Coronavirus Update

GlaxoSmithKline Plc - 1st Quarter Results

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GlaxoSmithKline Plc 

Q1 Results

Financial and product highlights


Reported Group sales £9.1 billion +19% AER, +19% CER (Proforma +10% CER*).  Pharmaceuticals £4.4 billion +6% AER, +6% CER; Vaccines £1.8 billion +19% AER, +19% CER; Consumer Healthcare £2.9 billion +44% AER, +46% CER (Proforma +11% CER*)


Sales growth reflects strong underlying performance and additional impact from increased demand including stock building for many products


Total Respiratory sales £871 million +38% AER, +38% CER.  Trelegy sales £193 million +>100% AER, +>100% CER.  Nucala sales £210 million +38% AER, +38% CER


Total HIV sales £1.2 billion, +8% AER, +8% CER.  Two-drug regimen sales £186 million


Shingrix sales £647 million +81% AER, +79% CER


Total Group operating margin 22.2%.  Adjusted Group operating margin 29.4%, reflecting strong operating leverage (Pharmaceuticals 26.9%; Vaccines 47.5%; Consumer Healthcare 26.8%)


Total EPS 31.5p +87% AER, +89% CER reflecting good operating performance and an increase in the value of shares in Hindustan Unilever relating to the disposal of Horlicks in India


Adjusted EPS 37.7p +25% AER; +26% CER reflecting operating performance and lower tax rate resulting from a non-recurring revaluation of deferred tax assets


Q1 net cash flow from operations £965 million.  Free cash flow £531 million


19p dividend declared for the quarter




Based on current assessment of COVID-19, guidance for 2020 Adjusted EPS maintained; to be updated if needed as more information becomes available


Pipeline highlights


Zejula submission accepted by FDA and EMA in first-line maintenance treatment for women with ovarian cancer


Belantamab mafodotin granted FDA priority review for patients with relapsed or refractory multiple myeloma based on data from the pivotal DREAMM-2 study.  PDUFA date set for August 2020


Cabenuva , first long-acting regimen for HIV, approved in Canada.  Expect submission of reply to FDA Complete Response Letter mid-year


Fostemsavir submitted for approval to EMA for the treatment of HIV in adults


Multiple collaborations underway to develop adjuvanted vaccines for use against COVID-19, including with Sanofi


Agreement with Vir Biotechnology to research and develop solutions for coronaviruses, including using their monoclonal antibody platform technology

Q1 2020 results





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Emma Walmsley, Chief Executive Officer, GSK said:

"Responding to the COVID-19 pandemic is at the heart of our purpose as a company and GSK's portfolio is both highly relevant and needed.  We have mobilised efforts across the company and I want to thank all the GSK teams for their outstanding work to make sure our vital medicines, vaccines and everyday health products continue to be available to the people who need them.  We have also taken action to deploy our science and technologies.  Our primary aim is to develop multiple adjuvanted COVID-19 vaccines, and we are working with companies and institutions across the world to do so.


"Our business performed strongly in the quarter with growth in sales and earnings reflecting good underlying performance and increased demand, including stock-building, for many of our products.  Looking ahead, we clearly face a period of considerable uncertainty, but we remain confident in the resilience and sustainability of GSK's business and our ability to deliver on our long-term priorities of Innovation, Performance and Trust."


GSK's response to COVID-19


GSK's businesses and portfolio are highly relevant to helping tackle the COVID-19 virus and we have mobilised across the company to respond to the pandemic, focusing on our people, business continuity and providing solutions to support the global response.

We are working hard to make sure our employees stay protected and supported, investing in high frequency employee engagement, as well as providing technology, resources and adjusted policies to support our people.

Our business is performing well and has demonstrated resilience in the face of significant demands.  We have implemented business continuity plans across all our essential operations.  The liquidity position of GSK remains strong and we have sufficient cash for our current operational needs and access to significant additional undrawn committed sources of finance if required.  In our supply chains, we are closely monitoring all parts of our manufacturing network and have been able to respond quickly to fluctuations in demand.  Within clinical trials we have implemented proactive measures to protect study participants, staff at clinical trial sites and our employees, while ensuring that regulatory compliance and the scientific integrity of our studies are maintained.

As we have seen elsewhere, recruitment for clinical trials has slowed due to disruption from the pandemic and diversion of resources to other clinical priorities.  We are continuing to support enrolment of new patients into ongoing clinical studies, provided that investigators are confident they will be able to conduct the protocol required.  Where necessary and based on our own assessments, we have proactively paused recruitment.  We have a number of products undergoing regulatory review and, at this time, we do not anticipate any significant delays to regulatory approvals due to the pandemic.

However, this is clearly a very dynamic and uncertain situation and the ultimate severity, duration and impact of the pandemic remain unknown at this point.  Despite the measures the company has taken, there are significant risks to business performance for the remainder of the year, and particularly over the next few months.  These could include disruption to manufacturing activities and the supply chain including third parties, further restrictions in our ability to conduct clinical trials, limits on patients' and customers' ability to access certain elective or discretionary treatments, most notably vaccines such as Shingrix, while government containment measures are in place, and the impact of other government actions and restrictions in response to the pandemic.  We continue to monitor these risks closely.

We are determined to support the global response to the pandemic by offering solutions, using our science, technology, portfolio and resources.  Our primary aim is to develop multiple adjuvanted COVID-19 vaccines, using our innovative adjuvant technology, and we are collaborating with seven companies and institutions across the world, including in North America and China.  The use of an adjuvant can be of particular importance in a pandemic situation since it may reduce the amount of vaccine protein required per dose, allowing more vaccine doses to be produced and therefore contributing to the protection of more people, sooner.

Alongside vaccines, we are also exploring therapeutic options.  Earlier this month, we entered into a collaboration with Vir Biotechnology to identify and accelerate new anti-viral antibodies that could be used as therapeutic or preventative options for COVID-19 or future coronavirus outbreaks. Additionally, we are screening GSK marketed and pipeline assets for potential anti-viral activity or potential use in prevention or treatment of symptoms related to COVID-19.

Beyond vaccines and medicines, we are also making other contributions using our capabilities and expertise, for example to support national testing centres.  In addition, we are supporting global and local community funds, including the UN/WHO COVID-19 Solidarity Response Fund, to support distribution of essential supplies and PPE to health workers.