Results Presentation to Analysts Investors October JP Garnier Chief

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Results Presentation to Analysts Investors October JP Garnier Chief Powered By Docstoc
					                    3Q Results 2006
Presentation to Analysts & Investors

                     26th October 2006
           JP Garnier


Chief Executive Officer
Strong Q3 Performance
•   Pharmaceuticals sales +7% (US sales +14%)
•   EPS +21%
•   Positive financial outlook:

      – 2006 EPS guidance raised to “mid-teens” percentage growth

      – Share buy-back doubled to £2bn over next 12 months as part of
            £6bn programme over next 3 years

      – Expected 2006 dividend increased to 48p (2005: 44p)




All growth rates on a CER basis.
                                                                        3
Key Product News


   Tykerb/Cervarix



     Coreg CR



      FluLaval



                     4
Key Product News


   Tykerb/Cervarix       Promacta



     Coreg CR            pazopanib



      FluLaval       New Generation Flu



                                          5
        New Generation Flu Vaccine                                                                                  New
                                                                                                                    New
                                                                                                                    Data
                                                                                                                    Data
        Excellent immunogenicity in over 65s

                        3500     T- cell response nearly doubled

                        3000


                        2500
T-cell count/ million




                                                                                                • Excellent antibody response
                        2000                                                                    • Phase III trials underway

                        1500                                                                    • Filing expected in 2008

                        1000


                        500


                          0
                                 Traditional flu vaccine                   New Generation Flu
                                     (no adjuvant)                          (with adjuvant*)

                        I.Leroux-Roels et al., IVW 2006, Vienna, Austria
                        * GSK proprietary adjuvant                                                                              6
     Julian Heslop


Chief Financial Officer
Q3 Performance Summary
                                 3Q 06     3Q 05       %Change
                                  £m        £m       CER      £
Turnover                         5,642     5,471       7      3
Cost of Goods                    (1,222)   (1,184)     5      3
                                   21.7%     21.6%
SG&A: Excl. Legal                (1,595)   (1,694)    (1)    (6)
                                   28.3%     31.0%
Legal                               (22)    (190)
R&D                               (871)     (803)     11      8
                                   15.4%     14.7%
Other Oper. Income                  91       183
Operating Profit                 2,023     1,783      19     13
                                   35.9%     32.6%

% In Italics are % of Turnover
                                                                   8
Q3 Performance Summary

                     3Q 06      3Q 05      %Change
                      £m         £m        CER   £
Operating Profit     2,023      1,783      19    13
Interest               (17 )      (46 )
Profit Before Tax    2,022      1,753      21    15
Earnings Per Share    24.7 p     21.3 p    21    16

Tax Rate               29.5 %     28.5 %




                                                      9
Legal & Restructuring Costs and Asset
Sale Profits
                        3Q 06              3Q 05
                         £m                 £m

Legal Costs              (22)              (190)
Restructuring Costs     (124)                  (29)
Asset Sale Profits       63                    122
Theravance & Quest       22                    37
                         (61)                  (60)

                                - £1 million

                                                      10
US Dollar Trends
                                            2006      2005

      2.00
      1.95
      1.90
                                                                              ~$1.87
      1.85
$/£




      1.80
      1.75
      1.70
      1.65
      1.60
              Jan         Feb   Mar   Apr   May Jun     Jul   Aug Sep   Oct   Nov      Dec




Month end closing rates                                                                      11
Cash Flow
                                  3Q 06 £m      3Q 05 £m
Cash Generated from Operations       2,114         2,325
Taxation Paid                       (2,166)         (469)
Capex, Interest and Other             (452)         (280)
Free Cash Flow                        (504)        1,576
Dividends                             (619)         (568)
Purchase of Own Shares                (309)         (235)
Share Option Exercises                 17              4
Other                                  (48)           85
Net (Increase)/Decrease in Debt     (1,463)         862

                                  30th Sep 06   31st Dec 05
Net Debt                            (2,118)       (1,237)

                                                            12
Returning Cash to Shareholders



             Dividends

                   +
      Share Repurchases

                                 13
            David Stout


President, Pharmaceuticals
Q3 ‘06 Sales by Region

           Int’l
          £1.0bn
           +3%
                              Total Pharma Sales
                      USA
                     £2.6bn      £4.9bn +7%
        Europe        +14%
        £1.3bn
          0%




Note: CER % growth
                                                   15
Key Growth Drivers
 Respiratory          Diabetes                CNS   Anti-Viral    CV     Vaccines




   Advair           Avandia1            Lamictal    Valtrex      Coreg    Total
    £813m              £378m              £257m      £215m       £195m   £412m
    +14%               +11%               +27%       +26%        +32%     +5%




                                 Total £2.3 Billion +15%
                                        (47% of Pharma Sales)


Reported Q3 ’06 Global Sales and CER growth
1 = Sales shown are for the Avandia family                                          16
Seretide/Advair: Growth Continuing

                         Intn’l
                         £78m
                          +7%


                                      US
                    Europe
                                  £464m +17%
                  £271m +12%




