GSK - Earnings Call - Q2 2025

Transcript

Operator (participant)

Ladies and gentlemen, a very warm welcome to the GSK Q2 2025 Results Call. I'm delighted to be joined today by Emma Walmsley, Tony Wood, Luke Miels, Deborah Waterhouse, and Julie Brown, with David Redfern joining for Q&A. Today's call will last approximately one hour, with the presentation taking around 30 minutes and the remaining time for your questions.

Please ask only one to two questions so that everyone has a chance to participate. Before we start, please turn to slide 3. This is the usual safe harbor statement. We will comment on our performance using constant exchange rates or CER, unless otherwise stated. I will now hand over to Emma on slide 4.

Emma Walmsley (CEO)

Thank you, and welcome to everybody joining us today. Please turn to the next slide. Our second quarter results once again demonstrate GSK's strong performance momentum and the quality and strength of our portfolio. Group sales were up 6% for the quarter, core operating profit was up 12%, and core earnings per share grew 15% to GBP 0.465. Sales growth was driven by our largest business, specialty medicines, up 15%, and vaccine sales also contributed with sales up 9% in the quarter. This led to increases in profits and earnings, which also benefited from a strong focus on SG&A.

Alongside operating performance, we continue to make good progress in R&D, with three FDA approvals achieved so far this year. Cash generation also remains very positive, with GBP 3.7 billion generated in the first half to support further investments in growth and returns to shareholders. The dividend for the quarter was GBP 0.16, and we've now completed more than GBP 800 million of the share buyback program initiated in February. All of this is underscored by our commitment to operating as a responsible business, our most recent action being to expand our voluntary license agreement with the Medicines Patent Pool to now include long-acting cabotegravir for treatment of HIV, as well as prevention.

Finally, driven by our strong performance, we're confirming today that we now expect to be towards the top end of the financial guidance given for 2025. Next slide, please. Following the demerger of Haleon, we made a commitment to drive a step change in performance at GSK. This quarter has again shown that GSK is delivering consistent sales growth, operating leverage, and positive financial performance.

The investments and development choices we made in our portfolio, notably to launch new specialty medicines, have really helped to drive these new performance levels. In the last three years, we've launched innovations in respiratory, immunology, oncology, and HIV, and we have a lot more to come. Alongside our new vaccine to prevent meningitis and an antibiotic to treat urinary tract infections, three of the five product approvals we expect this year are specialty medicines.

Tony will talk to each of them in more detail shortly, but let me touch just briefly on Blenrep. As you'll have seen, the FDA has extended the review period for Blenrep with a new target action date of the 23rd of October. We remain very confident that Blenrep can bring significant benefit to patients with multiple myeloma in the U.S. and are in constructive discussions with the agency.

Meanwhile, we continue to receive approvals and prepare for launches of Blenrep in many other countries, including across Europe, Japan, Canada, the U.K., and Switzerland. With the portfolio we have and the launches to come, we expect specialty to be a major driver of growth for GSK. Our specialty business accounts for around 40% of sales today, and we expect this to be well over 50% by 2031. Next slide, please.

As we've consistently said and demonstrated, our number one priority for capital allocation is to invest for growth. We're doing this by focusing strongly on the delivery of the 14 scale opportunities we've previously highlighted, all of them with peak year sales above GBP 2 billion, by ensuring we have appropriate resources for priority launches, and by prioritizing capital in R&D to RI&I and oncology, both organically and with targeted business development.

Our BD has real momentum and is a key driver of pipeline expansion. We'll be adding four high-potential assets to late-stage development this year, and three starting phase III were sourced through disciplined BD- IDRx, efimosfermin, and our ADC targeting B7H3. We'll also begin a pivotal trial to support our four-monthly long-acting injectable regimen for HIV treatment. We continue to add high-value innovation at earlier stages of development too.

The pioneering strategic collaboration announced with Hengrui this week is another excellent example of this. Lastly, and very importantly, we continue to optimize our supply chain with significant investment in U.S. manufacturing and scaling up of capacity for our new modalities and technology platforms. As we said last quarter, our overall planned investment in the U.S.A. is in the tens of billions of dollars over the next five years. Next slide, please.

With the breadth of our current business and the growth opportunities we have in our pipeline, we are highly confident in our outlook for sales of more than GBP 40 billion by 2031. As we've repeatedly demonstrated with our pipeline development, this long-term outlook has consistently improved, and we are ambitious and committed to do more. Next slide, please. Overall, with the momentum we have and the progress we're making, we're very confident we can deliver the targets we've set for growth in the short, medium, and longer term. Let me now hand over to Tony to talk to you in more depth about our great R&D progress. Next slide, please.

Tony Wood (Chief Scientific Officer)

Thank you, Emma. Next slide, please. Our number one priority in R&D is to develop transformational specialty medicines and vaccines in areas of high unmet need that positively impact health and deliver significant growth. This is evident in the 14 scale opportunities we have for launch before 2031 and in the progress we're making to expand and accelerate our early-stage pipeline of first and best-in-class assets.

We remain focused on four core therapy areas enabled by advanced technologies, talent, and a network of world-class partnerships, and we continue to deepen our expertise in the science of the immune system. This is most recently exemplified with our work to develop IL-5 medicines for lung diseases, which is providing us with a better understanding of the role of the immune system in fibroinflammation, leading us to target diseases beyond the lung towards kidney, liver, and with the potential future application in neuroimmunology.

Next slide, please. Based on decades of research, we have a unique understanding of the role that inflammation plays in chronic airway disease. Our focus on the underlying biology of inflammation, notably in COPD, has led to a differentiated pipeline of long-acting options, each strongly supported by human genetics, disease phenotyping, and insights from our own scaled clinical trials. In May, we received FDA approval for NUCALA for the treatment of COPD. This is the fifth indication for NUCALA in the US.

We've also filed Depemokimab, our novel ultra-long-acting IL-5 antagonist for the treatment of asthma and chronic rhinosinusitis with nasal polyps with regulators, and we have a PDUFID date of 16 December. I'm also pleased to report for the first time today positive results from the AGILE continuation study, which further underscored the sustained efficacy and safety over a two-year period of twice-yearly Depemokimab.

AGILE is an open-label 12-month extension study in severe asthma patients who completed either SWIFT-1 or SWIFT-2. The results show that patients who continue to receive Depemokimab maintained the efficacy achieved in the prior trials. Importantly, patients who crossed over from placebo also saw a reduction in exacerbation rates consistent with results in SWIFT. As a reminder, the SWIFT studies demonstrated a 72% reduction in exacerbations requiring hospitalization for patients who received Depemokimab.

I'm also pleased to confirm today that we've started an extensive development program for Depemokimab as an add-on treatment in COPD. The ENDURA trials are now recruiting, and the VIGILANT trial designed to evaluate efficacy in earlier-stage disease is planned to start later this year. As the only company with a range of ultra-long-acting mechanisms, specifically IL-5, IL-33, and T-slip, we're competitively placed to lead in this disease.

Through our license agreement with Hengrui, we're now adding a novel potential best-in-class PD3/4 inhibitor, addressing gaps in the treatment of patients who face continued dyspnea or who are unlikely to receive inhaled corticosteroids or biologics because of their disease profile. Last but not least, the camlipixant and CALM-1 and CALM-2 trials remain on track and will be reported together in 2026. Next slide, please. In immunology, we're extending our expertise in inflammation to understand how it leads to fibrosis in the lung, liver, and kidneys to treat, prevent, and stop disease progression.

