I'm absolutely thrilled that we're clearly going to have the best conversation, the fireside chat that we've had so far.
Bringing the fun.
Incredibly pleased to have Dame Emma Walmsley here. She's CEO and on the board of directors of GlaxoSmithKline. Or sorry, GSK. I have to. I can't say that name anymore. I just, you know, it still resonates for me for such a long period. But Emma, maybe just let's start big picture. And your time, obviously, since joining Glaxo from 2017, I think one of the things that you really hammered home across the board was, you know, remaining disciplined and, you know, really having the kind of focus, particularly as it relates to guidance and thinking about the overall portfolio. That's been really positive. But, you know, where we are today versus, you know, when you took over, where you started.
Right. Well, hi everybody. Thanks for giving us a bit of time, so when I began in this job, the brief was really a big change agenda in group structure, strategy, capital allocation, culture, talent, kind of everything, and we have made enormous progress. We're now in our third year post the demerger with Consumer of delivering highly competitive, profitable growth, pleased to be doing that again. The big shift was to prioritize the pipeline, because that is the point of this industry. The answer to all questions are the pipeline, the pipeline, the pipeline, and to do that by doubling down on our vaccines and our specialty medicines business, because that's a big focus for innovation, the mix shift that will allow them to create more oxygen in the P&L and deliver, to invest further in growth.
I'm glad to say that vaccines and specialty medicines are now about two-thirds of the business. We're making tremendous progress on the pipeline. I think we had 11 phase 3 positive phase 3s this year alone. I'm looking forward to five new launches, hopefully to be approved by the end of next year. The complete transformation of the balance sheet. I think at our peak we were about $29 billion in debt. We're now down to $12 billion. And of course, that's through the demerger. And that's allowed us to invest materially in business development to continue to strengthen the pipeline. I think 16 deals just in the last few years. And it was good to announce a couple more even in the last couple of weeks.
And it's nice to see those deals also start to play back in terms of results, whether that is, you know, the progress we're making on our Ojjaara launch in oncology or, you know, through the rest of the portfolio, continuing to strengthen partnerships in vaccines like mRNA and, of course, in MAPS as well. But there's a lot going on in the pipeline too. And I think the, you know, the fundamentals of that is when we look over the horizon to what's coming next. And I was very pleased at the beginning of this year to upgrade our outlooks not only for 2026, but also for 2031. And that's, of course, because one of the original questions we were always asked was, you know, what's going to happen when dolutegravir comes off patent?
I think we've really built a lot more confidence that we're going to be able to digest that. We upgraded our 2031 outlook to be more than GBP 38 billion in turnover. The real key interesting thing on that right now is that it excludes the Blenrep launch. Of course, since then we've had two phase 3s in with a head-to-head with the market leader in multiple myeloma, where we've had really, really strong results. I'm pleased to have filed that drug just this last quarter in the U.S., Japan, and the EU and hopefully get to an approval there next year. Look, there's always an enormous amount more to do in our industry. It's incredibly exciting. It has its moments of challenges as well.
I'm pleased to have got Zantac behind us this quarter, continuing to work on how we can, you know, even if there are some short-term challenges in some parts of vaccines, how we can. It's brilliant to be able to digest that with the strength of the portfolio, and I'm loving seeing our specialty business growing at 20%, which is our biggest business at the moment.
Great. And, you know, I guess for a lot of companies, Part D redesign in the U.S. is viewed as a unique challenge. I think Glaxo was actually, or sorry, I keep saying Glaxo, GSK was one of the first.
It's a £5 fine.
And we'll pay it elsewhere. But the dynamics around Part D redesign, you know, you got out in front of that. You really kind of talked about it in the context of HIV. Any other influences or impacts on the business year over year next year outside of HIV that we need to think about?
First of all, we have 100% factored all of that in to the guidance that we've given of more than for 2026 of more than 7% top line, more than 11% operating profit growth. And we did flag at Q3 that as part of that, we expect to see GBP 400 million to GBP 500 million of impact in 2025, mainly across specialty, big chunk of that in HIV. None of that changes us delivering the upgraded guidance we've given for HIV, including it's wonderful to see double-digit growth going through there off the back of long-acting too. And I think in general, you know, the industry is navigating what's going on in the IRA. Obviously, we're out the other side of the election and you'll probably have more questions on what we think about that.
But in general, this has not been an environment where healthcare has been top of the agenda. And the only thing that matters is we bring new, different, better, bigger, needed drugs and vaccines. And that's what we're focused on. And, you know, that's how we'll be driving our growth.
And just for a minute, again, the administration dynamic, you know, what really is the focus for the industry at this point? And really, how is GSK tackling the change?
