GSK PLC Earnings - Q1 2025 Analysis
Positives
- Sales increased by 4% and core operating profit grew by 5% in Q1, against a strong comparator base of 35% growth in 2024.
- General Meds, Respiratory sales were up 1%, driven by Trelegy, which was up 15%, benefiting from continued patient demand, SITT class growth, and increased market share.
- The company delivered £7.5 billion of sales in Q1, up 4% YoY, demonstrating the resilience of the diverse medicines and vaccines portfolio.
- The company continues to deliver strong growth and momentum in HIV treatments and prevention with sales growing 7%, driven by competitive execution and strong patient demand for the industry-leading innovative portfolio in Dovato, Cabenuva, and Apretude.
- The company had around £50 million, £54 million sales in China in Q1, and maintained a market share of about two-thirds versus (01:00:07), which is good, because the one-third of (01:00:09) patients are not the target business anyway because of their out-of-pocket sensitivity.
Q&A Highlights - Q1 2025
Analyst asked about the company's strategy for new product launches and how it plans to keep SG&A growth low while providing adequate support for the new products.
The company is committed to driving continued productivity and has a multiyear plan to allocate resources from mature lines to new products. They use marketing mix models and other tools to understand the response rate to marketing investment and field force investment. They have a strong position in the areas where they are launching products, particularly in respiratory, and they are confident in their ability to support the new products.
Analyst asked about the company's approach to tariffs and taxes, specifically regarding the supply chain and the customs value of products.
The company has a complex supply chain that touches the US in some way, and they have dual sourcing for many products. They have done a lot of work on tariffs and taxes and are confident in their position, which stems from the supply chain and productivity initiatives. They have a robust plan to deliver on their goals, and they are committed to delivering on their commitments.
Analyst asked about the company's approach to R&D and why they haven't been doing these things before.
The company is continuously working to improve productivity, particularly in SG&A, where they have sufficient spending. They are focused on growing their business through effective and efficient growth-driving products. They are also working to improve R&D productivity, but their first priority is to continue to invest in the acceleration of the pipeline. They are also focused on setting themselves up for the next wave of COPD, life cycle innovation, and accelerated delivery of the BD they are doing. They want to use the settlement they delivered to increase investments in R&D later this year.
Analyst asked about the company's approach to revax and Shingrix, specifically regarding sales in China and inventory.
The company is confident in their approach to revax, and they are still working on improving the productivity of R&D. They are going as fast as possible to continue to increase investment behind the acceleration of the pipeline. They see that as one of the levers to pull as they navigate through potential scenarios. They are also watching the macro and POV dynamics closely, but they are seeing encouraging trends in China. They had around £50 million, £54 million
Analyst asked about the dynamics within the PrEP market, specifically regarding switches versus new to prevention, and the impact of the shutdown of USAID on clinical trial recruitment.
Emma N. Walmsley, CEO of GSK PLC, stated that the PrEP market is continuing to grow, with Apretude showing strong performance and a third of Americans who could benefit from PrEP not currently getting it. She also mentioned that competition in the market could help expand the market and that there is an opportunity to switch more oral patients to long-acting PrEP.
Analyst asked about the clinical trial side of GSK PLC, specifically regarding the impact of the shutdown of USAID on clinical trial recruitment.
David Simon Redfern, Chief Scientific Officer of GSK PLC, stated that there has been some reduction in funding from the federal government to different investigators and clinical trial networks, but it has not directly affected GSK or ViiV. He also mentioned that there has been some impact on pediatric studies, but that they are working with the community to do what they can.
Analyst asked about camlipixant and its potential clinical significance.
Tony Wood, Chief Development Officer of GSK PLC, explained that camlipixant is a molecule with a selectivity profile many orders of magnitude in excess of related agents, and that it showed a 34% placebo-adjusted reduction in the 24-hour cough frequency in the SOOTHE study. He also mentioned that the company is interested in camlipixant because of its potential to reduce cough frequency, and that they are continuing to review and connect with potential partners.
Analyst asked about GSK PLC's base case assumption for REMS and how potential scenarios could influence uptake.
Emma N. Walmsley, CEO of GSK PLC, stated that the company's appetite for BD remains high, and they continue to be busy reviewing and connecting with potential partners. She also mentioned that they are prioritizing capital allocation, specifically on the BD front, and that they are pleased to have gotten IDRx away.
Analyst asked about GSK PLC's plans for capital allocation, specifically on the BD front.
Luke Miels, Chief
Analyst asked about GSK's long-term HIV strategy, specifically regarding the development of longer-acting orals.
GSK's primary focus is on generating longer-acting injectables, and they are pleased with the progress they have made with Cabenuva, the first mover in long-acting injectable treatment. They are focused on taking that forward to four-month and potentially longer options. They are also excited about VH184, which showed rapid and highly potent antiviral activity and a broad resistance profile in clinical trials. They are monitoring the development of longer-acting orals but see them as largely cannibalizing daily orals, and their focus is on building on their first mover advantage in long-acting treatment.
