GlaxoSmithKline PLC

LSE:GSK

Earnings Call Transcript 2022-Q2

[Operator]

Good afternoon, ladies and gentlemen, and welcome to the Analyst Call for the GSK Second Quarter 2022 Results. I will now hand you over to Nick Stone, Head of Global Investor Relations, who will introduce today's session.

[Nick Stone, IR]

Thank you, operator. Hello, everyone. It's Nick as mentioned. Welcome to our First Half and Q2 2022 Conference Call and Webcast for Investors and Analysts. This is our first quarter as an new biopharma company, and earlier today, the presentation was posted at gsk.com. It was also sent by e-mail to our distribution list.

Please turn to Slide 2. This is the usual safe harbor statement, and we'll be making comments on our performance using constant exchange rates, or CER, unless otherwise stated.

As a reminder, GSK satisfied the formal criteria according to IFRS 5 for treating Consumer Healthcare as a discontinued operation effective from 30th of June 2022. The Consumer Healthcare business was demerged on 18th of July to form Haleon, and as a result, we're presenting continuing operations for GSK.

Earlier today, Haleon also published a trading update and will be announcing its Q2 results in September.

Please turn to Slide 3. This is today's agenda, where we will plan to cover all aspects of our half year and Q2 2022 results. The presentation will last only 25 minutes with a further 40 minutes for questions. [Operator Instructions].

Today, our speakers are Emma Walmsley, Hal Barron, Luke Miels, Deborah Waterhouse and Iain Mackay. For the Q&A portion of the call, we'll be joined by Roger Connor and David Redfern.

Turning to Slide 4. I'll now hand the call over to Emma.

[Emma Walmsley, CEO & Director]

Thanks, Nick, and a warm hello to everybody joining our half year and Q2 conference call today.

Please turn to the next slide. I'm pleased with the momentum we're announcing today. We're delivering a landmark year, the most significant corporate change for GSK in 20 years and a new chapter of competitive and profitable growth. GSK is now a focused global biopharma company with the ambition and purpose to unite science, technology and talent to get ahead of disease together. It's a company focused on the science of the immune system, human genetics and advanced technologies with world-leading capabilities in vaccines and medicines development across 4 therapeutic areas.

In delivering our strategy, we have made and will continue to make significant improvements in both R&D productivity and operating performance, unlocking the potential of GSK. Our bold ambitions are reflected in commitments to growth and a significant step change in delivery. Through the demerger, we've also strengthened our balance sheet, creating new flexibility to invest in sustaining growth and innovation.

These bold strategic steps enable us to deliver for patients, shareholders and our people on our 5-year ambitions and beyond.

I'm delighted by today's first half results. They demonstrate that our strategy is delivering the step change in performance we committed to with double-digit sales growth of 25%, adjusted operating profit growth of 26% and adjusted EPS growth of 27%. This performance supports my strong confidence in our medium-term outlook.

The first half sales growth was driven by strong commercial execution across the whole portfolio. And alongside this excellent performance, we continued to invest in R&D with further strategic business development to support our pipeline momentum.

Given our momentum and these very encouraging results, we're increasing our full year guidance, excluding COVID solutions to between 6% to 8% sales growth and 13% to 15% adjusted operating profit growth.

Please turn to Slide 7. I Q2 was another strong quarter of growth. Sales increased 13% to £6.9 billion. Adjusted operating profit grew 7% to more than £2 billion, an increase of 21%, excluding COVID solutions, adjusted EPS grew 6% to 34.7p.

Specialty Medicines grew 35% to £2.7 billion, benefiting from strong demand for Dovato and Cabenuva in HIV. Excluding Xevudy, sales increased 13%. Vaccine sales grew 3% to £1.7 billion, driven primarily by Shingrix, which delivered another quarter of record growth with sales more than doubling to £731 million. And excluding pandemic vaccines, sales grew 24%.

And General Medicines also increased 2% to £2.5 billion, reflecting the strong growth of Trelegy in respiratory. In SG&A, we continue disciplined cost control while prioritizing investments in growth to support launches in Specialty Medicines and Vaccines, particularly Shingrix as we accelerate international expansion and invest for further growth.

In R&D, we increased investment in Specialty Medicines to support our early-stage HIV portfolio, while also investing in our late-stage vaccine portfolio and mRNA tech platform. You'll hear more about our commercial and financial performance from Luke, Deborah and Iain in just a moment.

Turning to Slide 8 and our pipeline headlines. Our focus on the science of the immune system, human genetics and advanced technologies is reflected in the excellent progress and strength of our late-stage pipeline. We were the first to announce positive Phase III results with our RSV vaccine candidate in older adults demonstrating statistically significant and clinically meaningful efficacy and exceptional protection.

We also announced encouraging Phase IIb data for bepirovirsen in chronic hep B. This is a disease with a very significant unmet medical need and is responsible for over 900,000 deaths each year. In a moment, I will provide more details on these and our broader pipeline momentum.

We also completed the acquisition of Sierra Oncology and announced the proposed acquisition of Affinivax. Both of these transactions are excellent -- of strategic business development to develop a strong portfolio of innovative vaccines and specialty medicines that will deliver sustained growth through the decade and beyond.

So this is an exciting year with strong momentum, and I'm pleased with the progress we're delivering. And now over to team. Hal, first to you, on Slide 9.

[Hal Barron]

Thank you, Emma. Next slide, please. I will take the next few minutes to review the recent progress in our pipeline and key expected news flow over the next 12 to 18 months. This slide updates one that we presented in June 2021 at our -- at this event, we highlighted that based on assets launched between 2017 and 2021, and our R&D performance was top quartile relative to industry peers. Furthermore, these launches are expected to contribute over 60% of of the 2021 to 2026 sales CAGR for GSK.

In addition, the balance of the sales growth on a risk-adjusted basis is expected to come from anticipated approvals from medicines and vaccines in the pipeline. As you can see here, I'm pleased to say we have made tremendous progress against these commitments.

Based on the robust results of the ASCEND Phase III program, we completed both U.S. and EU regulatory submissions for daprodustat in the first half of 2022 and we now look forward to a decision from the FDA by February 2023.

During the first half of this year, we also received approval for Apretude,the first -- the world's first long-acting injectable for the prevention of HIV. The biggest news from our pipeline, of course, was the exceptional Phase III data we announced last month from our RSV vaccine trial for older adults, which Emma just mentioned.

We also presented impressive data for bepirovirsen, which I'm going to call bepi from now on in the treatment of hep B. I'll touch on both of these assets later. Looking ahead, we remain on track to report pivotal data for several assets on this list with several potentially important readouts in the second half of this year. Importantly, as you know, we've been very active on the business development front, augmenting our pipeline with 2 important deals. First, the acquisition of Sierra Oncology, which includes momelotinib, a potential new treatment for symptomatic myelofibrosis patients with anemia.

Our proposed acquisition of Affinivax will provide us with a next-generation 24-valent pneumococcal vaccine candidate as well as access to an innovative MAPS technology, which may generate vaccine candidates with higher valency and higher immunogenicity compared to existing options.

Finally, I wanted to mention our early-stage pipeline activity. We've initiated 10 Phase I/II studies in the first half of 2022 alone, including our PVRIG antibody in oncology and a capsid inhibitors in HIV. Importantly, I'm also pleased to report that interim data from our Phase Ib randomized controlled study of anti-CCL17 in osteoarthritis was positive, demonstrating reduction in knee pain intensity compared to placebo at the end of the 8-week dosing period. We're proceeding with discussions with regulators to inform our future development of these this molecule.

