Good morning, everybody, and welcome to session two of the second day of the Bank of America Global Healthcare Conference today. It's my pleasure to be able to introduce our first European company of the morning, which is GSK. And from GSK, we've got Emma Walmsley, CEO. We also have the new CFO, Julie Brown, sitting in the front here, and Nick from IR as well. So perhaps Emma, to welcome. It's a pleasure to have you here as always at an annual event. Perhaps it'd be worthwhile just a couple of opening remarks from you, just thoughts on where GSK is at the moment and where you're executing against your plan.
Yeah, well, first of all, thank you very much, everybody, for joining us this morning. Great to see you. I would say the headline is, we're feeling good. We are delivering on all of the commitments that we've laid out in the transformation journey for GSK. Most foundationally, a step change in operating performance kicked off following on from the successful separation of Haleon. That step change started with a very strong year in 2022 and a very strong first half of 2023, driven by our innovation and the shift in our portfolio to innovative vaccines and specialty care.
I think, in the first half of the year, we were heading towards GBP 5 billion of sales from products that were launched just from 2017, and that, you know, GBP 1 billion more than it was, last year. And, you know, really pleased with the progress. Always more work to do, but on the pipeline and the support and the ambitions, for the growth ahead. So absolutely delighted to be launching the world's first, approved vaccine for, RSV. Hopefully, in, coming weeks, we will be getting to the, approval of momelotinib, in myelofibrosis. We have lots of other, areas of data around some of our core assets that we continue to build with, you know, indication, expansion, and, new data.
So new data on Nucala, data on Shingrix in China with 100% efficacy, ongoing new news emerging for Jemperli too. So really pleased to Q2 to be giving, you know, to be delivering to have been delivering double-digit growth and an upgraded outlook. But most importantly, 'cause I try not to be short-term focused, you know, just feeling strong, not only about the outlook for 2023, but the prospects for the strong and competitive outlook we're given through to 2026, which is a big step change for us. And, you know, maybe most importantly, and I'm sure you will come to that, our prospects through the end of the decade and real ability to digest the patent profile that we have.
Actually, just on the guide, so you've got a 2021-2026 guidance at the moment. We're sort of in the middle point of that. So when's an appropriate time to update? Obviously, Arexvy is now launched, and that's a big part of that, and we'll come on to that 'cause it's looking like there's a lot of prescriptions going out at the moment. But when's the right time to think about addressing the guide and thinking about the guide towards the end of the decade? What bits do you need to have clarity on to be able to think about doing that?
Well, first of all, the guidance we give is on an annual basis, and we've given guidance for the five-year outlook. As a reminder, it's a floor guidance, so it says more than five and more than 10, and then we update. I am delighted to have Julie in the room with us, watching carefully what I say. And so we will update you in February on an annual basis. You know, and we're still incredibly pleased with the momentum. You know, the first year of that, last year, we're halfway through the second year of five years, and, you know, we feel really good about our prospects there. So we'll update you annually on what we're looking at.
You know, the outlook and the ambition for 2031, which we laid out in June 2021, I would say our confidence just gets stronger and stronger. And again, that was a floor outlook, from a sales point of view, of doing more than GBP 33. Obviously, the building blocks, 'cause that's what happens in our industry, you have some things that go much better than you expect and other things that you know, don't work out. That's normal, but net, we're in a stronger position now than we were in 2021. We're giving several updates through this year. Tend to do it by therapy area. We have another one coming up on HIV.
And I think as Julie laid out in the roadmap at Q2, in our Q4 results, we'll kind of make sure that we bring visibility to those building blocks, you know, through a variety of meetings through this year and, you know, keep you informed of how we're doing against what we said we'd be doSing in June 2021.
I think, let's go to one of the bright spots, so Arexvy.
There are many bright spots.
This, this is definitely the one in focus at the moment. I think that, so obviously good data launch. The initial prescription data looks extremely strong. If we sort of track it against Shingrix, it looks like it's doing significantly better in the first few weeks than even Shingrix. So, but obviously, it's a different dynamic. It's a more seasonal vaccine, et cetera.