Fibrotic diseases are thought to account for 45% of all deaths worldwide, so there's a major unmet need here. These conditions are typically seen as difficult to treat, but our work in human genetics and phenotyping, combined with emerging platform technologies, including oligonucleotides, which have a unique ability to modulate gene expression in the liver, is showing real promise. As a result, we now have a growing hepatology pipeline with assets to treat chronic hepatitis B, as well as steatotic liver disease or SLD, starting in metabolic dysfunction-associated steatohepatitis or MASH, and alcohol-associated liver disease or ALD.

Let's start with hepatitis B, a considerable market opportunity with large unmet need and limited standard of care. With piperoviricin, an oligonucleotide, we have an exciting opportunity for a functional cure. Promising data from the phase II B-CLEAR and B-SURE studies demonstrate sustained loss of hep B surface antigen below the level of quantification.

Importantly, new insights from recent epidemiological studies have shown that loss of surface antigen reduces all-cause mortality by up to 62% and the risk of developing liver cancer by up to 89% in HBV patients. We expect to present additional follow-up data from B-SURE at AASLD later this year. Our phase III B-WELL trial continues apace with data expected in the first half of 2026. I'm also delighted to share that the B UNITED phase II study has completed recruitment four months ahead of schedule. This trial is looking at sequential administration of Daplusiran and tomligisiran, followed by bepi, which will read out in 2027.

If positive, it will significantly expand the patient population who could benefit from treatment. As already highlighted, we're also excited to complete the acquisition of efimosphermin, or EFI. This adds another phase III ready potential best-in-class medicine to our pipeline. EFI is a once-monthly FGF21 analog with phase II data, which demonstrates its potential to reverse liver fibrosis in MASH. We plan to start phase III trials in MASH later this year, with plans for further development in ALD. Of course, development of GSK'990, our siRNA therapeutic, continues for other subsets of patients with SLD. We see these two assets as complementary, providing options to develop both monotherapies and combinations. Let's turn to oncology now.

Next slide, please. Here, our momentum continues, and we're rapidly expanding beyond our current focus in hematological and gynecological cancers to treat additional solid tumors. On Blenrep, as Emma has said, the new PDUFID date is the 23rd of October 2025, providing the FDA with time to review additional information provided in support of the application. We're in constructive discussions with the FDA, and while I know you'll want more details, the review process remains confidential, and I'll update you when we can. Outside the U.S., we've already received regulatory approvals from Europe, Japan, Canada, the U.K., and Switzerland, all pointing to the positive impact this medicine can have for patients with multiple myeloma.

Elsewhere in the portfolio, we're progressing multiple development programs. Last year, JEMPERLI was expanded to all adult patients with primary advanced or recurrent endometrial cancer as the first and only immuno-oncology-based treatment to show an overall survival benefit in these indications. Initial results from the AZURE 1 trial in rectal cancer are expected in 2026, with the phase III JADE study in locally advanced head and neck cancer also ongoing. For OJJAARA, studies are underway to expand the label into MDS, and additional indications are also in planning.

We have a high ambition for our new ADC portfolio, and given the significant potential we see here, we're prioritizing investment. We are developing GSK227, our B7-H3 ADC in lung cancer, and evaluating other solid tumors. We have already received two breakthrough designations from the FDA in relapsed or refractory extensive stage small cell lung cancer and in late-line relapsed or refractory osteosarcoma. Early combination data with PDL1 indicates the potential for a chemo-free regimen in first-line small cell lung cancer, with more mature data expected in November.

We are on track to start a pivotal study before the end of the year. For GSK584, our B7-H4 ADC will start pivotal studies early next year. Lastly, earlier this year, we entered into an agreement to acquire IDRX42, a highly selective kit inhibitor being developed as a first and second-line therapy for treatment of gastrointestinal stromal tumors, or GIST. IDRX42, now GSK981, has demonstrated activity against all key primary and secondary kit mutations observed in GIST. This breadth of coverage, in addition to high selectivity, which could provide improved tolerability, offers a potential best-in-class profile.

We will start recruitment for a pivotal study in second line before year-end. Next slide, please. Within infectious diseases, we are developing prevention and treatment options with broad coverage. Two of our recent FDA approvals exemplify this. PENMENVY, our pentavalent meningococcal vaccine, offers more strain coverage, enabling higher protection from the serious consequences of infection to more teens and young adults. BLUJEPA is the first new class of antibiotic in over 30 years for the treatment of uncomplicated UTIs, a condition that affects 50% of all women. We are also making progress with other ID assets. Our phase III trial for tebipenem in treatment of complicated UTIs was stopped early for efficacy.

AREXVY received a positive ACIP recommendation, expanding its use to adults aged 50 to 59. With SHINGRIX, we are now researching this vaccine's potential for use beyond shingles. Given the increasing number of real-world evidence studies showing a potential protective effect in dementia, we have initiated several research collaborations to explore this effect prospectively. These include a first-of-its-kind large-scale linkage study with the UK Dementia Research Institute and Health Data Research UK.

Of course, development work in HIV is also a clear priority, and you will hear more from Deborah on this shortly. Next slide, please. I am pleased with the strong momentum and material progress we are making in R&D. I believe we have more and better opportunities with 66 assets in full clinical development, 16 currently in late stage, and eight regulatory breakthrough designations already this year.

Our deepening expertise in immunology, use of advanced technologies, and world-class partnerships are delivering results. We've had three FDA approvals so far this year and remain on track for two more. Adding to a record 13 positive phase III readouts in 2024, we expect another 15 readouts through 2025 and 2026. For the remainder of this year, we'll start pivotal studies for four assets. Two of these are in oncology with our B7-H3 ADC in extensive stage small cell lung cancer and IDRx42 in second-line GIST.

In hepatology, we'll start efimosphermin in MASH, and in HIV, a pivotal study for our Q4M ultra-long-acting treatment regimen. Overall, we've a clear path to extend our leadership in respiratory, exciting new prospects in immunology and inflammation, and momentum in oncology, alongside major pipeline opportunities to come in infectious disease and HIV. Next slide, please. To finish, I'll go back to where I started with our focus on a best-in-class pipeline in areas of huge unmet need, which you can see here. Where we're making an important difference to the health of billions of people. With that, I'll hand over to Luke.

Luke Miels (Chief Commercial Officer and CEO Designate)

Thanks, Tony. Please turn to the next slide. In Q2, we delivered GBP 8 billion in sales, up 6% versus last year, demonstrating strong execution and demand-driven growth. Growth in the quarter was driven by specialty medicines, up 15%, and strong SHINGRIX and meningitis demand in Europe, with some offset driven by the expected impact of the Medicare Part D redesign across the portfolio, which is tracking as expected. Next slide, please. Specialty medicines continues to be the most important driver of our diversified business, with double-digit growth once again in all therapy areas.

Operator (participant)

Starting with RI&I, sales were up 10%, even with the expected tough comparators for NUCALA and BENLYSTA, and this was driven by strong demand. BENLYSTA, our treatment for lupus, grew 13% and is now positioned as a preferred therapy in all global guidelines. In the quarter, EULAR also updated their recommendation for use of BENLYSTA up to three years following remission. NUCALA, our anti-IL-5 biologic, grew 7%, in line with expectations following an inventory build in quarter two of 2024, and the impact of Medicare Part D redesign, both offset by strong performance in Europe and international.