Now please turn to Slide 11. In June, we were excited to announce positive pivotal Phase III data for our RSV vaccine candidate for older adults. RSV remains one of the few major infectious diseases without a vaccine, and RSV infections are associated with around 360,000 hospitalizations and over 24,000 deaths worldwide each year. Our vaccine candidate contains a prefusion RSV F glycoprotein antigen combined with our proprietary ASO1 adjuvant. The adjuvant was designed to address the natural decline in the immune system linked with aging and the vaccine is the first to report statistically significant and clinically meaningful efficacy in a Phase III trial.

Importantly, the magnitude of effect observed in this trial was consistent across both RSV A and RSV B strains and across key secondary endpoints, including people aged over 70 in patients with comorbidities and in the prevention of severe respiratory disease.

The trial will continue to generate data for 3 years following a single and annual revaccination schedule. We look forward to sharing these exceptional data with regulators in the second half of this year. We believe this puts our RSV older adult vaccine candidate on track to be considered at the June 2023 ACIP meeting.

Slide 12, please. Last month, we were also excited to present interim end-of-treatment data from the 457 patient bepi monotherapy trial B-CLEAR at the EASL International Liver Congress. The current standard of care for HPV patients includes antiviral plus interferon therapy. Existing treatments rarely result in a functional cure. And as a result, hepatitis B remains a significant unmet medical need with 300 million people worldwide living with hep B, which is responsible for approximately 900,000 deaths each year.

Our ambition is to develop a functional cure for patients with hep B, eliminating the need for prolonged therapy, and by doing so, reducing the long-term risk of developing cirrhosis and liver cancer. The data presented at EASL demonstrated that bepi was effective in lowering hepatitis B surface antigen below the lower limit of quantification. This is the first time that any monotherapy agent has been shown to reduce hep B surface antigen below the lower limit of quantification in more than a handful of patients.

What appears to be driving this unique effect is bepi's novel mechanism of action. As described in a poster at EASL, in addition to lowering HPV surface antigen, bepi appears to uniquely activate the TLR pathway in the liver. This activation appears to stimulate an immune response, which helps clear the virus, which we hope will result in functional cure for some of these patients. We will continue to monitor the patients in the B-CLEAR study to assess the durability of this remarkable response, and we expect to present these data later in the year.

However, based on the strength of the B-CLEAR data set to date, we plan to initiate a Phase III monotherapy program in 2023. Additionally, we expect to report the data on the B-TOGETHER trial, which looks at bepi followed by PEG interferon. While interferon has a well-known tolerability burden, we are cautiously optimistic that this study will augment the data seen in the monotherapy setting.

Turning to Slide 13. This year's ASCO meeting saw an increased cadence of presentations on our growing oncology pipeline, including data from 6 potential new medicines within our portfolio. In particular, I want to highlight the pivotal data MOMENTUM from momelotinib, the groundbreaking data from gemperlian rectal cancer and the first publication of data from our Blenrep plus GSK combination study, DREAMM-5. I want to briefly review the latitude data sets on the next slide.

While Blenrep continues to deliver strong activity as a single agent, we're investigating how to advance this important medicine into earlier lines of therapy using different dosing schedules -- . The GSI combination is one potential solution because it may allow a marked reduction in Blenrep dose, while maintaining a similar efficacy rate. This, in turn, brings the potential for reduced ocular toxicity.

We were, therefore, pleased to share the preliminary at a from the GSA combination cohort of the DREAMM-5 substudy at ASCO. This showed encouraging signs of activity with an overall response rate of 38%, similar to that of the DREAMM-2 study, but with lower rates of ocular adverse events and only 7% of patients reporting a Grade 3 or worse event.

Subsequently, at EHA, data were presented by -- at all in the frontline setting using an 8-week dosing schedule with lower doses of blend room. This regimen resulted in a very high response rates, with much lower rates of ocular side effects than has been seen with a standard 3-week dosing schedule.

I also wanted to briefly mention the extraordinary trial Jemperli or destatomab, in patients with DMR locally advanced rectal cancer in the neoadjuvant setting. This trial, which is awarded the coveted Best of ASCO data showed its unparalleled response rate with each of the first 14 trial participants who completed 6 months of therapy reporting a clinical complete response. These data suggest the potential for a chemotherapy-free treatment with curative intent for this difficult-to-treat population, and we look forward to working with regulators to identify a path forward for registration.

Please turn to Slide 15. My final slide lists a number of the key clinical and regulatory events expected over the next 12 to 18 months. As I noted, we'll see data from across the portfolio with pivotal results anticipated for otilimab and our vaccine candidate, MenABCWY. In addition, we hope to see data from Blenrep in third-line multiple myeloma patients and potentially an interim analysis for gepotitisin for the treatment of patients with uncomplicated urine tract infection. We also anticipate data from the head-to-head PRLA study, which looks at Jemperli plus chemo versus pembrolizumab plus chemo in the treatment of patients with non-small cell lung cancer. The PERL study is not intended for registration, but will inform future development plans for our PD-1 antagonist.

Finally, this is my last quarter presenting our R&D progress. So let me close by saying how delighted and proud I am of the achievements of the R&D organization since I joined in 2018. We've made considerable progress against our objectives to improve productivity in the pipeline and embed significant cultural trains across R&D. Assets within our development pipeline are now supported by genetic data, which we believe will increase the probability of success, and we expect to accelerate the cadence of new product introductions.

I'm also incredibly proud of and confident that my successor, Tony Wood, will build on these achievements and further accelerate our R&D delivery. Tony is an outstanding scientist and an inspiring leader and I look forward to contributing to the next chapter of growth for GSK as a Non-Executive Director.

With that, I will now hand it over to Luke.

[Luke Miels, Chief Commercial Officer]

Thanks, Hal, and I'll miss saying that. Please turn to Slide 17. So I'm pleased to say our Vaccines performance was very strong with sales growth of 24%, excluding the impact of the prior year pandemic vaccine sales. The growth -- continued recovery of Shingrix, where we delivered another record quarter of turnover. The strong Shingrix performance reflected good demand and a focused commercial effort in the U.S. to extend shingles vaccination throughout the year which led to steadier TRx volumes in half 1, higher engagement in nonretail settings and an earlier-than-anticipated channel inventory build.

In Europe, we continued to see strong demand in Germany and contributions from new launch markets as Shingrix becomes more widely available. Shingrix is now in 23 countries globally, and we are unconstrained on supply and remain on track to expand to more than 35 countries by 2024, making Shingrix available in around 90% of the global vaccine market.

We remain on track for a record year with strong double-digit sales growth this year. Previously, we had expected sales to be weighted to the second half. But following the earlier-than-anticipated channel inventory build, we now expect slightly lower sales in half 2 than in half 1, reflecting an anticipated 1 million doses of inventory burn.

Shingrix is the key driver of this year's expected sales growth in vaccines, excluding pandemic solutions, and we now expect Vaccine sales to grow by low to mid-teens up from low teens previously.

So please turn to Slide 18. In Q2, our Specialty Pharma business, including HIV, continued to deliver strong performance with 13% growth. Deborah will cover HIV momentarily. This excludes the pandemic solution sales contribution from Xevudy, which delivered an additional £466 million during the quarter. Benlysta delivered another quarter of double-digit growth. our market-leading lupus medicine in the U.S. is also benefiting from increased contributions from China, Japan and the European markets driven by our expanded indication for lupus nephritis.

For Nucala, our IL-5 biologic, which is broad, has a broad and differentiated indication approved across our 4 eosinophilic diseases, delivered strong growth as it remains the leading IL-5 in markets like the U.S. Japan and the EU 5. And our leadership in the IL-5 space is underscored by our life cycle innovation commitments with Phase III trials for Nucala and COPD and our long-acting IL-5 depomocamab ongoing.