Mm-hmm.
So perhaps just help us through your kind of initial thoughts on that, those initial few weeks and, I guess, the sustainability of the sort of strength of launch that you're seeing.
Well, first of all, we think this is a very important launch for patients and for GSK. It is early days, and I wouldn't be drawing those kinds of comparisons, but we feel very positive about it. Most of all, because we have great efficacy and we think a differentiated profile. We have our adjuvant in the asset, and we are bringing an enterprise approach to the launch. This is a market that will be driven mainly by the retail market for all sorts of reasons. That's in the interest of retailers and payers, and everything that the world has learned in terms of adult vaccination over the last few years.
There is no question that our 94% efficacy among those with comorbidities resonates well with healthcare professionals simply because those are the ones that represent, you know, over 90% of the burden in hospitals. So that matters. We have a label with co-admin. We believe because RSV is a reasonably stable virus, that there is value in being a, you know, longer duration protection vaccine, and that second season data will come through. But, you know, we've always said that this is a... you should not expect the overall ramp that you would have with Shingrix for several reasons, but not least, you know, we're not alone in this market, and the awareness of RSV versus shingles from a consumer point of view is a bit lower.
But we're really pleased with the start, and we'll look forward to updating you with more visibility at the next course of results and beyond that. I mean, this is a long run. Remember, this is an asset we think is GBP 3 billion of sales over time, and it's one of the important additional building blocks, demonstrating our leadership in vaccines technology and the real opportunities of profitable growth through adult vaccination, which, you know, we see both in... At a time when the external environment, you know, regulatory environment is what it is for our industry. There are very few places where it's better to be than in adult vaccination, simply because preventing disease is just better for payers, government budgets, burdened healthcare systems, and most of all, patients.
You know, the U.S. spends $9 billion a year on vax, treating people with vaccine-preventable diseases. And you're just seeing these trends, positive trends in terms of governments looking at the opportunity and-
Mm-hmm.
the prevention agenda. If you think about it, it's where science is moving on, you know, in most of our sectors. So lots of opportunities for RSV-
Mm-hmm.
and the building blocks beyond that in
Mm-hmm.
mRNA and pneumococcal.
So in terms of the ACIP recommendation for Arexvy, I think the original plan was to go for a full, broad recommendation, and it has a shared clinical decision-making recommendation. That doesn't seem to be holding it back at the moment. So, is this because what we're seeing is there's a very clearly defined at-risk patient population, as you're highlighting, the comorbid population, where you've got that very strong data. And so is this, there's an initial pool of adults that are obviously gonna be highly motivated, or their clinicians are gonna be highly motivated to get them onto the vaccine, and then does it get a bit harder after that? And do you have any sort of sense of how big that pool is?
Undoubtedly, you know, the people who put themselves at the front of the queue are there with motivation, so there will definitely be those. We always see that in vaccines. You can. It's a consumer market, and you can sub-segment it.
Mm-hmm.
So the kind of super enthusiasts, the, "I will when I remembers," the, you know, "If I get prodded and advised," you know, right the way through to those that, you know, foundationally don't believe and fundamentally object. So, you know, of course, that's true. All of that said, there are 77 million Americans who for whom this could be a relevant vaccine. Of course, we'd rather have had been in a position where, you know, it was recommended for everybody up front, but healthcare professionals include pharmacists. So in a world where most of the market will be in retail, and, you know, seriously intelligent people who are data-led, you can argue that, you know, when you're double-clicking on the details of the data, that's not unhelpful on a relative basis for us.
Yeah.
So, but, there's no question it's, you know, it would be preferable to have a broader recommendation, and we think over time we'll get there. You know, we've got more data coming through. Whether it's the 50, 59 cohort, we will hope to get seasons in the label next year. As I said, we still think there's opportunities in the multi-season space here, and, you know, we have ongoing clinical programs on this as well. So, you know, let's keep an eye on that. And by the way, everybody will always focus on the U.S. market, rightly, because it's the biggest.