We are very pleased with the label we have in COPD, which I'll cover in a minute. Moving to our growing oncology portfolio, which was up 42%, JEMPERLI for endometrial cancer continues to see increasing patient demand and growing market share in both dMMR and MMRp populations, following our all-comers approval in the U.S.

and Europe, up 91% in the quarter. OJJAARA sales were up 69%, driven by strong U.S. volume growth, including growing demand from moderate anemic patients that represents 65% of the market opportunity. Blenrep had its first sales in second-line multiple myeloma, following early launch days in the U.K., and more on that in a minute. With this strong momentum and the great performance from ViiV that Deborah will cover, we are increasing our full-year specialty guidance, now expected to grow in the low teens %. Next slide, please.

In respiratory, we're very pleased with the strong label we received for NUCALA in COPD. We now have an important opportunity to reach a wide spectrum of patients with a blood eosinophil count starting at 150 cells per μl, a key differentiator for our monthly biologic. The label also includes important data showing a 35% reduction in hospitalizations from severe exacerbations, a high-quality data point, as we know that one in two patients hospitalized from COPD will die within five years, and that these hospitalizations are responsible for 70% of all COPD-related costs.

We continue to look forward to the significant opportunity we have with Depemokimab, our twice-yearly IL-5, which has been filed in all major markets for approval in severe asthma and nasal polyps. Both opportunities we expect will expand the market for biologics in this space. We've also had very positive market research, which shows 86% of pulmonologists think Depemokimab could become standard of care, and 87% of patients said that they would be likely to use Depemokimab if supported by an ACIP. We look forward to a U.S. FDA decision toward the end of the year.

On Blenrep, we're very confident in the opportunity for this important medicine and continue to emphasize the projected overall survival benefit of 33 months compared to standard of care from DREAMM-7. Our premium coordination of care service has already been well received in the U.K., following approval and launch in April. We're also pleased to have received approval in Europe, Japan, Canada, the U.K., and Switzerland. As you have heard from both Emma and Tony, we're continuing to work with the FDA to bring this important medicine to American patients. I'll now hand over to Deborah to cover HIV.

Deborah Waterhouse (CEO of ViiV Healthcare and Head of Global Health)

Thank you, Luke. Our HIV portfolio continues to deliver exceptional growth, up 12% in the quarter. Nine points of growth came from strong patient demand for our long-acting injectables and DOVATO. Three points came from customer stocking patterns and tender phasing. We saw demand grow across all regions and major markets, particularly the U.S., which grew 14% through double-digit demand growth, and where we saw not only total share gain outpacing the competition, but CABENUVA consistently gaining at least 70% of product switches from competitors.

DOVATO continued to deliver strong performance, up 23%, and our long-acting injectables, CABENUVA and APRETUDE, delivered robust growth at 46% and 50%, respectively. With treatment accounting for 90% of the total $22 billion HIV market, we continue to drive the shift to long-acting injectables. In Q2, CABENUVA and APRETUDE delivered more than 70% of our total growth, driven by the U.S., where they now account for one-third of sales.

Focusing on long-acting injectables for treatment, strong patient preference is reinforced by Volition, a phase IIIB study shared at the IAS conference this month, showing nearly 90% of newly diagnosed people chose to switch to CABENUVA from daily pills after achieving viral suppression. This medicine continues to transform the lives of more than 90,000 people living with HIV. APRETUDE saw strong growth in the quarter, and we expect it to continue to grow in H2 in the U.S., bolstered by over three years of real-world data demonstrating more than 99% effectiveness, along with excellent safety and tolerability across broad populations.

We have set a high bar for tolerability with APRETUDE, given by one shot intramuscularly. This quarter, we initiated the phase one Clarity study in healthy volunteers to evaluate the tolerability of a competitor's long-acting injectable against APRETUDE's robust profile. We are very optimistic about the outcome and look forward to sharing data at an autumn conference. Given our strong and sustained performance today, we are adjusting our 2025 HIV guidance upwards to mid to high single-digit % growth. Next slide, please.

We continue to progress our industry-leading pipeline with integrated inhibitors at the core and have multiple long-acting options with strong profiles for Q4M, Q6M, and self-administered. Building on our established two-monthly injectable regimens, we believe four-monthly dosing in PrEP and treatment will be important options, delivering longer dosing intervals and ensuring continuity of care. Our Q4M PrEP trial has recruited rapidly and is going well. The FDA has asked for an extra four months of data, which means the study will read out in H2 2026, and we look forward to launching in H1 2027.

At the launch of Q4M treatment, we expect to have the only complete long-acting injectable treatment regimens on the market for many years to come. Looking ahead to our twice-yearly injectables, we're on track to confirm the dosing regimen for Q6M treatment in 2026 and expect to file and launch both Q6M for treatment and PrEP between 2028 and 2030.

For treatment, we are particularly excited about VH184, our third-generation INSTI, which has the best resistance profile seen to date and has the potential to be the backbone of our next generation of HIV treatment regimens with IP cover through at least the end of the next decade. We also continue to pursue potential cures for HIV. In July, we initiated ENTRANCE, a first-time in-human study featuring a bNAb N6LS with or without fotemzavir, currently marketed as RUKOBIA.

This work is at an early stage, and we are pleased to bring our scientific expertise to this notoriously difficult area. With a 10-year head start in long-acting treatment, we are focusing on the next generation of HIV innovation. We remain confident that our pipeline, including five planned launches by 2030, will continue to drive performance over the coming decade and beyond. With that, I will hand back to Luke.

Luke Miels (Chief Commercial Officer and CEO Designate)

Thanks, Deborah. Turning to vaccines, sales for Q2 were GBP 2.1 billion, up 9%, primarily driven by strong demand in Europe for SHINGRIX and our meningitis vaccines. SHINGRIX sales grew 6% in total, as our global expansion strategy is delivering with 72% of our sales now coming from outside the US. Growth was driven by launches and national immunization approvals in countries like France and Japan, and we remain confident in the ex-US opportunity.

Starting in Europe, SHINGRIX sales were up 48%, led by swift uptake in France and strong demand across several countries, including Spain, the Netherlands, Italy, and Greece. In the U.S., penetration is now 42% of the eligible older adult population, achieved in about half the time it took for older adult pneumococcal vaccines. With harder-to-reach patients, the immunization rates have slowed, as expected. In international, accelerated uptake in Japan, following expanded public funding in April, was offset by a tough Q2 2024 comparator, which included supply to our co-promotion partner in China and a rapid uptake in Australia.

In meningitis, our portfolio was up 22%, with strong double-digit growth across Europe and international, driven primarily by BEXSERO, the only MenB indicator for infants. In the U.S., where we have dominant leadership in the MenB adolescent market, we're excited to introduce our pentavalent vaccine, PENMENVY.

We expect this vaccine to simplify immunization schedules and contribute to increasing coverage and protection against serious life-threatening illness. Turning to RSV, obviously we are pre-season, but AREXVY sales increased 13%, maintaining market leadership in the U.S. older adult segment and benefiting from strong uptake in Germany. In the U.S., we're also pleased to see that earlier this month, the CDC confirmed the ACIP recommendation for adults aged 50 to 59 at increased risk.

In the current vaccines environment, we continue to expect this market will take time to build, but with our strong clinical profile and the most vulnerable populations, we remain confident long-term in the importance of this vaccine. Finally, our broad portfolio of established vaccines grew 6%, primarily due to favorable CDC stockpile movements for INFANRIX, PEDIARIX in the U.S.. Overall, our vaccines business is performing well amidst a challenging external environment.

