critical role in this.

We've been very active in this space, we've as you know done deals with Vir and CureVac recently and we'll continue to focus our efforts to find really interesting things in the external world.

Obviously, we're not going to come out and tell you precisely what those assets are in companies, but we are exploring opportunities across vaccines and specialty medicines with a focus on leveraging our expertise in immunology and human genetics to find novel targets for medicines that we believe could be transformative for patients in our pipeline..

Thanks. Next question please..

Thank you very much. Your next question on the line comes from the line of Geoff Porges. You're live in the call. Please go ahead..

Thank you very much. A few quick questions Luke, you said recovery in Shingrix in the second half of the year, but could you give us a sense of whether you expect that to be the same as 2019 below 2019 still or above 2019 which would presumably be real growth.

And then, perhaps you could also comment on your average pricing effect in Q1 on the major brands? What was net price? And then lastly, related to that, forecasting the best of times and that another sign. And what assumptions about U.S.

long-term pricing are you incorporating in the five and 10-year forecast that you're providing? Can you grow regardless of what happens to the pricing environment in the U.S.?.

So Luke, you might want to talk about some of the net and Iain, you might want to - or maybe Iain you kick-off in terms of overall outlook..

Yes, look I think when you certainly start looking at the ability to incorporate the possible impacts of U.S. reform on pricing in the long-term, it's frankly a bit of a fool's errand.

But certainly the way that we have approached that is recognizing the risks to the long-term view is assessing what the possible outcomes are of various reform approaches set out by the administration or previous administration.

Clearly one of the things that we do and we'll continue to is engage with the administration not only in the U.S., but in other countries around reform. And I'm sure frankly that any reform allows us to continue to support innovation, but also access to medicines and hopefully reduce out of pocket expenses for patients.

But what we do is evaluate that. And then with that valuation in hand, which is supported by our U.S. team with a lot of detailed analysis is then frankly incorporate that into an overall risk assessment of our ability to deliver the top-line growth projections that we will share with you on the 23rd of June. So more detail about that then..

Thanks, Iain and Luke anything to comment..

Yes. Geoff, I mean, I think Shingrix is broadly similar to 2020. So obviously good compare to 2019 - 2020 or 2019 question. I mean the logic behind that we've covered through the call. Maybe just a little bit more color around why we're confident for the second half recovery.

I mentioned before around potential patients saying after the COVID series completion, they would like to go back and about 50% of the cases for COVID vaccine within month or three months. I think those patients being relatively conservative waiting for side effects from that second dose before electing to go in and re-discuss their Shingrix vaccine.

When we look at physicians, the physicians I think are more - I mean, the evidence, not what I think, it's what the evidence says, they are more confident. So around half physicians are advising their patients to wait two weeks before going back and talking of that another vaccine like Shingrix and about a third are saying four weeks.

And in terms of pricing, it was very much as expected. There were some ups and downs. So we had some pressure on pricing, as you'd imagine, in parts of the portfolio like Advair, but good strong pricing trends with Anoro, Trelegy.

There was some pressure in the market in the IL-5s, but had still good pricing dynamics relatively speaking to the rest of the portfolio. So nothing major on that front. I think looking forward Iain is just giving color around that..

Thank you. So I think we have one final question. Now, I'm sure we'll look forward to have more in coming days, but let's go to the last question now, please..

And your last question today is from the line of Peter Welford. You're live in the call. Please go ahead..

Hi, thanks for letting me in.

And so just returning to the growth outlook first of all for the next 10 years and five years, just to be clear, is this fund to be growth outlooks for both the top-line and margins and/or also EPS or how should we think about that? And what degree of flexibility do you want to build into that outlook given obviously the 10-year timeframe? And what could potentially happen over there with regards to your ability to execute on future strategic visions? And then just on vaccines, can you confirm any of the pathogens that you're working on with CureVac? And can you also talk a little bit about perhaps any pre-orders you're seeing for flu vaccines and how that's evolving after obviously what was a bumpy year last year? And then just finally on Blenrep, curious if you could give us any visibility on the types of patients that you're getting in the U.S.

going on that drug and if you could just update us on the timing of the data with the GSI this year? Thank you..

Right, so Luke could you give a quick response on Blenrep please. Hal on GSI readout and then we're not going to give any more details on CureVac today. We’ll bring more of that later in the year and then we'll finish with Iain please. Just to give a little bit more color on the outlook what we mean by outlook for that okay, so Luke and Hal, please..

Yes, thanks Emma and just on flu look the pre-books almost complete throughout 54 million doses similar to 2020 just one flag to say the in work in the future. There was a reversal of returns provision because we had a lot of demand last year. So the compared will be challenging and the Southern hemisphere is looking good.

In terms of Blenrep look, I think it's off to a good start. I think if you look at in the post Dara era strong performance at the same point as XPOVIO and Sarclisa. You asked about a typical patient. There is a broad spectrum, if you average it out, it's [indiscernible] has previously been on a PI an IMiD as CD38 and a couple of other combos.

It's interesting when you dig into that a little bit further if you look at shares. Overall, we're getting about 5% of patients in top-line 18% with 7 line plus but we’re actually the leading agent in the 7 line plus, which is about what we'd expect to see at this point dose range is good. The dose range about 185 to 90 mix per patient.

So we're not seeing a lot of evidence around dose splitting, which is good. In terms of dose frequency we're seeing subjects receiving in a 60% of time it's Q3 weekly 20% it's Q3 to Q4 and only 20% longer than Q4, which again is a good signal in terms of tolerability and as we move up to earlier lines of treatment.

Of course, we'll see more patients receiving infusions. About one and two oncologists, hematologists in the U.S. have tried Blenrep, and the primary reason for driving to using the agent, is the efficacy and the mechanism of action.

And the main things to navigate which actually much lower in terms of percentages is the eye exam and the logistics around the rent. So, I hopefully that's useful Peter, but an encouraging start when we look at the uptake of the product so far..

Hal, I think on GSI time..

Yes, I know we should have further data on the Blenrep data with the GSA combination from the DREAMM-5 study before year-end, it will be early data but we potentially could have some data by before year-end..

Thanks and Iain..

Yes Peter. So on growth outlooks that we'll share in June. On the top line our view for 10 years more detail around our profits for the five-year.

So I'm - I've got no intention of falling into the trap [technical difficulty] look that's a dodgy one, but certainly more detail around the coming five years on operating profit margins and our outlook for cash, for example. And obviously we will provide the detail around. As we've said around our dividend policy for new GSK at that time also.

So those are some of the things that we will cover our financial outlooks perspective on 23rd of June..

And with that we should all very much look forward to sharing more with you at that event. I hope as many of you can join as possible. And in the meantime take care [indiscernible] today..

Thanks very much everybody..

Thank you to all our speakers. That concludes your conference call for today. You may disconnect. Thank you for joining and enjoy the rest of your day..