But just from our experience in other, you know, adult vaccination big assets, it's really important not to lose sight of the opportunity for both launches and growth ex-U.S.
Mm-hmm.
You know, I think that's one of the differences. You alluded to Shingrix earlier. That's one of the differences with Shingrix, where not least 'cause we readied ourself from a supply point of view, we'll see earlier international launches as well.
Yep. Actually, I was going to ask that about manufacturing. So a question I'm getting a lot at the moment, just given the, you know, this trajectory on the initial prescriptions is, is there any manufacturing restraint here? I know in the past you talked about being able to meet demand and the Shingrix capacity being helpful for—
Yeah.
Arexvy as well, but just perhaps an update on that, just given, you know, perhaps a faster launch than most people were expecting. Has that taken GSK by surprise, and are we, are we still okay on manufacturing supply?
No, we've been reasonably consistent, I think, Graham, on our views on the ambition for this. It won't be as fast as Shingrix. It's going to be very big. It will have a, you know, different profile, both in geographic spread, and growth rates, and we will make sure we do not have any supply problems. Because it's also-
Yeah
... a competitive situation, so, I am not... Other things I worry about, but it's not that.
Yeah. And then just in terms of contracting with pharmacy chains.
Yeah.
Obviously, you're in a, technically in a battle with Pfizer there, but actually, is this just everybody's taking both because it's just a big open market at the moment?
Yeah
... there's no sort of individual contracting or anything like that going on?
Well, of course, we have contracts with our pharmacy chains, but, you know, I don't think we should overdo that, that fact. I like competition. Competition is good for the... You know, the big question is: How big can this market be, and at what pace? And having serious quality invested competitors is better for the size of the market, it's definitely better for patients, it's better if you have a better profile, and, you know, it's not unhelpful internally.
Mm-hmm. And then just in terms of the revaccination rate, you touched on it before. You said you hope to get two-season on the label. So do we have to wait now for two-season data to come through, or three-season data it would be, to come through next year, and then if we see a benefit of a revaccination after two years, is that that you then file, and what's the timeframe for getting that on the label then? Can you do that in time for that season?
Well, I think, you know, we will probably look to file two-season data, which you've seen this year, so we get that in the label for next year. That would be the plan.
Okay. And then any-
Obviously, then we have-
Yeah
... data coming later.
And then any thoughts on longer-term competitive dynamics? So, Nate talked about this as a GBP 3 billion opportunity, and you've got you and Pfizer there, but Moderna's got a, an mRNA vaccine. Sanofi is now actually going into phase II-B with a, a triple, RSV, HMPV, PIV.
What?
It looks like it's sort of all, the competitive dynamic might be-
Yeah
... might be picking up. So to what extent is there a first-mover advantage from just being the first established product, you think?
Well, I think it's, as it ever was in this sector, there's first in class and best in class, and you try and be both. I mean, you know, the key for us is continuing to do our work on the clinical program. And by being first, you're always going to be a bit further ahead on the multi-season question, which, you know, is one of the areas of differentiation.
Yeah.
Of course, that also impacts the cohorts, and the geographic launches will impact the cohorts.
Mm-hmm.
If you've been vaccinated this year, you won't be worrying about it when someone else launches next year, so you know.
Yeah. Okay. Any others on Arexvy in the room before I move on to Shingrix? Okay, so, let's, let's talk about Shingrix. So Shingrix, obviously at the other end of the curve, is much more fully penetrated now, and it stalled a bit in Q2. Perhaps you can just talk through the dynamics of what was happening there in the U.S. I think it was down 10%, year-on-year, so you sort of hit full penetration with some accounts. But, what's the outlook for Shingrix, in the, in the sort of broader market? Do you think you can still continue to grow this in the U.S.?