Driven by the good half-one performance, we are increasing our outlook for vaccine sales today to decline, low single-digit to stable, and we remain confident in the medium and long-term prospects of this business and pipeline. Next slide, please. Turning to general medicines, which was down 6% as expected, following a very tough comparator for TRELEGY in Q2 of last year. As you may remember, TRELEGY was up 41% in Q2 2023, due in large part to significant adjustments in returns and rebates.

This quarter, TRELEGY grew 1% in the U.S. and 4% globally, despite the tough comp and pricing headwinds from the Medicare Part D redesign. TRELEGY is now in its eighth year on the market, and we are continuing to see all-time high shares with room to grow. Beyond TRELEGY, the rest of the general medicines portfolio was down, reflecting continued generic competition across the portfolio and adjustments in rebates and returns as expected.

We continue to expect sales to be broadly stable in 2025 and look forward to the opportunity we have in adding anti-infectives into this part of the business, with the approval of BLUJEPA for uncomplicated urinary tract infections in the US, which we'll launch later this year. We have also seen progress on Tebipenem, as Tony highlighted, an important oral option to keep complicated urinary tract infection patients out of hospital. I'll now hand over to Julie.

Julie Brown (CFO)

Thank you, Luke, and good afternoon, everyone. Next slide, please. Starting with the income statement for the quarter, with growth rates stated at CER. GSK continues to build momentum in 2025, with sales increasing 6%, driven by continued strong specialty performance, complemented by growth in vaccines.

Cost of sales for the quarter grew 7% ahead of sales due to pricing impacts and supply chain optimization charges. Core operating profit grew 12%, with strong leverage in the quarter delivered through a 1% reduction in SG&A, demonstrating our disciplined returns-based approach, and a 70% increase in royalties due to the upfront receipt from the IP settlement announced in April. Core EPS grew 15%, continuing to demonstrate our track record of delivering margin leverage and enhanced by lower interest charges, as well as the share buyback. Turning to total results, growth of 33% was largely driven by a favorable V of CCL movement, predominantly due to currency, partially offset by intangible asset impairments. Next slide, please.

This chart illustrates the margin improvement year-on-year. The operating margin improved in the quarter by 180 basis points, driven by SG&A and royalties.Whilst we continue to invest competitively behind product launches, SG&A improved the margin by 190 basis points due to phasing between the quarters and accelerated productivity improvements. As I mentioned, royalties were driven by the RSV IP settlement, the income from which is being reinvested in R&D this year, with priority projects accelerating this quarter.

Finally, whilst the portfolio and margin continue to benefit from the transition towards specialty, the Q2 fall in the gross margin was predominantly driven by lower RAR benefits year-on-year and by charges associated with supply chain optimization. Next slide, please. Turning to the cash flow, with commentary before the one-off impact of Zantac payments. Cash generated from operations was GBP 3.9 billion at the half, improving by more than GBP 1 billion and demonstrating our continued focus on cash discipline as we remain on track for more than GBP 10 billion CGFO in 2026.

The improvement year-to-date is driven by increased operating profit and favorable movements in RAR, partially offset by increased working capital, driven by higher AREXVY and SHINGRIX collections last year. Free cash flow improved by GBP 1.3 billion, driven by strong CGFO and the favorable phasing of tax payments. Zantac payments so far this year have totaled GBP 124 million, and we expect the remaining GBP 1.1 billion to be paid through the second half. Next slide, please.

Turning to capital allocation, we continue to deploy cash in a disciplined manner and underpinned by a strong balance sheet in line with our framework. Our net debt to core EBITDA remains broadly aligned with this time last year. Our priority is always to invest for growth, evidenced by the increasing investment in R&D together with the ongoing BD.

In the first half, we had outflows relating to a number of deals, including the acquisition of IDRx, and we will continue to look for opportunities, particularly in specialty, consistent with the size and frequency of recent deals. We have also made over GBP 2 billion in shareholder distributions in the first half through the dividend and share buyback program, which is progressing at pace, with more than GBP 800 million executed so far and with a total of GBP 1.3 billion expected to be completed by the end of the year.

Please note, in the second half, net debt is expected to include almost GBP 3 billion of outflows relating to the settlement of Zantac, the completion of efimosfermin, and the Hengrui collaboration, together with the ongoing share buyback. Next slide, please. GSK's momentum continues to build, and we are pleased with the performance this year.

We now expect to deliver towards the top end of our guidance ranges on sales, operating profit, and DPS, and we are adjusting our full-year guidance for specialty, HIV, and vaccines upwards. Regarding our 2025 P&L guidance, in line with our capital allocation priorities, we expect gross margin to benefit from product mix for the full year. We are accelerating investment in the pipeline and now expect R&D to grow ahead of sales.

We also remain committed to a low single-digit % growth in SG&A for the full year. Whilst there will be a step-up in investment in Q3 behind our upcoming launches, we will also see an acceleration of SG&A productivity initiatives with the associated charges and benefits in the remainder of the year.

Finally, net interest expense is now expected to be lower than previously guided at GBP 550 million-GBP 600 million due to the later phasing of Zantac payments. Our guidance is inclusive of tariffs enacted thus far and the European tariffs indicated this week. Obviously, more details are set to follow, but as we've said previously, we are positioned to respond with mitigation actions identified and confirm our guidance towards the top end of the range this year. Looking beyond, we remain very confident in our medium and longer-term outlooks to 2026 and 2031. Next slide, please.

Moving to our roadmap, which illustrates our progress towards major milestones and upcoming value unlocks. We have made good progress through the first half on our priority assets. Looking forward, we expect this momentum to accelerate. We continue to plan for launches in half two with Blenrep, BLUJEPA, and PENMENVY, adding to NUCALA COPD. The FDA regulatory decision for Depemokimab is due in December this year. Of the 14 scale opportunities that Emma mentioned, we will have pivotal trial readouts related to six of these over the coming 18 months. With that, I will hand back to Emma to close.

Emma Walmsley (CEO)

Thanks, Julie. To summarize, our results today confirm GSK's continued strong momentum and meaningful R&D progress for patients and for shareholders. Our portfolio is demonstrating quality and strength, and we now expect to be towards the top end of our financial guidance for 2025. Looking beyond, we're excited by the prospects in our pipeline and remain highly confident in our long-term outlooks. With that, I'll now open up the call for Q&A with all the team.

Operator (participant)

Thank you, Emma. I would like to remind everyone to please raise their hand to ask a question. First question comes from Simon Baker. Please go ahead, Simon. Simon, you have been unmuted and you can speak.

Simon Baker (Head of Global Biopharma Research)

Yeah, can you hear me now?

Emma Walmsley (CEO)

Yeah, we hear you.

Simon Baker (Head of Global Biopharma Research)

Thank you. Apologies for that. Yeah, two questions if I may, please. Firstly, just a clarification on camlipixant. Tony, you said they would both report in 2026. Slide 32 is still showing CALM--1 readout in H2 2025. When you said report, do you mean the full data and we will still get a Calm One headline press release in 2025?

The second question was related to Blenrep. We, like you, are assuming this is simply a potential delay rather than anything else. I just wanted to get your thoughts on what impact that has, firstly, on 2031 and the composition of the GBP 40 billion if those Blenrep revenues are pushed out slightly? Also, what it means for 2028, where the contribution from Blenrep now looks like it will be smaller and therefore the impact from the dolutegravir patent expire will be greater? Just how that, what the magnitude of that is, and also how that influences your M&A plans going forward? Thanks so much.