In oncology, sales increased 23% as we're seeing signs in the U.S. of ovarian cancer and surgery rates stabilizing. We're well positioned as the market recovers with half of the new first-line ovarian cancer maintenance patients receiving Zejula.

And finally, I'd also like to point out that our Gen Med portfolio delivered a fifth consecutive quarter of growth, up 2% in Q2 with strong growth from Trelegy across all regions, which more than offset the decline of older established products in the quarter. Trelegy is the #1 triple therapy in COPD and asthma in the U.S. with market shares above 50% in each.

And I'll now pass to Deborah on Slide 19 to review the performance of HIV.

[Deborah Waterhouse, CEO, ViiV Healthcare]

Thanks, Luke. Our Q2 performance demonstrates a progressive acceleration of growth underpinned by our oral drug, Dovato, and our cabotegravir-based long-acting injectables for the treatment and prevention of HIV. HIV sales were £1.4 billion, with growth of 7% in the quarter and 10% in the first half. Performance benefited from strong patient demand for our innovation portfolio, which comprises Dovato, Cabenuva, Juluca Rukobia and appetite and a favorable U.S. pricing mix. This was partially offset by the unfavorable phasing of Tivicay tenders.

Momentum is firmly behind our innovation portfolio, which delivered more than £1 billion in the first half of the year and now accounts for 41% of our sales. Our ambition for the year is to deliver mid to high single-digit sales growth.

Our business delivered strong growth in the U.S. and in Europe, growing at 13% and 17%, respectively, this growth was underpinned by strong commercial execution across the portfolio.

Dovato continues to perform or delivering £320 million of sales in the quarter, which represents 66% year-on-year growth. Market performance firmly reflects prescriber belief, and we were delighted to see that through this quarter, Dovato reached the milestone of £1 billion of rolling annual sales with further significant growth potential beyond.

Performance in Europe is particularly strong with market share for Dovato at around 13% and the leading position in switch.

Turning to our injectable portfolio. Cabenuva, also known as for -- in Europe is the worst-in-class long-acting treatment regimen for HIV. Sales almost doubled in the quarter, delivering £72 million 11,000 patients are now taking Cabenuva, an increase of 5,000 through this quarter and around 1,200 HCPs are prescribing the medicine. The approval and launch of the every 2-month dosing in the U.S. in February and the removal of the -- leading requirement in the U.S. has simplified and improved patient experience and delivered a significant inflection for this injectable therapy. Underlying patient demand is high and we are, therefore, very confident about the potential of this medicine to transform the treatment paradigm of HIV.

Moving on to prevention. Apretude is the world's first long-acting injectable for the prevention of HIV dosed every 2 months. It was launched in the U.S. in January 2022. This quarter, we received the J code for Apretude, which is an important step as it enables prescribers to buy and bill and simplify reimbursement for the medicine. With around 1,700 patients already taking Apretude in the U.S., we have high levels of ambition for this medicine and launch activity continues to center on building awareness and access.

I'm pleased with the progress we have made in negotiations with the Medicine Patent Pool to enable access to Cab LA for prevention in resource-poor settings. We look forward to providing further updates at the International AIDS Conference, which is taking place in Montreal in a few days' time.

I will now hand over to Iain. Next slide, please.

[Iain Mackay, CFO & Executive Director]

Thanks, Deborah. As I cover the financials, references to growth are at constant exchange rates, unless stated otherwise. Turning to Slide 21. Firstly, this presentation is based on the continuing operations of GSK, as Nick noted earlier. For the second quarter of 2022, commercial operations turnover was £6.9 billion, up 13%. And adjusted operating profit was £2 billion, up 7%. Total earnings per share were 17.5p, down 58%, while adjusted earnings per share were 34.7p, up 6%.

The main adjusting items of note between total and adjusted results for Q2 were in transaction related, which primarily reflected the ViiV contingent consideration liability movements, the majority of which related to foreign exchange, and in Other, which reflected an unfavorable comparison of a £325 million credit in Q2 of 2021, resulting from the revaluation of deferred tax assets following the enactment of the proposed change in the U.K. corporation tax from 19% to 25%.

Endemic Solutions reduced growth of adjusted operating profit by approximately 14 points and growth of adjusted EPS by around 18 points. The Q2 currency impact was a favorable 6% on sales and 17% in adjusted earnings per share.

Please turn to Slide 22. My comments from here onwards are on adjusted results, unless stated otherwise. Total sales growth was 13%, driven by strong performance across commercial operations as all product areas benefited from increased demand. Excluding pandemic-related sales, growth was 10%. Luke and Deborah have taken you through the commercial performance in the quarter and the key turnover dynamics, and I'll make comments on sales outlook shortly.

Turning to Slide 23. The second quarter margin of 29% was slightly higher as the margin benefited from operating leverage driven by strong sales growth, product mix, excluding Xevudy, higher royalty income and favorable currency movements, which were a 2.4 percentage point benefit in the second quarter. These factors were partly offset by the impact of lower margin sales of Xevudy.

COVID Solutions reduced adjusted operating profit growth by approximately 14 percentage points and reduced the adjusted operating margin by approximately 4.4 percentage points at constant exchange rates.

Within the cost of goods sold increased primarily related to sales of lower margins of Xevudy, which increased the cost of sales margin by 4.7 percentage points, mainly reflecting the profit share pay-away to VR. Excluding Xevudy, older a 60 basis point benefit to margin, driven by favorable business mix with 61% of commercial operations sales ex pandemic being from Specialty Medicines and Vaccines compared to 57% in the second quarter of last year. This mix benefit was partly offset by a modest increase in commodity prices and freight costs, which we continued to manage closely.

SG&A increased a similar rate to sales in the quarter, which reflect an increased level of launch investment in Specialty Medicines and Vaccines. This was particularly focused on HIV and Shingrix to drive post-pandemic demand recovery and support marketing -- . The growth also included some increased freight and distribution costs. These factors were partly offset by continued delivery of restructuring benefits. Taking into account the commercial investment to date, we now expect SG&A to increase slightly above the rate of sales growth this year.

R&D was broadly stable in the second quarter, which primarily reflected the ongoing benefit of efficiencies from the one R&D restructuring program, the benefit in the comparator with regards to the timing of completion of several late-stage programs, including COVID-19 investments in 2021. These factors were largely offset by increased investment in vaccines across mRNA technology platforms, ongoing late-stage trials and the acceleration of several early-stage programs. There were also increases in early stage HIV programs.

In the remainder of the year, we would expect the R&D run rate to increase in part reflecting phasing and in part reflecting incremental investment following the Sierra Oncology acquisition and anticipated at -- deal.

For the full year, given the dynamics we've seen in the first half, alongside our upgraded guidance for the full year sales growth, we now expect R&D to increase their rates slightly below sales.

Royalties benefited from the contribution of Biktarvy and higher sales of Gardasil. The first half adjusted operating profit grew 26% to £4 billion and operating margin of 28%, reflecting strong operating delivery. The commercial contribution of COVID solutions -- adjusted operating profit growth by around 1 percentage point.

And I'll cover the outlook in a moment. Turning to Slide 24. Moving to bottom half of the P&L, I'd highlight that the effective tax rate of 15.2% reflected the timing of settlements with various tax authorities and higher noncontrolling interest charges related to an increased allocation of ViiV profits.