Well, first of all, I'm just gonna correct one point there, which is Shingrix is fully penetrated. We are penetrated, I think, just over 30% now in the U.S., and I know Luke still expects over time to get to 60%. And then, of course, you get a 4 million new cohort of over 50s, no one in the room included, but coming through in the U.S. alone. And you know, we're less than 3% penetrated, ex-U.S. and Germany, I think. So we're a long way from this vaccine having reached everyone who could benefit from it. When you simply think that, you know, one of the three of us can suffer from shingles, and it's horrible, and this has phenomenal efficacy over a sustained period.
I mean, I think we're at least 10 years, and we're gonna get a readout on 12 coming through. We just had data come through in China of 100% efficacy, which is not unhelpful in a market that's got 100 million over 50 s, who, you know, we think are relevant for the private market. Obviously, you know, people can get overexcited about the demographics of China, but that, that's a market that's not far off being the size of the U.S. market. So I just- I think we need to be careful about the assertion of fully penetrated. Now, that said, it gets a hell of a lot harder, back to your earlier comments on the sort of cohorts of the super enthusiast boluses versus-
Mm-hmm.
It gets harder, and it gets a bit more expensive, to penetrate in the U.S. Actually, our TRXs in the U.S., I think, were +8% last quarter, regardless of where the reporting was. But there is no question that that growth will even, you know, eventually peak. Just to remind you, at a total level, you know, Shingrix had another record quarter, and we expect this to be another record year, and we expect it to be an asset that will be at least GBP 4 billion, you know, 90%, I think, of the growth last quarter was ex-U.S., but there is still room, as I said, for penetration. It will just be a slightly, differently shaped curve.
You know, we're really thoughtful about other ways that we can expand and fuel the growth, which I can get to if you want to. But, you know, room for more, for sure. But the really important thing is, you know, vaccines, this even when it does reach a peak, and we have room to go at a total level for that, for sure, that doesn't then fall off a cliff. We believe this is an asset that will be a multi-billion asset through the end of the decade. And the key point is, what's coming next in our profitable vaccines cohort? And that's when you add RSV, you add an mRNA, and these are all multi-billion opportunities, you know, which we still have to have further data readouts, but you add mRNA.
We add pneumococcal, which was the great, which will be more towards the end of the decade, but a massive market, and that's where we think-
Mm.
in pneumococcal, where we think we have a truly differentiated asset. But, you know, that's a bit further out. So, I couldn't be more excited about our prospects and our portfolio, our technology differentiation, and the return on all of that that's gonna come in our adult vaccination portfolio. Which is exactly why, strategically, we wanted to shift more here, 'cause it's good for everyone, and it's real deep know-how for GSK, more here and in certain, you know, TAs in specialty medicines as well, 'cause it's a very profitable business as well as a sustainable one.
Yeah. So that point about the ex-U.S. and China being as big as the U.S., I think if you look at-
Not quite, but yeah.
Yeah, or potentially, if you hypothetically, rather.
Yeah.
.So if you, if you look at the opportunity there and sort of your confidence in penetrating, I think if you look at consensus numbers at the moment, I think consensus has U.S. peaking in 2026, when you start to see a slower slowdown because you're more fully penetrated at that point. And it doesn't have the rest of all catching up and driving growth beyond that point. So do you think there's an opportunity here to actually keep growing Shingrix beyond 2026, through ex-U.S. markets? Or is this more about stabilizing it or sort of, seeing it just decline at a slower rate as U.S. slows down and the rest of the world continues to grow?
Well, I'm not gonna sort of do an annual marker of the forecast. I suppose the key point that I'm saying is it will remain a multi-billion asset. We have plenty of room for growth, ex-U.S. U.S. isn't done.
Yeah.
At an overall level, it is, you know, it will continue to contribute meaningfully to our overall, you know...
Mm-hmm
... P&L and profitable delivery.
And ex-U.S., a lot of the growth has been Germany, where you've obviously.
Has been, yeah.
... had a great performance there. So what are the next markets that we should be thinking about that are coming on stream? Because presumably, each time you get a new market on, that gives a spurt of growth with the vaccine.