Emma Walmsley (CEO)

Thanks. I'll ask Tony in a second just to comment quickly on camlipixant. To be really clear, Simon, we are very pleased to have an updated PDUFA date in October. There is absolutely no change to our expectations around the ramp of Blenrep. We're really pleased with the, we're hoping to get into more than 10 markets actually by the end of this year. We're working hard and constructively with the FDA to be able to bring this to American patients too.

No change and fully confident in our, whether it's our 2028 outlooks or our 2031 outlooks. As you know, we keep adding to them with new prospects and ongoing BD. Specifically on your question on BD, it's quite exciting to me that three of the four pivotal trials that are starting later this year are, whether it's on efimosfermin or IDRx or our next gen of ADCs, are from great BD that we brought in.

Of course, we announced Hengrui this week, which is a really strategic play to accelerate early stage research and with a headline asset which might be best in class on the PDE 3-4s for COPD as well. Lots going on in BD and we'll continue at the kind of pace and scale we have been. No update at all except for reiterated confidence in terms of our outlooks and plans to add to them. Tony, anything you want to say on camlipixant?

Tony Wood (Chief Scientific Officer)

Yeah, Simon, thanks for the question. Just as an update and clarifying here, as I said before, CALM-2 is still recruiting. We're anticipating data in mid-year 2026. You'll also appreciate that typically we only disclose phase III studies involving two studies once both are completed. The formal disclosure associated with Calm One and CALM-2 will be in line with the CALM-2 schedule.

Emma Walmsley (CEO)

Great. Thank you. Next question, please.

Operator (participant)

Next question comes from James Gordon from JP Morgan. James, please go ahead.

James Gordon (Executive Director and Biotech Equity Research)

Hello, James Gordon, JP Morgan. Thanks for taking the questions. First question was also on Blenrep. A busy few weeks with the ODAC, and then it sounds like subsequent data added after the ODAC, and then some personnel changes at FDA with Vinay Prasad leaving. Without asking what the extra data is, just what is GSK's latest confidence in getting Blenrep approved in the U.S. this year?

Also, how important is Blenrep U.S. in keeping the margin flat through HIV LOE starting in 2028? If you did not have U.S. Blenrep, would you still be able to keep the margin flat? That is the first question, please. The second question, the PDE 3-4 that looks interesting from the Hengrui deal. I think we are paying like $10 billion to get Verona's PDE 3-4, but that is already on the market and you are paying about GBP 500 million, but it is quite a bit earlier.

Is the key differentiation that yours is DPI and theirs is nebulizer, or are there other areas where it is differentiated and you are only paying about 5% what Merck did? Is it just how far you are from market? It looks like a very good deal, but it depends how differentiated it is.

Emma Walmsley (CEO)

We definitely agree it is a very good deal. You know, the market deals is not how much you spend, it is the kind of returns you can get. We do believe we have a potentially best in class asset here in a field we know a lot about. Adding to that COPD portfolio. I mean, I think there are about seven questions in that, but in your first point on Blenrep, and just for everybody, as Tony said, we know you have got a lot of questions about that, but we hope everybody on the call understands how much we are committed to respecting the confidentiality of this process.

We are in constructive dialogue. We have high confidence in our data. We are answering questions and, you know, adding more to that. We will update you when we can. Just to reiterate, you know, we do not subsegment our peak year sales by country, obviously. The U.S. is important, but we are really pleased to have added, you know, by the way, since the ODAC, the across-the-board Europe approval, the Canada approval to the U.K., to Japan. You can rest assured that Luke is ramping up for launch preparations.

Of course, going slow to go big. You know, Blenrep is without doubt an important medicine. We are working towards the. U.S. approval. We want to bring this for American patients. When you think of this overall survival data in a head-to-head study against the standard of care, when you think that 70% of myeloma patients are in communities, and this is a medicine that allows people to be treated in communities. It will keep the conversation going there. I'll see whether Tony wants to add anything at all. He's shaking his head. Anything you want to say?

Tony Wood (Chief Scientific Officer)

Just simply again to emphasize that obviously we're in constructive dialogue, but we want to respect the confidentiality of that interaction. I'll update you as soon as I can.

Emma Walmsley (CEO)

Great. Thanks. Just because we want to get through as many questions as possible, I would respectfully suggest that we're not going to go much further than that on Blenrep today. Next question, please.

Tony Wood (Chief Scientific Officer)

Did you want to do the three?

Emma Walmsley (CEO)

Oh, sorry, the three four. Yes. Tony, maybe Luke would be good because I know.

Luke Miels (Chief Commercial Officer and CEO Designate)

You want to cover why you like the profile and I can, yeah, why we like the class.

Tony Wood (Chief Scientific Officer)

I'll start with why I like the collaboration for stock because the $500 million is also dedicated towards options to the other 11 innovative potential medicines that we have covering RI&I and oncology. Look, let me just describe the profile of the molecule itself. I would describe it in terms of its PD34 balance as being similar to Verona. That's important because it means that we can be confident in the efficacy and safety profile of the molecule. Whilst it's similar in balance, it's about twofold more potent across that and has demonstrated both clinically and preclinically both bronchodilation and anti-inflammatory effects.

That reduction in dose is important when one considers the optionality for a DPI. As Emma said, you know, we have an extensive experience there based on our own DPI portfolio, and I'm looking forward to developing that molecule in partnership. You know, we see potential really across the GOLD framework as an add-on therapy. Luke, if you want to add a bit more to that. Yeah, I mean, we've obviously looked at this class for a while, for a couple of years now. We like it. You know, I think initial uptake is pretty clear.

I think about 50% of the use is in very severe patients on top of standard of care, triple, et cetera. I think there will be a threshold where nebulization and the price starts to retard, let's say hypothesis anyway, starts to retard things. An alternative, you know, classical delivery. Approach, which is very synergistic with the rest of the portfolio, is exciting. The final thing I'd say is it's a good sign for COPD and NUCALA and COPD because clearly there's an appetite for new mechanisms in particularly the more severe COPD population.

Emma Walmsley (CEO)

Yeah, I mean, and we're really, you know, pleased with the agility, in fact, the aggression we've been showing on partnering for BD out of assets out of China, whether it's the ADC deal we did or the long-acting T-slip or now adding this. Of course, you know, some great science. We all know what's happening in the biotech industry there, but then that we can pick up. Partnering and then rolling through our internal or global ex-China clinical network and of course manufacturing if that's successful. Next question, please.

Operator (participant)

The next question comes from Michael Leuchten from Jefferies. Please go ahead, Michael.

Michael Leuchten (Analyst Global Med Innovations)

Thank you for taking my questions. Two please, one for Julie and one for Luke. Julie, you talked to the supply chain cost hitting COGS in the second quarter, and then your slides say you expect the gross margin to benefit from product mix, but it doesn't say the gross margin is going to go up. Can you just clarify what those costs might mean for the second half? Are they relevant or not?

A question for Luke, NUCALA COPD, you've got $500 million peak sales on the slide now. I thought in the past you talked to $500 million-$2 billion, I might be wrong, but have your expectations come down for that relative to previous communication? Thank you.

Emma Walmsley (CEO)

Definitely not. I'll say before Luke answers your question. Julie, do you want to pick up gross margin? Recognizing, remember that we have included in our guidance not only those enacted but those indicated in terms of tariffs. As that settles out with a bit more details to come, you know, we'll have more specificity. Julie, do you want to pick up on gross margin? Then Luke.