On the next slide, I'll cover cash flow. In the first half, we generated £1.7 billion of free cash flow and cash generated from operations of £3.9 billion from continuing operations. The key drivers of higher free cash flow were as follows: a significant increase in operating profit, including the upfront income from the Gilead settlement in February; a favorable foreign exchange impact; and favorable timing of collections and profit share payments for Xevudy sales.

These factors were partly offset by lower proceeds from disposals, increased contingent consideration payments reflecting the Gilead settlement, higher capital expenditure and a higher seasonal increase in inventory.

Turning now to guidance on Slide 26. GSK has delivered first half performance ahead of its existing full year guidance as expected based on strong business delivery and the dynamics of prior year comparators. As Emma outlined earlier, with that performance to date and the momentum it provides, we're raising our guidance for sales to increase between 6% to 8% and adjusted operating profit to increase between 13% to 15%, excluding COVID Solutions.

For both sales and adjusted operating profit, we would expect Q3 growth below full year expectations given the stronger comparator of last year and a Q4 growth to be higher than Q3 given the more favorable comparator in 2021.

With regards to phasing considerations for the year to go, there are several factors which will influence the outturn. These include sales delivery within the upgraded range given the more challenging second half sales comparator. This includes the Shingrix stocking effect Luke covered earlier as well as ongoing generic competition in General Medicines, product mix, phasing of R&D spend as we step up investments strengthening our pipeline and technology platforms, continued investment through supporting new launches and broader targeted business improvements such as further investment in data and analytics. The continued risk from COVID dynamics as we head into the Northern Hemisphere autumn and winter seasons and any possible developments in the current uncertain global macroeconomic environment.

In terms of expectations for adjusted earnings per share, both including and excluding COVID Solutions, we would expect growth around 1 percentage point below adjusted operating profit, reflecting lower associated profits -- sorry, lower associate profits.

On COVID-19 Solutions, specifically, the majority of expected sales for 2022 have been achieved in the first half of this year. Based on known binding agreements with governments, we expect that sales will be substantially lower in the second half. Compared with 2021, sales will be at a reduced profit contribution due to increased proportion of lower margin Xevudy sales.

Given more than expected sales to date, we now expect this to reduce overall GSK adjusted operating profit growth by between 4 to 6 percentage points. With respect to dividends, dividends declared in Q2 and those expected for the remainder of the year are in line with the existing expectations adjusted for the impact of the share consolidation completed on the 18th of July. Accordingly, GSK will pay 16.25p per share for Q2.

For the second half, GSK expects to pay a 27.5p per share dividend, which is equivalent to 22p per share previously indicated before the share consolidation. For 2023, we expect to pay a 56.5p per share dividend.

Turning to balance sheet. With the demerger of completed, we have now received the £1.1 billion demerger dividend and half our 13.5% retained stake in -- that we intend to monetize in an orderly manner. This strengthened balance sheet supports our clear capital allocation priorities of further strengthening the pipeline, investing in new product launches and delivering dividends to shareholders.

Taking all this together, we remain firmly on track to deliver the step change in performance for 20, 2022 first referenced at our investor update in June last year. And this sets us on the right trajectory for delivering our 2026 outlook.

With that, I'll turn it back to Emma.

[Emma Walmsley, CEO & Director]

Thanks, Iain. And turning to Slide 28. At GSK, we're guided by our purpose: to unite science, technology and talent to get ahead of disease together. We deliver this purpose considering the environmental, social and governance impacts across everything we do. Running a responsible business is integral to our strategy and future performance. It's how we build trust, deliver health impact at scale and reduce risk.

We prioritize our resources to focus on 6 material areas: the environment, global health and health security; diversity, equity and inclusion; pricing access; product governance; and operating standards. We're focused on maintaining sector leadership in ESG with our #1 ranking in the Dow Jones Sustainability Index and our long-standing leadership in the Access to Medicines Index.

Looking ahead, we're also on track to deliver our ambitious and environmental commitments with targets of net zero on carbon and net positive on nature by 2030.

We're proud of our track record, but there is always more to do. And this quarter, we continued to advance our global health and health security leadership with a commitment to invest £1 billion over 10 years to get ahead of infectious diseases in lower-income countries. As part of this commitment, we also formed a new global health unit under Roger Connor's leadership, which will be measured by its human health impact.

GSK is committed to delivering health impact at scale, reaching more than 2.5 billion people worldwide over the next 10 years.

So in this landmark year, GSK has delivered another quarter of strong performance and momentum, and I am very confident that as a focused global biopharma company, we will deliver our bold ambitions for patients reflected in our commitment to growth and a step change in performance.

With that, operator, can we please move to the Q&A for the team.

[Operator]

[Operator Instructions]. And the first question is coming from the line of Emmanuel Papadakis from Barclays.

[Emmanuel Papadakis, Deutsche Bank]

Was one for Barclays, Deutsche Bank now. On RSV, please. Maybe a question around pricing strategy to the extent you can help us there. We still don't know durability, of course, I'd love to hear your latest perspectives on where you think that's the right presumably, that's an important input in the pricing calculation.

And give us some kind of yardstick between the boundaries of flu and Shingrix, what we should be thinking about and some of the considerations you're thinking of.

[Emma Walmsley, CEO & Director]

Well, thanks, Emmanuel, but it won't surprise you to know that in a commercially competitive environment, we're not going to give very many indications around pricing. I'll let Luke add to this. But we are extremely excited about bringing forward further data on this. And there's just no debate, not in an environment for governments under the inflationary pressures they are with the questions as they are that prevention of disease is always a good investment for health care systems, and we're confident the payback for this, especially across multiple end points, will be a good one.

I don't know if there's anything you want to add on.

[Luke Miels, Chief Commercial Officer]

I would just say you've got the bookends right manual, but we can't give you were about what we sit between those 2 bookends between flu and Shingrix.

[Emmanuel Papadakis, Deutsche Bank]

Sorry, can we just go back to the durability question and also any comments around efficacy how?

[Luke Miels, Chief Commercial Officer]

Well, I think we're going to be looking at the data to assess the the durability, of course, the reason that we, in part, use the ASO was to assess whether that would increase the durability both within a given season to see if the treatment effect is actually preserved during what can sometimes be a long season, which could have really significant implications in terms of the timing of the vaccine as well as the potential for being even super seasonal, and that's why we have the extended study where we're looking at additional vaccinations or annual.

And I think in terms of the effect what we've said and I think is very clear is it's exceptional data. And it's not just exceptional on the primary endpoint, what we said is this is a really exceptional data package, which includes both the effect on the primary endpoint, but as well as a myriad of secondary endpoints, including examining whether the effect was maintained in those over 70 versus those under, which it was, whether the effect was maintained in both the RSV A as well as RSV B, and it was, as well as the effect in patients with comorbidities and even reductions in severe disease.

So overall, a very exceptional data package, and we look forward to being able to present that to the community soon.

[Emma Walmsley, CEO & Director]

Yes. So lots more to come in due course.

[Operator]

Next, we have a question from Laura Sutcliffe from UBS.

[Laura Sutcliffe, UBS]

I've got a question on Shingrix, please. I know you've got a sales goal -- doubling of sales goal through 2026, but do you have any sense of where the peak sales year sits for Shingrix.

[Emma Walmsley, CEO & Director]

Thanks, Laura. Just I'll come to Luke like in terms of overall outlook, but fantastic to see this momentum coming back. Record quarter, will be a record year and a really important move a bit back to this durability question on deseasonalizing, if that's English, Shingrix, which is important as this move to more and more adult vaccination comes in, the opportunity for us and retailers is very interesting in that course is smoothing.

Amazing moves on geo expansion. Luke, do you want to comment further?