Yeah. Well, I think, you know, there's more room in Europe, more broadly. There is... And, you know, it's interesting as we start to explore. I don't remember if I told you about it, when I was visiting with Italy quite recently, you know, a quarter, maybe even a third of their business is actually with oncology patients, because you're talking about vulnerable patients, which is where you come to look at the possibilities of boosters and these kinds of questions as well, because you just won't know what the immunocompromised to be being hit. So that, that's just an interesting space to go. But, so more in Europe, Japan, we've just had an expansion of access to the over eighteens in Japan, and obviously, you know, a large and aging population. China, I've talked about.
Then what's also interesting is we're launching in countries like Brazil. I mean, huge vaccine-friendly populations. And, you know, there's further geographic expansion, but this, this notion of being able to continue to drive Shingrix with cohort expansion, the fact that we have all the co-admin data that we do, 'cause we-- you know, one of the big pushes we've done successfully with Shingrix is to de-seasonalize. I know that's not English, but basically not only do it in the fall, when you're competing for arm space, and retailers love that. We're looking, you know, at what data could come through, especially for that cohort of immunocompromised for a booster. Remember, we're starting vaccinating people at 50. They're gonna live a long time, so we want to make sure we have that opportunity.
There is some very interesting data which we're exploring further on the impact... you know, it's, but there's a few sources now, the impact that Shingrix vaccination can have, you know, as far as dementia is concerned as well, which is obviously a massive agenda.
Yeah.
This is a safe and proven vaccine, so we need to see where that could take us.
Got it. I'm going to stick with vaccines. I've seen the questions on Shingrix in the room before I move to just flu. So obviously, flu's volumes are down this year-
Yeah
... and seems to be a total market effect. Just perhaps talk through the dynamic there. Is this just, you know, sort of a post-pandemic vaccine fatigue issue, or, you know, do we think volumes will start to go back up again, or is this a flat market from here or a declining market from here?
Well, for our particular flu asset, you know, this is definitely gonna be an asset that's in decline, and we're very relaxed about that. You know, it's not a future-facing technology. It's not a profitable business for us. We forecast a decline in it. We will manage that intelligently. There is stuff going on in the broader market, but that's not really the point here. We don't consider ourselves to be a competitor in flu, in a sort of-
Yeah
... meaningful way. What we're really excited about, and we really are very excited about, is the possibility to build a business in flu through an mRNA platform. And this is where, you know, this is one of the disease areas where efficacy currently stands at 50%, if you're lucky. The technology of mRNA is the best thing that's adapted to these kinds of antigenic drifts every year because of the window that's shorter to adapt them. We've been working hard on a platform with CureVac. Obviously, we weren't first out, and we won't be first out with flu, probably, but that's fine. The question is, can we get to a differentiated asset, either in flu or potentially in a flu COVID combo? So that's-
Yeah.
the way we see that. And so, we think the possibilities in the flu market are very meaningful, and this is where that technology is best placed to compete.
Good, good. I want to move to HIV.
Hooray!
So, I guess perhaps just talk through the dynamics of the proportion of the business now that's in sort of your more novel presentations, whether it's long-acting or even two-drug, and then perhaps talk about just the longer-term franchise protection strategy in terms of bringing through new long-acting agents as you go through lots of exclusivities on the daily orals.
Yeah. So, I mean, the first thing to say is there will be a very useful, I think, update on these questions on the profile of the business and what's coming on 28th, 28th of September from Deborah and Kim, so the CEO of [ViiV] business and the head of R&D. And obviously, you're touching on a question, maybe the question that people want to understand, for GSK. And our goal is to continue to pioneer and lead in innovation in HIV, as we have done consistently with dolutegravir and INSTIs and two-drug regimens, and very importantly, with long-acting. The bet that we are taking, and so far we are proven again to be correct on in terms of momentum, is that the market will shift to more long-acting.