Julie Brown (CFO)

Yeah, sure. Thank you very much for the question. In terms of gross margin, we do anticipate some accretion this year. As you know, we took a charge for supply chain efficiencies in Q4 of last year of $150 million. We will be comping that coming up with the fourth quarter. Nevertheless, the big point is that the specialty growth, which is very considerable, is driving an improvement in our gross margin. If all else was equal, you would see that coming through.

What you see is causing some turbulence in the gross margin is one, supply chain optimisation charges are going through. The second one, as Emma just alluded to, is tariffs. Obviously, we have not had any tariffs in the first half. We are anticipating some coming in the second half, and that will lower the gross margin slightly. Even with the ones that have either been announced or indicated, we still see the opportunity for gross margin accretion coming through mix.

Emma Walmsley (CEO)

Great. Thanks. Luke, COPD.

Michael Leuchten (Analyst Global Med Innovations)

Yeah. Thanks, Michael. Look, I think 500 is fair, but of course we are going to aim above that. If I look at, you know, initial signs, we are already ahead of where DUPIXENT was at the same point in its launch with new patient starts. That is a good sign. The lead indicators are positive. Physicians clearly like the reduction in hospitalisation and ED department visits.

That certainly resonates with them. We are also, interestingly, winning in terms of the perception in the lower EOS patient as well, which is sort of naturally, historically, Dupi's hunting ground, which is encouraging. If you look at the market research, we have got, again early days, but 67% of pulmonologists say they are likely to prescribe NUCALA in COPD and prefer it versus only 30% with DUPIXENT. Really good execution so far. We have seen 91% of our key customers with a really good frequency.

Bang on there. I think balancing that back to your question is, you know, pulmonologists historically have not been as aggressive as maybe the evidence would support in terms of biologic penetration. Once we get more robust numbers, which will be, you know, IQVIA, the quant with the lag indicators, we will have a better picture. I think it is a good start and we will give you a fuller update at Q3 when we have got data, which of course is, you know, what counts, you know, quant-over-quant.

Emma Walmsley (CEO)

The only other thing I would say on this one is what we are aiming to do is be, you know, indisputable leaders in COPD medicines. That is the strategy that Tony has laid out with a comprehensive portfolio that we have added to, to be able to subsegment and treat this enormous burden of disease. You know, more than 300 million people. Third leading cause of death, 70%, as Luke said, of the costs related to COPD are hospitalisation. NUCALA is the only medicine with a demonstrated 35% reduction in hospitalisation.

Tony confirmed the start of the, depi COPD trial. One of the things that might contain over time the peak year sales of NUCALA is bringing a six-monthly IL-5 to COPD. Of course, we have the, you know, long act, we have the whole portfolio of assets that we've already started talking about. Exciting start. I think we've confirmed and reiterated $500,000 for this one, but let's see how it goes. Next question, please.

Operator (participant)

Next question comes from Sachin Jain from Bank of America. Sachin, please go ahead.

Sachin Jain (Analyst)

I think my questions, I've got two or three product ones, please. Firstly, on the same vein on depi, Luke, I wonder if you could just give us a better sense of launch. Is there anything about market expansion, NUCALA canalization, switches from competition? I guess specifically consensus is only $200 million for next year, which seems conservative relative to the launch you potentially describe.

Secondly, on SHINGRIX, I wonder if you could talk about continuation of the ex-U.S. trends and how much of those European launches are potentially boluses versus continuing. Thirdly, I will apologize, but I will try my arm once on Blenrep. Just want to understand why the data you've submitted you would not have used as part of the adcom debate if it was material enough to shift the debate you knew was coming. Thank you.

Emma Walmsley (CEO)

Sorry, it was not on purpose, but I did not actually hear the third question on Blenrep. Could you repeat it?

Sachin Jain (Analyst)

Why data that you've submitted you would not have used as part of the adcom debate if it is material enough to shift the FDA's view on a debate that you knew was coming, given you get the briefing documents well ahead of the actual adcom? Thanks.

Emma Walmsley (CEO)

We are not going to comment on that. Good try. Luke, would you like to answer the first two questions on ambitions around depi and SHINGRIX curves? Thanks.

Luke Miels (Chief Commercial Officer and CEO Designate)

Welcome back, Sachin. Look, I think on depi, you know, a lot of excitement. I think for anyone that has attended an academic meeting where the data has been presented, there is a lot of enthusiasm here and I will quote some numbers for the market research. Inside, of course. The track record of this team with NUCALA and execution for stock is very good. There is a high excitement there. I think with physicians, there is also high anticipation. We have really robust data here in controlled studies, and I think most people can. See that efficacy, but also have the imagination to understand in the real environment with less supervision that data hopefully should improve.

And we've got a program to capture that. Look, I won't go into the strategy and positioning, but you know, the testing response is really clear. When we've taken that profile and that strategy to pulmonologists, allergists, 94% of them are motivated to prescribe the product. 70% think it's more compelling than competitors. And 87% of patients, I cited this earlier, prefer it if the HCP would recommend it. We've done other forms of market research. Again, 86% of HCPs think it will be standard of care, and 82% would consider prescribing it. And that's before the launch, right? I mean, we don't have a field force out there. This is very organic.

Look, the biopen is 27 right now in severe asthma, around 12% in nasal polyps. And I've quoted this before, but if you look at biologics, at the end of 12 months, you've lost about 65% of those patients. So, you know, a combination of in-office administration, lower frequency of administration, a validated known target, excellent benefit risk profile, you know, I think it's going to be very exciting. We've also shown historically with TRELEGY that we can target the competition without disrupting our own business too extensively. So the hierarchy will be DUPIXENT first.

And then FASENRA, which makes sense. And the incentive scheme in the organization obviously will drive that. And there'll be limited points for switching NUCALA. So, yeah, very exciting there. If I go to SHINGRIX. So. Continuation of ex-U.S. trend, I mean, yeah, if you look at what's going on there, I mean. We like to do what we say we're going to do, and I think this is an example of that. It's not apples to apples, but because the U.S. has a much broader coverage, you know, you've got coverage from 50 years plus versus EU markets and Japan and others where they have a higher age cutoff. And even within countries and provinces, that can vary quite a bit.

But, you know, the U.S. is a steady client still. We've got 42%, so that's in line with what we've said, 3-5% penetration a year. Germany, we're about 26%. We had a bit of a soft August last year, and we've a lot of work there, but we've worked out what happened there, and we're now back on a good growth trajectory using a strategy that we're now employing in the U.S. and Japan.

This was based on the success we had in Australia, where we're approaching 40% penetration in that market. That was really targeting comorbid patients, promoting directly to specialists like cardiologists, allergists, rather than just a broad approach. If you look, you know, structurally, typically if you've got heavy funding, full funding, you've got penetrations, which are changing and growing between 8-29%, not including the U.S., and growing. If there's limited funding like the U.K., Spain, Italy, China, then you've got a penetration range of around 4-8%, but also growing. There is the opportunity, of course, to change that as we've seen in Japan.

Japan had limited funding. It's now got much broader funding. Actually, it's a key driver for SHINGRIX over and above France. If it's out of pocket, you've got penetration rates of 3-4%. Something to keep in mind for emerging markets. Yeah, I think there's remaining potential outside the U.S. We're still very focused on the U.S., but hopefully those numbers are helpful, Sachin, and answered your question.

Emma Walmsley (CEO)

Brilliant. Thanks. Next question, please.