I'm in Washington, D.C. tomorrow, so I'll tell you more after that. I would say the first thing, what matters most in our industry is innovation and the access to that innovation. That is unchanged regardless of the administration or the country. Let's make no mistake, the U.S. is the country that matters most. It's still the biggest market. It's the best market for innovation, the best source of innovation. I've just committed to another $800 million of investment in Marietta, Pennsylvania. And you know, we're very broadly invested both in R&D and in manufacturing and in our commercial teams here. This really does count. I don't think the healthcare issue has been top of the agenda through the election cycle. Again, you know, what we are focused on is engaging constructively with the administration and the regulators.
And obviously, you know, not only FDA, but also institutions like ACIP to make sure that we create the right kind of space to, may I say it, make America healthy again through the innovation that we bring. So I think it's a constructive dialogue. The themes that the Industry Association is focused on, as you know, are areas like PBM reform, 340B, and making sure that the discussions on IRA continue to focus on how we don't get unintended consequences. There are some very good things about, you know, controlling patients out of pocket, making that more predictable, removing copays on vaccines. All of these things are good things, but we need to be, I mean, you know, the debates on nine versus 13 and making sure the indications are not penalized because of the way that system works.
But so I would say there's a pretty aligned view from the industry and we'll continue to engage constructively.
Great. As we think about the, you know, sort of dynamics of making Glaxo, sorry, GSK, I just did it. Wow. I'm going to have a lot of donations.
That's five.
Okay. That's another, so I'm at GBP 15.
It would be more fun if we said everyone has to pay five when you said that. Into the GSK stuff.
Yeah. So GSK, you know, in terms of the benefits of sitting on other competitive, not competitive boards, but other boards in other industries, you know, what are the learnings that you are bringing from, you know, your experience sitting on other boards like Microsoft that, you know, are there learnings that come from that in terms of making GSK more efficient, more impactful?
For sure. And I saw you've got your first TechB io conference coming up. Not that I'm advertising it for you, but I did see that outside. Look, first of all, my job is to be the CEO of GSK, and that's what I put all my energy into with a fantastic team. And we're really pleased with the progress we're making. And there's still more to do. I sit on one external board, which is Microsoft, which is extremely useful to be, as you will all imagine, to have visibility of and be part of what's happening across industries in the field of technology in a heavily regulated, highly engaged with governments, geopolitically core. I mean, you know, it's extremely useful because tech is going to change everything.
And even before I was on that board, we described the purpose of GSK as combining science, technology, and talent because the humans that deploy the tech are important so that we get ahead of disease together. And that literally means preventing it, not only through vaccination, but through earlier intervention, but also changing its course as we do with all of our innovation and seek to do that. And that's the only way we're going to make healthcare, the cost of healthcare sustainable in a world where the demographics and the budgets and burden systems are under so much pressure. So technology will change everything. There is not a boardroom in any serious company that isn't discussing how AI can change productivity. And that is the same for us. And yesterday alone, I had two meetings, one on a compliance meeting, another on how we do our internal training.
They weren't meetings on AI, but AI was highly part of the discussion because it's part of how you enable a modern approach to these kinds of things, but those are going to be table stakes really quickly where you buy stuff off the shelf and you organize your internal processes and your teams and your capabilities, you know, regardless of the industry you're in. I think what's truly going to transform our industry is every big tech will say the two spaces where AI could change things most are education and healthcare, and, you know, if you think about the provision of healthcare, half the world doesn't have access to it that they need. Two billion people can't access the drugs they need.
And the way that this will allow more access through having a doctor in your pocket or multiplying the capability of doctors, the provision in hospitals is going to be transformational, i.e., the world we serve. But then, of course, the big holy grail is unlocking the productivity in R&D, which is fundamentally low and high risk and takes a long time and very expensive for the industry, not GSK specifically. And that will change in target discovery, in molecule design, in patient phenotyping and subsegmentation and biomarkers and all of that work because of this explosion of data that we're all working on and, of course, the genetics and functional genomics and biomarker work.
And then, you know, before you even start talking about what happens in trial design, whether that's recruitment or monitoring or the fact that we are nearly halving the time it takes us to submit a file because you can do documents. So it's impacting everywhere. It's going to be far more than everyone thinks and probably not quite as fast as everyone thinks, but it's massive. And I think the industry will be completely changed in 10 years' time.
Great. BD, you know, the focus area, so there will be more. You know, was there any link between Zantac and an ability to do business development at a, you know, more aggressive level or no? And it's still kind of regular way, you know, stay the course. Does anything change?
Yes and no. I mean, first of all, I'm extremely pleased to have put that, you know, behind us and to have drawn a line, and that was all about acting in shareholders' interests, and we fundamentally removed an uncertainty and a potential very material liability, and we've seen how others, both in our industry and beyond it, have got into sustained trouble on these kinds of things. That was a lot of work, but we said from the beginning it was a lot of work for a very small number of people and the vast majority of the organization would not be distracted by it, has not been distracted by it. There was nothing we did not invest in that we wanted to invest in during the Zantac period in that sense. That said, it's really good to have it behind us.