We have a very material head start here, but everybody who is competing in HIV believes that long-acting is the solution, both in, or at least is where they are putting all of the R&D money, let's say, put it like that. You know, there will still be a market for daily pills, but we think long-acting will be a third of our business. And our momentum here is very good. You know, we updated our outlook on HIV, we're feeling very strong about the performance there. We think a third of the business will be in long-acting by 2026. We think that will go up pretty meaningfully by the end of 2027, so it's not like something happens in 2026 when it peaks. We think there's a lot of runway for it to grow further.
And then, really importantly, we have three distinct target medicine profiles to go into longer long-acting, at least three months in both treatment and prevention, and also eventually bring the world's first self-admin to this as well. And this is really meeting the demands from patient expectations and, you know, Deborah and Kim will update on the visibility of those programs and the roadmap for when you'll see what on that in a couple of weeks. But the other aspect that, of course, is the sort of other side of the coin here is to give. I think there's some misunderstandings exactly what the shape of the glide path is around the patents, and so we'll bring a bit more visibility and specificity around that for people, both in terms of geography and different protections.
So.
Okay, yep. I was going to ask on that. So on dolutegravir, I think the compound is to expire April 2028 in the U.S., and then 2029 in Europe. But it looks like you've settled with at least on Juluca and Dovato, with some generics. You've also got some combination patents that are now Orange Book-listed as well. So what's the level of confidence of being able to protect at least that segment of the dolutegravir market sort of to 2030, which gives you a little bit more of a window to get the ultra-long-acting through?
Yeah. Well, you've sort of outlined it really. You know, we've been able to settle on the [ANDAs] to date. That doesn't mean we won't have more coming through, but there is an upside here. Even without it, we feel confident, but it's an additional benefit that can come through. So.
And I think in the past, you said about 30% of the market could go to injectable long-acting. That actually seems quite low. Is that just based on current market conditions, and could that go higher once you actually have the full target profile products coming through?
Yeah, I mean, I think, and again, these are questions to ask the team in detail, but and I know, the other main HIV player has a more optimistic view than that. And, you know, we're ahead. So, it's always difficult when you are talking about a paradigm-shifting behavior to predict where the world will be in seven years' time. What we can say is the feedback we get from patients and from HCPs, our confidence in the innovation that's coming through, and frankly, our results so far make us feel that... You know, the key to this is can and your core question is: Can we continue to lead in innovation? Will we digest the dolutegravir patents not only from a sales point of view, but also from a profits point of view?
You know, we believe that we can. In large part, the innovation that's gonna come through from HIV is gonna be absolutely a key part of that. We will have visibility in 2024, first of 2024, on exactly what phase IIIs we're gonna be moving into to deliver that in time, to your point, and with high confidence, a probability of success, because we know what we're doing here, and we've done it consistently to date. So, despite those who would question it.
And it's probably too early to answer the question, but do you think you will have a self-admin and an ultra long-acting that's physician-administered? Is that the ultimate-
Let's see.
How you see the market or?
Let's see. I mean, both, both ultra long-acting and self-admin will definitely have opportunities in the market.
Mm-hmm. Uh-
You know, you have to see how their relative profiles show up to see what share they'll have.
And I know you've sort of talked a little bit about-
We're gonna be first with both.
I think you talked a little bit about the, you know, the formulation challenges being overcome, in terms of getting cabotegravir into a, you know, a self-administered injectable. So the next decision choice, presumably is, do you go with the existing presentation of CABENUVA , which has got rilpivirine, you have to work with J&J on that? Or do you go for a fully owned GSK presentation-
Well-
with some of your own novel mechanisms? And how far down the decision path on that are you at the moment?
Well, again, I'll let the team answer in detail, but you're obviously raising exactly what we have to weigh up, which is starting with the competitiveness of the asset-
Mm-hmm
... the continued lifecycle innovation of these things. I mean, let's face it, we've started with long-acting. What we're talking about is continually improving it, but doing it in a way that serves an economic profile that makes sense for us as well as, you know, brings the best thing we possibly can for patients-
Mm-hmm
and how we do that over time. So we're very, very thoughtful on all of those questions.