               Sales £813 million +14%

% CER Growth
                                               17
Advair US Prescriptions Trends
                        Advair 4-week rolling average US Retail TRx volume
 400,000

                                                peak w/e 5/27

 350,000
               peak w/e 3/26

 300,000



 250,000



 200,000
          3




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              2003                         2004                          2005                    2006

Scott Levin/Verispan – US Asthma/COPD controller weekly TRx (data through October 13, 2006)                   18
Advair US Prescriptions Trends
                        Advair 4-week rolling average US Retail TRx volume
 400,000                                                          peak w/e 12/23
                                                peak w/e 5/27

 350,000
               peak w/e 3/26
                                                                                   FDA
 300,000                                                                         Advisory
                                                                                 (Nov ‘05)
                                                                                                            Seasonal
                                                                                                            upswing

 250,000



 200,000
          3




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              2003                         2004                          2005                       2006

Scott Levin/Verispan – US Asthma/COPD controller weekly TRx (data through October 13, 2006)                            19
Seretide/Advair
Near-term Growth Opportunities

• US - HFA MDI launched in October

• New dedicated COPD sales force

• TORCH now filed in both US and Europe

• Japan launch expected in 2007


                                          20
Avandia Family                 Q3 Sales £378m +11%


       Europe &
                                •   Strong growth in Europe and
        Intern’l                    Intern’l continuing
        £113m
         +26%
                                •   US reported growth impacted
                      US            by some de-stocking
                   £265m +6%




% CER Growth
                                                                  21
Avandia Family – Strong Growth Prospects

•   Regain physician confidence in supply
•   Drive earlier combination treatment
    – Avandamet 1st line launched July 11th
    – Avandaryl launched 1Q06
    – Evidence-based treatment guidelines call for earlier
       • use of TZDs
       • combination of oral medications
•   Landmark Outcomes Trials



                                                             22
Landmark Outcomes Trials
                        Results announced Sept ’06

                          Avandia reduced risk of
                                                     To be filed with FDA
DREAM                       progression to type II        in 1H2007
>5000 pts. 3 yr study        diabetes by 62%




                                                                            23
Landmark Outcomes Trials
                        Results announced Sept ’06

                          Avandia reduced risk of
                                                     To be filed with FDA
DREAM                       progression to type II        in 1H2007
>5000 pts. 3 yr study        diabetes by 62%



                           Results due Dec 4th
                                 Avandia
                               vs metformin              GSK webcast
ADOPT
>4000 pts. 4 yr study
                              vs sulfonylurea             scheduled

                               in 1st line use



                                                                            24
                                      Sales £195m +32%
                             Coreg
2,750            US Quarterly TRx volume (000)




2,500
                                                    Approved Oct. 20th


2,250




2,000
          3Q05      4Q05     1Q06    2Q06    3Q06


Source: Verispan, VONA                                                   25
                                                                               New Market Opportunity




                                                                                                                                     Coreg’s estimated share of ß Blocker market by indication
                                                     35,000                                                                    40%
Estimated annual TRx BB volume by indication (000)




                                                              Beta-Blocker Volume
                                                              Coreg Market Share
                                                     30,000                             32%
                                                                                                                               30%
                                                     25,000
                                                                   22%
                                                     20,000
                                                                                                                               20%
                                                     15,000

                                                     10,000                                                   8%               10%

                                                      5,000

                                                         0                                                                     0%
                                                                Post-MI LVD         Heart Failure   Complicated Hypertension



Source: GSK estimates based on VONA TRx data, SDI March 2006.
                                                                                                                                                                                                 26
Three Rising Stars – Continued Strength

                                                                      £57m +61%


                                                                      £70m +71%


                                                                      £60m1 >100%
                                                                      (GSK share: £27m)


           GSK Q3 Combined Sales £154m +96%
CER growth rates
1 = Total Boniva - includes markets where Roche and GSK co-promote.                       27
                                       RLS Continues
                                       to Drive Growth
                           Requip
750,000            US Quarterly TRx Volume           •   3Q06 Sales £70m +71%
                                                     •   Requip CR for RLS filed
                                                         Oct. ‘06
                                                     •   Requip 24-hour for
550,000
                                                         Parkinson’s expected file
                                                         in 4Q06


350,000




150,000
            3Q05         4Q05   1Q06   2Q06   3Q06


Source: Verispan, VONA                                                               28
                                                     Share Gains Continuing
                                                                     Boniva
                                                               Monthly NRx Share
  15%                                                        US Bisphosphonates mkt                                                     14.1%



  10%


    5%
                                                                                  BP market is $3.4bn growing +12%
                                                                                        (MAT August 2006)


    0%
                  5              5             5        05          05                6            6              6             6        06
               r-0          -0            -0          p-          v-           n-
                                                                                  0
                                                                                                r-0          -0            -0          p-
             a            ay           ul                                    a                a            ay           ul
         M            M              J             Se          No        J                M            M              J             Se


Co-Promotion with Roche
Source: Market share Verispan, VONA; BP market value per IMS National Sales Perspective.                                                        29
Key Opportunities in 2007




                            - - New ACS indication - -




                                            For POI


                       H5N1 vaccine
                                                         30
31