[Luke Miels, Chief Commercial Officer]

Sure. I mean I think, Laura, it's a great question. The main swing factor is probably China. You can imagine the U.S. at some point will exhaust the population. Of course, our intent is to do that before any competitor would arrive or largely do it before any competitor that could arise. We're learning a lot from the launches in Europe, and you can see that performance coming through in the results, which are just being reported. We're now launching in emerging markets. We just started in Brazil and a number of other smaller markets. So the speed at which the uptake there will really guide that.

But yes, the main -- because of the conditions on the ground in China right now, that's the main swing factor for us, even though the growth in absolute terms is quite strong.

[Emma Walmsley, CEO & Director]

Thanks, Luke. And again, this is why it's very exciting to see the pipeline building through in our adult vaccination portfolio. Shingrix with lots of great growth prospects ahead and we'll add to that, hopefully, in due course, the launch of RSV, and of course, the Affinivax portfolio later in the decade.

[Operator]

Next, we have a question from Keyur Parekh, Goldman Sachs.

[Keyur Parekh, Goldman Sachs Group]

First of all, thank you very much for all your help and support over your multiple innings in the biopharma industry. I'm sure all of us really appreciated. So good luck in your nonexecutive role, but thank you very much for the multiple years of help.

Kind of a couple of questions, please. One, just a broad one on RSV. I note that Pfizer, at least as per clinical trials, seem to have recently changed kind of the primary and the secondary endpoints on their kind of RSV study. Wondering if kind of you might be able to share your perspectives on what that means and why that might be the case.

Linked with that, kind of a look from a commercial perspective, how should we think about the demand trends kind of when you launch the product? Should we think of this as a Shingrix light kind of launch? Or is this one where you might have to kind of create a market unlike the situation with ZOSTAVAX and Merck. So that's kind of an RSV.

And then separately, as I look at kind of your updated guidance for the full year, at midpoint kind of for the operating profit growth range is essentially in price kind of little to 0 growth in the second half of the year. My question is not whether that's conservative or not, but if you're going to exit the year doing kind of 0% growth in the second half of the year, how should we feel comfortable with double-digit operating profit growth for '23 that you already guided to?

[Emma Walmsley, CEO & Director]

Thanks, Keyur. And obviously come in turn to how then Luke and then Iain, you know we're not about to give you '23 guidance in Q2 of '22. And as is already alluded to, but I'm sure we'll add to that after we've heard a bit more on RSV, this is really a comparator question. We feel very good about the momentum on fundamental demand across the business. We feel very good about the outlooks overall on this 5-year outlook we gave you last year. And we have always said that was not a back-weighted prospect. And we feel just that we've got all the fundamentals moving in the right direction, both on execution on net multiple core assets across the portfolio and on the progress we're making in terms of the launches that are coming through.

So well, let's come to how, frankly, we're very focused on our own results in RSV and then we'll hear from Luke. The only thing I would say is the world has been waiting for 50 years for an RSV vaccine. I think the -- so -- and usually, when you have more than one competitor in a market, that bodes well for the size of the market, too. So we feel extremely excited about our results.

But Hal, don't know if you want to make any of what you would like to say.

[Hal Barron]

Yes. Thank you. Thank you for the kind comments. Keyur, that's very nice. And I just want to say it's been a real honor to work in the field and particularly work as Head of R&D at GSK with the incredibly amazing colleagues that I've gotten to spend in the last 4.5 years transforming the R&D organization and really getting to this incredible place we are at GSK today. So thank you for that.

In terms of the Pfizer change, yes, of course, we saw that. It's a bit unusual, but I'm not going to comment on other company's decisions on clinical trial design and regulatory involvement. I will say that we have exceptional results. This was a very unusual RSV season. And -- but we do have exceptional results. We've seen the treatment effect, as I mentioned, maintained in both RSV A and B. And importantly, and this is, I think, very important, we specifically added the adjuvant because we, in Phase II, observed, and this was somewhat known, but we observed that the elderly T cell response to viruses in general and RSV, in particular, are blunted. And we were able to show that with this modified dose of adjuvant that we can normalize that T cell response. And we did see in the clinical program a treatment effect in the over 70 to be very similar to that under 70%.

So as Emma said, it's always terrific when you have outstanding data. This has been in the makings for 60 years or so, and it's very, very complicated. All of these scientific advances are now set to have a huge impact on the very, very large number of people whose hopefully lives we can save and certainly, hospitalizations we can avoid.

[Emma Walmsley, CEO & Director]

Right? Luke?

[Luke Miels, Chief Commercial Officer]

So I think, Keyur, I mean, it's very interesting. I mean there's been no solution to this problem. So you see high awareness amongst physicians because the numbers are quite striking. 6 million cases in the U.S., about 180,000 hospitalizations and on an average year of 14,000 deaths. So physicians are aware of it in terms of people potentially impacted by it. Not as great awareness, as you'd imagine, because there is no solution, but I would expect that changes quite dramatically.

So I don't think it's like -- I think it's going to be us creating the market. Now the question is, I think there's other variables. Is the cutoff -- I mean, you should assume ACIP recommendation, the question is whether the cutoff is 60 or 65, whether you have individuals say with type 2 and respiratory and CV comorbidities in there.

And then I think the other variable we've got is will there be able to be another company there? We compete against that other company right now in meningitis B, high respect for them, but we get 77% of that market share. So I think we're ready for a dynamic contest. And if there is 2 companies in there, I think the market will expand faster.

[Emma Walmsley, CEO & Director]

Right. Thanks, Luke. Iain, anything else to add on specific question on--

[Iain Mackay, CFO & Executive Director]

I was giving great advice by a colleague at HSBC many years ago to never try to out analyze an analyst, so I'm not even going to try here. I think suffice to say, the momentum we're taking out in the first half, the second half performance is very much influenced by the comps from the third and fourth quarter of last year, where we obviously a pretty strong performance from Shingrix in the third quarter of last year being a key influence on that. But suffice to say, we've got a visibility to revenue performance in the second half of the year that we believe absolutely keeps us consistent with our longer-term, medium-term outlooks of more than 5% and more than 10% adjusted operating profit through to 2026.

So although the second half is absolutely going to be a little bit slower than the first half in terms of growth of top line, we still see attractive growth coming through in the second half with momentum into next year. And when we get to our full year results, we'll be sure to give you a more specific view of what next year looks like, both on top line, adjusted operating profit and adjusted earnings per share.

[Operator]

The next question is coming from Jo Walton from Credit Suisse.

[Jo Walton, Crédit Suisse]

I will respect the 1-question rule, but ask for a clarification. My question is, please, about the General Medicines business. It's about 1/3 of your business at the sales level, and it's expected to decline. I wonder if you could tell us if there's any change in your appetite to potentially slimming that down, whether there is the opportunity to sell some of those assets and redeploy the cash in other areas.

And my clarification, I apologize, it might just have been Credit Suisse telephony, but the line went very crackly when Luke was talking about the Shingrix stocking. So I wonder if you could reiterate how much of the 2Q performance was effectively brought forward from the second half.

[Emma Walmsley, CEO & Director]

Great. Thanks, Jo. And I'll come to Luke to comment on both of your clarification and your question. But just to say big picture, we've actually done an enormous amount of work over the last 5 years, as you know, on the portfolio of GSK in the broadest possible sense, including 2 weeks ago the successful execution of the demerger and then within Gen Med as well. We always keep that as a watching brief.