And then, obviously, the key decision is what goes into phase III, which we'll hear in 2024.
Yeah.
So on September 28 , what's the, I guess, what was your, what do you want investors to walk away from? What, what do you want to sort of help people to understand from that, that event?
Yeah, I mean, clarity and confidence, and frankly, consistency, because there are different levels of understanding-
Mm-hmm
... on the profile of our outlook near term and the success of long-acting, full stop. By near term, I'm talking 2026, not next quarter. The reality of the glide path, kind of if I can, if I can say floor and its upsides, on the patent itself, because fundamentally, people... You know, there's just this slight marker that we've given visibility out to 2026, so suddenly something happens then, which is categorically not the case.
Yeah.
In fact, what happens is we continue to accelerate the delivery of long-acting, which obviously reduces structurally the exposure. And then most importantly, you know, giving you a roadmap by product of some of the questions you're asking in detail now, but which would-
Mm-hmm
... annoy my team if I gave you all the answers two weeks before they present it.
We'll wait till the 28th. Okay. So...
I'm sure even you will learn something, I agree.
Good, good. I'm looking forward to it. So, and so I might - actually, is there any other questions on HIV in the room before we move on to... I'm just gonna ask about the Zantac litigation. So, obviously, you settled the Goetz case in California. There's another California trial coming up. Perhaps just maybe high level, because I know you don't want to talk about direct legal strategies, but high level, how do you think about settlement versus litigation? And does it, where the litigation happen, California, for example, versus Delaware, influence your willingness to settle?
Well, I think you answered your own question. You know, this is, it's not the place for me to be discussing, nor would I, our legal strategy. What I will say is we, we have a brilliant internal and external team working on this. We are pleased with our progress so far. We will continue to act in shareholders' interests. We are guided, obviously, by the reality of the science and the 14 independent studies, and we'll continue to defend our, our position vigorously. And, you know, really, we'll keep everybody updated responsibly. We have, the right people working on this, and everybody else is, very, very focused on delivering on what we're here for, for patients and shareholders and the momentum of the company.
Mm-hmm. Okay, and this, do you have any differences between the different... Because there's litigation happening in different parts, pockets of the U.S. at the moment. So you've got a lot of cases in Delaware, some in California. Is there a sort of a combined legal strategy across all of it, or are you dealing with it sort of picking them off case by case, region by region?
Yeah, I'll repeat my first answer to that question. So I'm not gonna talk about legal strategy in here.
So we'll wait to see what happens either ahead of or at the trial. I might shift gears on to IRA.
Yeah, of course.
So just overall exposure. So obviously, we've had the first 10 drugs, but if you look at your overall Medicare exposure, perhaps just help people to understand what your actual exposure to the program is. And then it looks, if you sort of, there's a number of studies out that suggest Trelegy might go on the list next time for the 2027 negotiation. So is that something which you consider a risk, and how would that impact the business?
Well, first of all, I mean, the most important thing to say is, with everything we know and can see, all of the IRA impact is fully factored into our outlooks for 2026 and beyond. I mean, again, we don't have total crystal balls of what will happen ahead, but, it's very much factored in. The two-- I'll come back to Trelegy, but the two parts of the business that are most impacted are actually HIV in 2025, but that's factored into the outlook and, that's the catastrophic coverage piece.
Yeah.
And on our oral drugs, obviously. And then our general meds business, which you'll remember we've given an outlook of being broadly stable in, and that will see some impact on the MP next year. But it's fully factored into being broadly stable. We've done a really—I mean, the team have done a really good job to keep that business, you know, growing. It was a wonderful business, extremely cash generative, and has long-term prospects, not only of scale reach, but of, you know, good profits and returns. And we're very confident we can digest that through.