Operator (participant)

Next question comes from Kerry Halford from Berenberg. Kerry, please go ahead.

Kerry Holford (Head of Global Pharmaceutical Equity Research)

Thank you for taking my question. Just maybe a broader U.S. question here. On any commentary you can give us more broadly on the discussions you've been having with the U.S. administration on tariffs, but also in the context of MFN. How have those discussions evolved, and how do you think the administration intends to balance those two items, introducing tariffs, offset, and balancing that with the proposed plans to lower drug prices in the U.S.? Any directional commentary you would be prepared to make at this point would be very helpful.

Secondly, also on this, on the focus here in the U.S., the Trump administration has indicated support for DTC, cash pay options for U.S. patients. Clearly, this is being utilized with obesity today. Is the DTC route to market a route that you would consider in the U.S.? If so, which drugs within your portfolio might best fit that approach? Thank you.

Emma Walmsley (CEO)

Yeah, thanks. First, in terms of tariffs. As we've said, we've included in our outlooks not only those that are enacted, but those indicated. It is important to reiterate that we're waiting on the 232 investigation, and the sort of specifics of that still need to become clearer. I think it would be fair to say that. You know, you always have to separate from the headlines to the reality of what's delivered.

And, you know, whilst on the one hand, we're now seeing numbers and indications that perhaps are not as high as in the first run of this, on the other hand, it is very, very real in terms of focused on U.S. manufacturing and sourcing. Now, the really good news for GSK, as I said last quarter, is we are well positioned on this. It's, you know. Since I started in this job, we prioritised together as a leadership team the U.S.

We've taken the business from being less than 40% to being more than 50% of the company now. In fact, our specialty business, which is where the pipeline's focused and the innovation's focused and the growth's focused, is two-thirds of that so far this year is in the U.S. So we're well positioned for that. We're well positioned on manufacturing. We broke ground on another new factory.

Some of the supply chain optimisations Julie referred to is also setting up some, you know, certain shifts of some of our production. Look, we'll continue to be agile around it, but I, you know, whilst we'd rather spend any incremental costs more on the pipeline. As you know, we prioritise spending on R&D, and we're pleased to be increasing that ahead of top line again this year. You know, we think we're, you know, positioned well to find solutions as this evolves. On MFN, still very much, you know, moving around, but I think. Alongside others, yes, we're in discussions. Yes, we really want to prioritise keeping the U.S. as the best market for innovation and also to deploy access to innovation and to make sure that we're passing on discounts given to patients so that medicines are sustainably affordable.

We also would like to see more countries investing in medicines, which is such a small fraction of the total cost of healthcare. That's why our pipeline is really important here, because so many of the examples we've talked to you about are cost sparing, whether it is COPD, or frankly, the fact that Blenrep can be community administered rather than, you know, long stays in hospital, whether it is the adherence of depi with that over 70% reduction, or of course, the best way to stop disease before it starts being vaccination.

You know, we continue to have that dialogue. You know, we will update you alongside others, no doubt, as it becomes clearer. Yes, I do think they are all interlinked. Alongside trade discussions. On DTC, that's definitely part of the things we're being open to. Maybe I'll ask Luke to comment on how we see some differences in the portfolio around that.

Luke Miels (Chief Commercial Officer and CEO Designate)

Yeah, thanks, Kerry. I think the first thing is the price has to be lower than someone can get it through their own program, their insurance program. Secondly, there are some products like BLUJEPA that could be amenable to that. We're looking more broadly at products like TRELEGY, and we've got an open mind. There's clearly an opportunity in certain sub-patient segments. We've seen that, as you mentioned, with GLP-1s. I think it's very much, as Emma said, a watching brief at this point, but we can move very quickly once things settle out and we know what the rules are.

Emma Walmsley (CEO)

Thank you. Next question, please.

Operator (participant)

Next question comes from Matthew Weston from UBS. Matthew, please go ahead.

Matthew Weston (Managing Director and Pharmaceutical Research Analyst)

Thank you. Hopefully, you can hear me. One quick comment and then two questions if I can. The quick comment is just to actually say Michael's right. The GSK Respiratory Investor Deep Dive Event, NUCALA COPD PESLs was $500 million-$1 billion. Anyway, we take your comments.

Two public questions if I can. CALM-1. Tony, the CALM-1 program does seem to be rolling back in terms of timeline now, second half of 2026. If we've got such unmet need in chronic cough, clear efficacy, what's holding patients and physicians back from signing up to the trial? Or are we wrong? We just had the timing too early. Secondly, I am going to chance my arm. Blenrep.

Emma Walmsley (CEO)

Go for it.

Matthew Weston (Managing Director and Pharmaceutical Research Analyst)

It's just on study design of the existing studies, which are still ongoing. Have you decided to change any protocols, recruit more US patients, or optimize anything in light of what you heard at the adcom?

Emma Walmsley (CEO)

I'm not sure there is going to be much to add on Blenrep for the reasons we've said, but Tony, if you want to add anything at all, please go ahead, and then perhaps you can answer on CALM-1. I will just say there is no change to our level of ambition on NUCALA COPD. Tony, do you want to comment on the other?

Tony Wood (Chief Scientific Officer)

Just simply in general on recruitment in forward-looking oncology studies where we're enacting extensive plans to ensure that we have greater US representation going forward. In the case of the studies we have conducted, they were not atypical with representation in myeloma studies, and we were careful to ensure that the outcomes and demographics we felt were consistent in European patients. But more importantly, going forward, we have an extensive focus on US representation. Then just, do you mind if I just run straight into camlipixant on that?

Emma Walmsley (CEO)

Yeah, I think it's worth clarifying this for people.

Tony Wood (Chief Scientific Officer)

Yeah. Look, first of all, there is nothing proving difficult about the camlipixant studies. You will remember earlier I identified that in COMM2 we'd been given the opportunity to add a larger proportion of higher frequency coughers into the study. That is the group for which we feel the pharmacology is more likely to be representative. In addition, you'll also recall that because of the difficulties that Merck encountered in the design, recruitment, and other features of the study, we are taking careful action to ensure that we have covered all of that, both in terms of pre-screening and other features associated with, for example, the cough counter.

As I said, COMM2 is proceeding on track as we planned. We are recruiting into the study right now. It is a six-month completion. When we get closer to full recruitment into that, I will know more about the precise date, but we are on track for middle of next year. As I said to Simon, we will, as we typically do with our phase III studies, where we have two studies ongoing, combine both results into the analysis before the submission. There is nothing behind that in terms of any difficulties associated with the study other than the plan that we've already described, which is ensuring that what we see as being the unique profile that camlipixant offers, both in terms of its efficacy.

Operator (participant)

I'll remind you, in the SOOT study, we saw a 34% reduction in cough frequency relative to placebo and in terms of its selectivity profile, which in simple terms is about 10 times better than gefapixant and is therefore likely to result in fewer dropouts and will certainly not unblind the study.

Emma Walmsley (CEO)

Right. Next question, please.

Operator (participant)

Next question comes from Peter Verdult from BNP Paribas. Peter, please go ahead.

Peter Verdult (Managing Director and Pharmaceuticals Equity Research Analyst)

Yeah, thanks, Constantin. Peter Verdult and BNP. Just two quick ones for you, Tony. Just following up from Matt. I hear your comments about adequate US trial representation in your key programs, but just a factual question. When we checked the DREAM10 first-line study, there are no US sites. Now, I know we can't talk about Blenrep. I will respect that. But it's a factual question.