But I do want to emphasize, I think, actually, last year, we said sort of flat to slight decline on Gen Meds over the 5-year horizon. That is a combination of the growth of some assets in some geographies. And then, of course, as Luke referred to, the digestion of some genericizations of parts of the portfolio. But this is a nicely profitable business. And we've got part of like strategy that are growing extremely well. We will always keep a watching brief on that, but -- and continue look from a capital allocation point of view at an overall level, as Iain reiterates, where we want to do BD and we'll continue to, I think, do more of that with a newly flexible balance sheet. But no major initiatives.

But Luke, do you want to do the clarification and add on Gen Meds.

[Luke Miels, Chief Commercial Officer]

Sure, Jo. I mean, I think just on Gen meds, I mean, we see opportunities to grow in that portfolio. I mean you see a surge in demand from augmented as things normalize. We have done divestments like -- in the past, but I mean if you take out pressure on products like Seretide and -- , this is an outstanding portfolio. And we see opportunities using sort of non-manpower ways to grow growth.

In terms of your question around the inventory, just indulge me a little bit, I'll just expand on the broader answer. I mean I think in half 1, we saw very good demand in the U.S. and Europe. That's usually the comparator, if you look at Q1, Q2 '21, it was very low. So percentage-wise, it was a relatively generous comparator. That will not be the case in the second half of the year.

We've also got the new launches we talked about. Emma made the point earlier around us trying to expand vaccination outside of the flu season, and we're doing that to normalize, but also obviously with one eye on RSV in our portfolio. And then the other Q1 trends were very much the same into Q2 around ACP willingness and pharmacists willing to rank, actually these improved.

So the volume -- the wholesalers in the U.S., I think, a very good forecast is they've got a good sense of demand. But what we saw through Q1 was that it was within range. We talk about a 1.1 as a normal range. It sort of went up to 1.3% in Q1 and then it started to slide back down as we went into Q2. So 1.2, 1.1 billion and sat there for a while. But in the back half of Q2, we started to see it climb. So it softened and then it went from 1.6, 1.8, 1.9. So we finished at 1.9.

So if normal is 1.1, 1.9 seems to be pulled forward on the part of wholesalers and that's certainly the feedback that they're giving us.

[Operator]

Next question is coming from Seamus Fernandez from Guggenheim.

[Seamus Fernandez, Guggenheim Securities]

So we saw a good performance of Cabenuva in the quarter and the overall HIV portfolio. Just hoping to get a little bit more color on the treatment versus prep utilization. And then just conviction that this trend is actually accelerating at this point. It does look like strong results, but just wondering if there was anything in the quarter that we should be aware of from a stocking perspective or a pull forward?

[Emma Walmsley, CEO & Director]

Thanks, Seamus. Well, we have a lot of conviction in this portfolio, but I'll let Deborah...

[Deborah Waterhouse, CEO, ViiV Healthcare]

Great. Thank you. So in terms of the balance between treatment and prep, I mean, as you probably know, the prep market is much smaller than the treatment market. Treatment is currently round about $23 billion, $23.5 billion with $2.5 billion for the prep market. So treatment versus significantly different in size.

The uptake of that Apretude is limited, as we've said it would be all along because we need to go through that process of securing access and also setting up the processes, building the market basically for an injectable in the prep space. But the feedback that we're getting from physicians and particularly patients about the impact that this medicine will have is phenomenally positive. But I think you'll see that translate into significant revenue next year.

In terms of Cabenuva, I mean another strong quarter where we saw sales doubling. We've simplified the process by which physicians can acquire and administer this medicine. And again, all of the ATU work, so the sort of the tracking of the opinion of physicians around Cabenuva that continues to strengthen confidence is high, and we absolutely see ourselves as being on track to deliver between Apretude and Cabenuva, that £2 billion worth of revenue that we talked about in the business investor update last June and reiterated in the investor session that we did in November, which was solely focused on HIV.

So let's just talk a little bit about the growth in the first half of the year. So the first half year is 10% growth. A vast majority of that is driven through volume uptake of our innovation medicines. So we're really seeing strong underlying demand for Dovato, both in the U.S. and in Europe. And again, very strong underlying demand for cabotegravir in the U.S. So that is the vast majority of why we are delivering that 10% growth. There's a little bit of net price mix in there as we move from the older products, which have higher discounts to the new innovation products, which do not through the mandated channels, or to a lesser extent, so this is an incredibly positive story and one that is a story of volume and performance and market share.

[Operator]

The next question is coming from Andrew Baum from Citi.

[Andrew Baum, Citigroup]

A couple of questions, please. First one, to Hal, given it's my last opportunity on the GSK call. You highlighted the CCL17 monoclonal. Do you feel you have a -- dose that is ready to take directly into Phase III? And do you think there's any role for this molecule to addressing the cognitive components of long over just given some of the recent preprints?

And then second, for Deborah, our recent survey highlighted the shortage of nursing staff as a potential cap as the Cabenuva franchises expands, are you seeing this as potentially problematic in terms of administering Cabenuva to a broader patient population?

[Emma Walmsley, CEO & Director]

You just cut out on your question as you were bridging to the long COVID piece. Would you mind just repeating that?

[Andrew Baum, Citigroup]

Sure thing.

[Hal Barron]

Hello? Right. I suggest we go era. Yes. I think what Andrew was asking, if I caught it correctly, was subcu. I think it was well. Okay. All right. subcu for long COVID in CCR 17. Yes, subcu for CCL17 and then long cabin. I think is what I heard. I think a tomato. Anyway. Thank you, Andrew, if you can hear us. So yes, we're very pleased by the CCL17 MAB data in osteoarthritis for a reduction of pain. As you know, that was based on a pretty compelling preclinical hypothesis that CCL17 may be involved in inflammatory pain, maybe neuropathic pain, lots of different preclinical models that have given us some confidence in that. And of course, that was what was, to some extent, behind the interest in anti-GM-CSF because GM CSF is the proteins when you expose a PBMC to GM-CSF, the CCL17 is the most over-expressed protein. Of course, a MAB to CCL17 is going to be a much more effective way of reducing CCL17 level. So we're pleased to see that in the randomized Phase Ib, which is a pretty unusual design.

But we decided given that it's pain and all the challenges with assessing the benefits of a drug on pain that we would do a small but randomized Phase Ib study. Now that data as said was positive. That is going to enable us to initiate a Phase II study. We're certainly not ready to move to Phase III with that. So if there's any confusion, I think you asked, are we ready for Phase III? No, we're going to be needing to do more dose ranging, more durability ranging. So this is an 8-week study, of course, we'll need longer. And maybe potential to see if there's biomarkers and subsets of patients, whether it be OA or other patient populations, patients with refractory pain that might benefit the most from that.

So yes, we're very excited based on the biology and the clinical data, but we'll need Phase II data to optimize the program. In terms of long COVID, at this point, we have not thought about CCL17 as an approach to long COVID, but I think the definition, the epidemiology, the biology behind long COVID is really being challenging to understand and to elucidate the mechanism behind it. But as you point out, it does appear to be inflammatory.

But at this point, we're focusing all our energy on developing CCL17 antibody for pain, given the enormous unmet medical need that exists for patients with pain, particularly those who are needing narcotics and all the obvious problems with the opioid issue.

So we're really excited about the role that could pay in pain. And maybe someday we'll look at it to see if it has rolled outside of pain.

[Emma Walmsley, CEO & Director]

Great. Deborah, are there any quick comments on the nursing staff shortage?