Don't forget, for Trelegy, which you referred to, I, well, I think it would be unlikely to hit 26 simply because, and I remember this well, 'cause it was in my first year as CEO, that we got this great drug approved and then invested strongly in its lifecycle innovation and new indications. And, that was in, I think, the last quarter or the fall of 2017, 'cause I remember being very focused on it. And I think to get into the next round, you have to have been, in 2016, so it's not major. But anyway, even beyond that, this is a field that is, you know, inhaled respiratory is heavily discounted in the U.S. anyway.
Yeah.
So, you know, we obviously watch this by asset in a lot of detail. I am always thoughtful about the environment in the biggest market in the world, as everybody is, but we obviously have less exposure than those with, you know, huge, huge assets. We have a lot of blockbusters. We have plenty of several billion profile assets, but we're not gonna be in the front line of the sort of multi-multi, heavy spending exposure. I think it does inform a bit the way we, you know, continue to look at capital allocation, discipline, and oncology. And it's gonna be interesting to see how, you know, the weight loss drugs are paid for, and what knock-on effects that has.
But, in terms of our profile, even if it's harder to model, Graham, it's, it's good to have the spread that we have, in this kind of context. And GSK has a long-term, long-term reputation for responsible pricing and engaging constructively. And I would finish with, don't forget the real positive in vaccines. In the end, this is all about efficient allocation of government money, in theory. So there's nothing more efficient and effective than preventing disease-
Mm-hmm.
Before it starts. Absolutely nothing. So, and we see that, you know, in with regulators around the world, and we like to engage constructively on this kind of thing.
One last, I'm gonna squeeze one last question in just, on M&A. The—I guess one of the ideas around Haleon spin, deleveraging-
Yeah.
-reducing dividend, was it just gives you a bit more balance sheet flex, to help sort of bolster mid-stage pipeline. So just, an update really on your, your thoughts on, you know, priority between adding two different franchises, HIV, infectious disease, vaccines, respiratory, you know, where do you see the best opportunities? And is oncology something which GSK is still pursuing, or is that sort of, non-core these days?
Well, I think we've been extremely clear and consistent in our priorities for BD, because it's-
Mm-hmm.
It's brought us. It might be M&A, sometimes it's, you know, different kinds of business development and partnering as well. But what was weird was GSK not doing it. We now do about, I think, about 50% of our portfolio is either partnered or brought in, which is much closer to normal, and it is a priority. And Julie laid out very clearly our capital allocation priorities to be investing in growth, both organically and in, and inorganically, as well as returns to shareholders, all underpinned by a strong balance sheet, and that's really the work we've been focused on. In terms of priorities within that, we invest in prevention, where we are great champions, and treatment. I mean, you have to look at the Affinivax acquisition as, you know, the kind of thing that we continue to do.
In treatment, it's consistently across those four key TAs. Three, where we have, you know, large businesses and a, long-term, track record in infectious diseases, a really ongoing thoughtfulness about, assets and partners there. We built up a nice portfolio for antibiotics, and we continue to think about partners in our hepatitis, area as well. If you look at, HIV, they've been partnering in terms of, technologies like Halozyme. Respiratory, you know, we just closed the Bellus deal on camlipixant, and we haven't touched on the real opportunities for growth we see in our respiratory specialty franchise, profitable growth. Whether it be in IL-5s with new indications in Nucala, whether it be with depimeoca, but also adding this asset of camlipixant from the Bellus deal, which we think could be truly, differentiated.
You know, all of these will have data in 2024 and 2025, and at some point later this year, we'll try and bring an update on a bit more specificity on those. And in oncology, you know, this is part of the high risk, but potentially high reward, space that adds to a balanced profile, but it's a small business for us. We are extremely thoughtful about the discipline of capital allocation, especially in an evolving environment. We're really looking forward to seeing momelotinib come through, and, you know, I think it will be very interesting to see how we execute against that in terms of demonstrating, you know, the, the smartness of the decision, and the quality, which we, we, keep making great leaps forward on of GSK's execution in the field.
Fantastic. Well, we're actually slightly over time. That's my fault. Great to have you here, Emma. Thanks very much today, and have a good day. Thanks, everyone, to the audience as well. Thank you.
Good to see you!