Am I correct in that assumption that there are no US sites currently for DREAM10? And then secondly, on the Hengrui deal, after PD34, is there any other assets you can call out at this stage that might be entering the clinic in the next 12 to 18 months, or do we need to be a little more patient? Thank you.

Tony Wood (Chief Scientific Officer)

Yeah, let me just quickly deal with DREAM10. You're right on CLINICALTRIALS.GOV. It does not show our activities to recruit U.S. patients at this current point in time, but as I have said, we have extensive studies that we are enacting that will increase U.S. patient recruitment. Not just for DREAM10, but more broadly across the portfolio, including the new ADCs. Sorry, secondly, remind me of the second question. Thank you. Yeah. Look. In signing the deal, we contemplated the first four or five of potential options. I'm not going to disclose those in any more detail at this stage.

Emma Walmsley (CEO)

The key is they are all in areas that are core to core therapy areas for expansion for us. We will keep you updated as we roll those through.

Peter Verdult (Managing Director and Pharmaceuticals Equity Research Analyst)

Some of them will definitely be in the clinic next year?

Emma Walmsley (CEO)

Definitely.

Operator (participant)

Next question comes from Rajan Sharma from Goldman Sachs. Rajan, please go ahead.

Rajan Sharma (Pharma & Biotech Equity Research)

Hi. Thanks for taking my questions. Just wanted to get an update on BLUJEPA's launch. I think it was approved back in March, but it does not look like it is launched yet. It would be helpful to just understand timelines there and then expectations in terms of the launch trajectory, given that you have, I think, previously guided to more than $2 billion peak sales for that new anti-infective portfolio.

Obviously, based on the commentary, it looks like R&D expenses will be higher than previous guidance. Could you just help us understand what the drivers are? It does not look like there is any kind of materially large new trials that are kicking off in the second half of the year and maybe a couple are rolling off. That would be helpful there. Thank you.

Emma Walmsley (CEO)

Yeah, I am sure you may be able to do that because we do have four big ones, big pivotals kicking off second half. Luke, I mean, we will comment on BLUJEPA. We did say at the last quarter that because of formulary retiming, we are going to be a bit later with that launch, and it is a full portfolio of anti-infectives, but one we are very ambitious for. A long time since anyone brought in a new antibiotic. Julie first, and then Luke, please.

Julie Brown (CFO)

Yeah, thank you. The main R&D areas, we sat down as a team and looked at the areas we wanted to accelerate. Clearly, one of the main areas is the ADC portfolio, I think, as Tony's covered. We've got a large number of solid tumor opportunities with B7H3, which we are looking into to accelerate considerably this year and into next year. As Emma mentioned, we've got four pivotals now going through, three of which are BD-orientated or sourced, and one is our own. Those are the main areas. Tony, do you want to answer that?

Tony Wood (Chief Scientific Officer)

No, that's complete. It's four new phase three studies in the ADC portfolio expansion. Right. Luke?

Luke Miels (Chief Commercial Officer and CEO Designate)

Yeah, thanks, Rajan. As Emma said, we're talking to payers right now. Things should be more visible in Q3 with a full launch push in Q1 next year. If you just look at patients, there's around 15 million episodes of uncomplicated UTIs in the US, of which 3 million are individuals that are resistant to multiple classes or allergic to three or more antibiotics. That's the targeting population that we've got there.

We just wanted to do a little bit more work on the pricing. Also, we've had positive phase three results with Tebipenem, which I think is also very attractive, initially in complicated UTI patients who typically are admitted for ceftriaxone treatment. This is the option of keeping those patients off the pump, keeping them at home with patient benefits as well as cost benefits in the US healthcare system.

Emma Walmsley (CEO)

Yeah, and another trial stop for efficacy there. Excited to see what comes on Tebi. Next question, please.

Operator (participant)

The next question comes from Steve Scala from TD Cohen. Go ahead, Steve, please.

Steve Scala (Pharmaceutical Analyst)

Thank you so much. A few questions. First, I'm curious about trends of SHINGRIX in China through the distributor. Are things improving, getting worse, or somewhere in between? Yesterday, Merck implied that there were no signs of improvement for Gardasil, and issues could extend to 2026. Is the same true for SHINGRIX? Secondly, can we have an update on the pneumococcal vaccine program?

Will you initiate phase three in the 30 valent vaccine in adults? When do you intend to do that? Secondly, have you addressed the manufacturing issues for the pediatric vaccine? When does GSK expect data readout for the 24 valent in infants? Lastly, apologies, Blenrep, does the recent FDA SEBR leadership change alter the outlook in any way? The proximity of the news is quite curious. Thank you.

Emma Walmsley (CEO)

On the last one, there's no read across from that. Let's go to Luke, please, first on SHINGRIX in China, and then. Tony, an update on pneumococcal overall.

Luke Miels (Chief Commercial Officer and CEO Designate)

Thanks, Steve. Look, it's still challenging for all the reasons we explained in quarter three of 2024. However, there are some small, they're very small, green shoots. If you look at in-market sales, CDC, so market sales to CDC from GFA and the movement from CDC to the point of vaccination, there is a trend upwards for the last, yeah, it's three months from memory. But it's off a very low base, so heavy caution there.

The other thing is the CDC stock levels are declining, and they've been declining since about February of this year. It's not enough for us to trigger a major shipment to Zhifei, but it is at least pointing in the right direction. The other point I'd make is, we've done a lot of work on the strategy on the way forwards here. It's very clear, and we've got good alignment with Zhifei. It's a focus on the comorbid chronic disease subpopulation who are clearly higher risk. We seem to get better traction there.

The competition's pulled back, which has created a bit of room for us, and we've actually increased our share of voice to take advantage of that. All the other parameters like ATP perception, patient perception are pretty stable. Again, I won't say anything about 2026, but I would say we remain confident of the mid to longer-term opportunity in China, and we just need to stick at it. Finally, we're also doing some life cycle. Tony mentioned this before in terms of a dementia experiment within China itself. We'll keep moving forwards.

Tony Wood (Chief Scientific Officer)

Great. And then just quickly on MAPS, Steve. As far as the 24 valent platforms are concerned, both in adults and infants, we've learned enough from those platforms to move now to strategically prioritize the 30 plus vaccine. We feel that the characteristics of the MAPS platform are better expressed there, and I'm sure you'll follow that the field in general is going in that direction, and Merck's sort of more tailored approach is also encountering some issues associated with concerns with regards to the evolution of new serotypes like serotype 4.

We are on track with regards to starting our first in human for a 30 plus vaccine study at the end of this year, so you should expect readouts on that really in the first half of 2026. I'd say when you consider the progress we're making with regards to the 30 plus format and the competitive environment, we remain very much on track and competitive with the 30 plus vaccine, but that, of course, will be towards the end of the decade.

Emma Walmsley (CEO)

Right. Thank you. I think we have one more question.

Operator (participant)

Yes. Time for one last short question. Justin Smith from Bernstein. Please go ahead. Yeah. I think you should be able to speak, Justin. Okay. If that's not working, then we can also close the call.

Emma Walmsley (CEO)

Okay. Thanks very much, everyone, for joining. Delighted to be reporting another strong quarter, and this consists of the delivery of the consistent step-up of GSK. Since the separation and most excitingly, the R&D progress we continue to deliver. We're pleased to update our guidance for the year to being at the top end of the range and continue to be highly confident together of not only our short, but our medium and our long-term outlooks. Look forward to talking to you over the coming days. Thanks. Bye.