[Deborah Waterhouse, CEO, ViiV Healthcare]

Yes, sure. So we do a huge amount of research like you do, Andrew. Basically, we're building a market and there are a number of things, which in building that market, can act a barrier. So nursing stock is one, people within clinics that can actually manage the reimbursement process would be another. We're supporting clinics to work their way through all of that. So that is about helping with workflows within the physicians' offices themselves, but also we're doing a huge amount of work to expand our alternative sites of care. So actually, physicians are struggling with nursing staff or they've got such a volume of Cabenuva patients now that they don't want to handle it all themselves, they can now move their patients into alternative sites of care. And also, we're doing a lot of work via a study called Glacier and working with the community to move the kind of the injection of Cabenuva and actually Apretude eventually, we hope, into pharmacies. So that kind of starts to unlock that bottleneck.

What I am struck by all the physician visits I do and I was in Los Angeles the other week, spoke to 10 of the biggest prescribers of HIV medicine and prep is just the demand for this product, both Apretude and Cabenuva, they have got people waiting on list to get this medicine. The unlocker is the process within the physician's office and the ability to refer people into alternative sites of care. And eventually, we hope to do the same in pharmacists. So it's incredibly motivating to see the demand for these incredible medicines that will really revolutionize the lives who are living with HIV or who would benefit from PrEP.

[Emma Walmsley, CEO & Director]

That's great. And then the other only thing to add in terms of any expression, we're still set on that. I think Mark switched to because it's down 30%, isn't it, pre-COVID?

[Deborah Waterhouse, CEO, ViiV Healthcare]

Yes, exactly. So when the market is -- continues to come back, then we'll continue to benefit from that.

[Emma Walmsley, CEO & Director]

And then in more out of stage pipeline, but an important one for later in the decade, of course, as well as longer acting, longer acting. We're exploring -- which helps solve some of that challenge.

[Operator]

Next, we have a question from Simon Mather from BNP Paribas Exane.

[Simon Mather, BNP Paribas Exane]

I'm just wondering, could you provide any comments on the ongoing -- litigation and potential liabilities? I mean, just generally your stance on the topic and whether or not you could quantify what portion of liabilities, if any, have been transferred to Helion as part of the spin. So just any information you can give us would be greatly received.

[Emma Walmsley, CEO & Director]

Thanks, Simon. In the spirit of a short answer to the question, I'm afraid I'm not going to comment as we never do on any legal matters like this.

[Iain Mackay, CFO & Executive Director]

The latest is in the earnings release, Simon, and any more detail beyond the earnings release was part of the annual report and accounts published a couple of months ago. So the latest in the earnings release.

[Operator]

Next, we have a question from James Quigley from Morgan Stanley.

[James Quigley, Morgan Stanley]

I've got one on -- clinical one on acilimab. So looking at clinicaltrials.gov, contrast 3 has completed, contrast 2 will finish in October and contrast 1 is expected to finish in September. So should we anticipate that the data will be ready to present at ACR in November?

And then ACR 20 is the primary endpoint, which has sort of seen as a reasonably low bar or more of a sort of regulatory end point. So what would you say is the key endpoints that physicians are looking at? And what would be the bar for success across those end points?

And also in the last call, you mentioned that the Phase II study failed to meet the primary endpoint, which was data remission. So where would you say your physician sentiment knowledge and excitement is around the program in the context of the Phase II data and the upcoming Phase III data.

[Emma Walmsley, CEO & Director]

Great. Thanks. So a variety of subquestions, Hal, around the otilimab program.

[Hal Barron]

Yes. Thanks, James. So the way I would think about the otilimab program is to include in the program the CCL17 because -- so think of them as 2 molecules as part of a hypothesis that may be driving the pain associated with, in the contrast studies, rheumatoid arthritis-induced joint pain. The basis for us moving forward, despite, as you point out, a negative Phase II study was that there was this, as I mentioned earlier, with Andrew's question, a reasonably compelling preclinical models that suggested CCL17 was one of the most important proteins in creating this sort of inflammatory neuropathy, if you will. And we did observe that anti-GM-CSF reduces CL17 but to a small extent, and of course, would be seen with the map.

That then gave us more confidence than one would have had in a negative Phase II study because we did see trends in improvements in symptoms. So the design of the Phase III, as you pointed out, was to have ACR20 as the approvable endpoint. And given some of the safety concerns seen with some of the other rheumatoid arthritis drugs, we think that's a reasonable endpoint. Of course, if the medicine was to be both successful at ACR20 and reduced pain that, that would be a very differentiated molecule, a very high bar. And as I point out, one that we're -- we should be thinking of as being part of the anti-GM-CSF program.

So by the end of the year, I think we'll have a much better sense of how to put both of those molecules into context and to think about how we will advance each.

[Operator]

The next question is coming from Graham Parry from Bank of America Merrill Lynch.

[Graham Parry, Bank of America Merrill Lynch]

So Hal, a question on the RSV vaccine and I guess it's always good to go out on the high and you've mentioned many times now, this is exceptional data. I think you've previously, similar language to describe, potential vaccine efficacy of over 80% on your primary endpoint. So can we interpret the exceptional comments as referring to primary end point or to a more severe disease or secondary endpoint.

And given Pfizer is shifting to a more severe disease endpoint, does that match more closely your definition of the infection. So the 3-symptom definition, your description in clinical trials is perhaps a little -- than that. So will we be able to compare their headline data or their primary efficacy data with yours?

And then secondly, on momelotinib, are you expecting a priority review? And how much physician education do you think would be needed at launch on this given there were 2 failed studies versus ruxolotinib and you're going into the more advanced setting. Or is it just an addressable pool of patients just waiting for therapy here?

[Emma Walmsley, CEO & Director]

Thanks very much. So Hal, if you could do RSV comments momelotinib. And Luke, I'll come to you and see if you have anything to add.

[Hal Barron]

Okay. Thanks, Graham. Lots of really good questions embedded in there. Let me clarify 2 things because they were done very intentionally. It wasn't exceptional. We said outstanding was more than 75%, and I specifically put in the quote exceptional. So they're different.

Now we'll have to see why we use different words. But the exceptional data was referring both to the primary endpoint as well as the key secondaries. And remember, we have an antigen of RCA and we were confident from the Phase II data that the treatment effect would be preserved in both A and B but we do have the Phase III data. Now we do, and it is -- we're very confident that the treatment effect is preserved in both RSV A and RSV B.

The most important component of this is the treatment effect, and as I said, we're not going to give the point estimate, but the data is exceptional.

The other really important point, just to highlight again, is that we believe that the adjuvant that normalizes the T cell response seen in the elderly compared to that, what you've seen in young is really important in terms of engendering a treatment effect in the over 70 where much of the morbidity exists. So that's an incredibly important secondary endpoint program. And as we said, the treatment effect in the under 70 and over 70 is very consistent.

So that's what is the package that's exceptional. We'll be doing additional analyses on duration and durability, et cetera, as well as some other subgroups. But those patients with comorbidities, as was alluded to earlier, benefit.

I'm not going to comment on Pfizer's changing in the primary end point other than to say it's unusual that companies do that at the time of blinding. And we'll have to look at all of the data very carefully, but the over and under 70 and the durable response are the 2 key attributes that one are going to need to compare that probably won't be something you can do from a press release, but we're -- you should be seeing the data from our program within the next 2 or 3 months. So we're confident a great discussion on to.

In terms of momelotinib, we don't really comment on regulatory interactions at this point. We're very confident in the data, the unmet need and the robust nature of the findings. Luke, I don't know if you want to add anything.

[Luke Miels, Chief Commercial Officer]

Yes. I mean I think, Graham, I mean the deal was constructed on an assumption that we would have that second line block and so you should assume that at this point. I think at the recent conference where the Phase III data was presented. I think people were raving about it. I was very positive. So we remain very excited about the potential, and we've also just filed in the U.S., as you know, and then we'll file second half of this year in Europe.

[Operator]

The next question is coming from James Gordon from JPMorgan.

[James Gordon, JPMorgan Chase & Co.]

One on HIV. So I think you had said before that Cabenuva plus Apretude could be more than £2 billion peak. But based on this initial ramp, could maybe Cabenuva be a £2 billion-plus product by itself, even ahead of -- coming along? Or do we need to be a little bit cautious that maybe there's some low-hanging fruits and warehouse patients and things then slow?

And also Apretude next year, could Cabenuva be a good guide to what the ramp might look like for this product next year? Smaller market but lots of wait-listed patients? Or do we need to be a lot more cautious in terms of taking a few years for the market to really build?

And if I could also just squeeze in a clarification. So Blenrep, we heard that gamma secretase combo and a wider dose interval, there are 2 different ways you could do with the ocular tox and both look promising. So have you now decided to go down just one of the routes? Or are you going to do both? When do you start more trials? And when could the sales start accelerating as a result?

[Emma Walmsley, CEO & Director]

All right. Well, now since we need to rebaptize questions as clarifications, I'm just going to ask my team to be as brief as possible. Deborah first and then how we can get to as many clarifications left as possible.

[Deborah Waterhouse, CEO, ViiV Healthcare]

Thanks, James. So Cabenuva, we're still sticking with the EUR 2 billion in 2026. The competitive landscape, you know there's a little bit of uncertainty in there at the moment. So how that unfolds could make a difference. But for us, fundamentally, the £2 billion is -- in 2026, there no change there.

Apretude, similar journey to Cabenuva. So next year, you will see a ramp-up, which is going to be quite significant on the basis that we'll have solved all of the process and access issues in 2022.

[Emma Walmsley, CEO & Director]

I mean the only I'd add to that as well is that we are very excited about the emerging early-stage pipeline of how are longer acting/longer-acting is going to be growing through the end of the decade. So I don't see that as a full stop. Hal, anything to add on GSA?

[Hal Barron]

Yes. Just really clearly, your point is excellent. The GSI combination is -- clear synergy, and it is completely independent from the opportunity to improve the benefit risk profile from a Q4, 6- or even 8-week regimen. So yes, the answer is both of those will be advanced forward as we move to earlier lines.

We also, of course, have 2 other levers that is the holding for grade 2 ocular tox as well as the synergy we're observing with pomalidomide, another standard-of-care agent . So all of those will enable us to have a much more robust profile to enter into earlier lines.

I think you said what's the data coming out. We're going to DREAMM 3 soon and DREAMM 7. Both of those are in earlier lines third line and second line, respectively, and compare their arm with PFS as primary endpoints. So we're going to be able to see how potentially effective these agents are compared to Velcade and other standard of care agents like DARZALEX as well as in third line. So very excited about the molecule.

[Operator]

Next, we have a question from Simon Baker from Redburn.

[Simon Baker, Redburn]

A big picture question on R&D for you, Hal. You talked about cultural changes that you've implemented during your time. I wonder if you could discuss what the most important cultural changes have been in the R&D organization. And on the basis that the job is never truly finished, what are the key items remaining in Tony's inbox when he takes over?

[Emma Walmsley, CEO & Director]

Well, I'll let Tony speak for his priorities. He's literally starting next week, and you're all going to have a great chance to meet him in the coming months and certainly we'll be presenting next quarter. But Hal, I don't know if there's anything briefly that you want to say in terms of the biggest dynamics within the culture change you've been driving. And as Hal concluded, there is always more to do, and we remain very focused on that.

[Hal Barron]

Yes. As I said in the beginning, the cultural change is incredibly important and one that actually will probably take longer than even revitalizing the portfolio. So I think that there's a lot more work to do. The things I'm most proud about the culture is we really did try to drive a culture where there was limited if no fear of failing, taking smart risks is the way we call it, which is sort of knowing that in this business, it's very risky, 90% of drugs that enter the clinic will fail. And if one is to trying to evolve a we'll never have innovation. So we think on a long way there.

The second thing, and I won't go to the rest was that we really tried to be very obsessive with something called single accountable decision-making models where we identify individuals who are accountable for decisions and not relying on consensus, which I think can kill innovation.

So I'm trying to be very brief, but I think we've made a lot of progress on the cultural change, but certainly much more to come.

[Emma Walmsley, CEO & Director]

So we're running a bit lumber. I'm going to take 2 more questions. That culture question, we could take up a whole hours of presentations and I do not want to take away from the enormous impact on momentum that's already been driven there.

[Operator]

The next question is coming from Peter Welford from Jefferies.

[Peter Welford, Jefferies]

Just really one thing to Luke, just on Shingrix. If we go back to what we've seen with the doses, thanks for detail there, but I wonder if you can just talk a little bit about who it is you're seeing now actually doing the administration. I think we talked about shift previously from retailers more into the doctors. Has that shift moved back again? And are you still detailing actively to the doctors, I guess, utilizing, I think you said the Trelegy sales force. And can you talk a little bit about how you're seeing that dynamic potentially evolving now in the second half of the year, I guess, as COVID truly unwind with the vaccine?

[Luke Miels, Chief Commercial Officer]

Sure, Peter. So it's stabilized 55 retail 45 nonretail. About 60% of the nonretail is doctors who, as I mentioned earlier, the trend rate for their willingness to recommend and strongly recommend continue to build. Having Trelegy, and actually, we've expanded this to other teams globally. So we have Shingrix in the P2 slot across a whole number of teams, including Nucala teams globally, and it's working very well.

[Operator]

And final question is coming from [indiscernible] Barclays.

[Unidentified Analyst]

Clarification is exceptional better than outstanding. And then question just on the guidance, the decision to maintain the year-over-year growth rate for specialty given that the HIV guidance was nudged up a little bit. Is there a deterioration in any other elements of the business there? Or just perhaps a broader era of conservatism. And then also just what drove the slight moderation in influenza guidance for the year? Was that share or anticipated market sizing?

[Emma Walmsley, CEO & Director]

Right. Iain, perhaps you can comment on guidance and then we'll come to Hal for the specificity and distinctions in his vocabulary, and then I'll close up.

[Iain Mackay, CFO & Executive Director]

Yes. No, it's a very good question. It's basically on proportionality. So the comments that Deborah made earlier around the performance of HIV or material and HIV context when you put in the context of the Specialty Medicines portfolio overall, it's not sufficiently material to kind of lift up the guidance for Specialty Medicines overall. So there's not -- it's not as if that's offsetting something else within Specialty. It's just in terms of proportionality. It's not -- it doesn't move the needle for specialty overall.

[Emma Walmsley, CEO & Director]

Hal?

[Hal Barron]

Well, let me just say as my last comments on my last call, that it's a real honor to say that the question as to whether outstanding or exceptional is how you would define the Phase III results for one of the most important trials done in the last 60 years for RSV. It's incredibly inspiring and you can decide when you see the data.

[Emma Walmsley, CEO & Director]

Perfect. Right. Well, thank you, everybody. We are delivering, and I'm absolutely delighted that we've been able to upgrade our guidance this year and demonstrate pipeline progress included with our concluding comment as well as tremendous commercial momentum. We have delivered a successful separation and the biggest change for GSK in 2 decades and creates the capacity to continue to invest in future innovation and growth.

I do want to conclude with my own very sincere thank you to Hal for the enormous impact he's had on the momentum of GSK. We're really looking forward to his congratulations to being a member of the Science Committee and the Non-Exec Director of the Board. I know he'll continue to contribute wonderfully. And I know how much Tony is looking forward to spending time with you all in the coming weeks and months, and we look forward to seeing in the days ahead. Thank you very much. See you soon.