We continue to see in our capital allocation framework the number one priority is to invest in growth of the company. That is the point to innovate. That can be organic and inorganic. We've done a lot of deals. We want to do more deals, but it's not because you've got more capacity that you should in any way compromise your standards on returns. What matters to us is not only the flow of the funnel, but it is also high standards on where we allocate things. I think you've seen discipline there. Our risk appetite is absolutely hungry. You know, anyone can spend money. We are thoughtful about that. You know, we don't need to do any massive seismic deals, but we are not afraid to take on risk when it's in the balance of the full portfolio.
You know, that's what certainly as a leadership team, we spend time looking at deals. We've been happy to announce a few just recently and we'll continue to do that.
When you look at the areas of focus in specialty, in vaccines, and across the broader portfolio oncology as well, where do you feel the, you know, key areas of need actually are, whether it be within the company or areas of focus that you're, you know, where you feel the opportunity should be trained?
Yeah, well, I prefer the word opportunity than need because, you know, you have to. We spend billions every year organically, and we better be doing that smartly and continuing to drive that forward. We've upgraded our outlooks. We feel even more confident, even while digesting some challenges for sure short term. But because we've had all these positive phase 3s and we've got other things coming through in the pipeline, we want to execute against the deals we've done, deliver their value, and continue to advance what we have. That said, because of supply opportunities, I think it would be fair to say there's no change in our appetite and the four areas we want to focus on in infectious diseases, which is vaccines, HIV, respiratory immunology, and oncology. It's probably in the latter two where there is more supply opportunity.
You've seen us do some great deals in respiratory, whether it's hopefully the first super long acting TSLP, whether it's Camlipixant that we'll read out later on this year. In immunology, we just did a deal for lupus. I want to, you know, we're looking at adding more in those spaces thoughtfully and the adjacencies to them. And in oncology, you know, couldn't be more pleased with them and ambitious for the prospects we have in ADCs. Let's not forget Blenrep, our first ADC. And for those that are interested, I would join our meet the management meeting in the middle of December when you'll see a bit more of a double click both on respy and on oncology too. It's an emerging business for us, but I'm so pleased to see the momentum. We kind of doubled oncology this year.
We've passed the GBP 1 billion mark and, you know, a lot more to come, I think.
So let's talk about some of the sort of interim challenges.
Sure.
The vaccines dynamic that kind of came into play at the ACIP and then subsequently, I would argue I was, I believe GSK was somewhat surprised. I was definitely very surprised personally. But what kind of evolves that sort of risk-taking mentality? Is it just we're just going to keep bringing data over time with real-world experience, ACIP's risk-taking? Is it, you know, you just develop that real-world data and you start to really change behavior?
Yeah. I mean, obviously we were surprised with what happened this year because we had to update our outlooks for vaccines. But it's really important to say we did a double upgrade on the business this year. And despite the updated outlook on vaccines, we're able to still commit to delivering that because of the strength of the broader portfolio and our specialty business, which is our biggest business, is up 20% with great momentum. And by the way, momentum in HIV, double digit, double digit momentum in respiratory immunology, double digit momentum in oncology. So we have the strength of the portfolio to digest this. And I think it's really important to try and take a medium and longer term view on the vaccines business, not be distracted by one season, especially not on a brand new vaccine that's in the very early foothills of its journey.
But definitely we weren't expecting in the summer to not have 50 to 59 approved and to have a material restriction on the 60 to 75-year-old cohort. Now, interestingly, you know, at the beginning with this vaccine, and remember people have been working for 50 years to try and get one, and we came through first with a very strong vaccine with a great profile. We thought the build would take a bit of time as it normally does with new vaccines. And, you know, we feel very ambitious still for a strong peak here sales. We think it can be $3 billion. We still believe in that. The ACIP restriction came in and then you compounded that with a very early strong COVID season and very low RSV season, which by the way has only happened twice in 15 years.
The other time was during COVID when everyone was locked up. This is, you know, this disease has not disappeared from the planet. It will, it's this year, look at the weather outside, you know, you can see that phenomenon. I think the answer with ACIP, hopefully post election too, is just to keep engaging with the data, the facts. We have a very strong benefit risk profile. We can see that you've still got 15,000 people, you know, when you take a normal year dying in America from this. We are very confident that over time we will get to revax within five years. You will get cohort expansion. We will get further penetration. 80% of the Americans for whom this is relevant have not yet been vaccinated. Once combos come in on flu and COVID, you will get an arms race.
We've got further geographic expansion as well as one would anticipate more normal seasonal patterns. This is not even banking on something significant. In the meantime, we've been cautious for our outlook in 2025 for vaccines, but of course we'll continue to engage with data through the next ACIP meetings and very confident more broadly based on the prospects for these big building blocks in vaccines, whether it's Shingrix or RSV or hopefully later mRNA and further down the line MAPS.
I have to ask about China, not in the context of anything that GSK's done wrong, but.
GSK.
Sorry, I did it again. There we go. GSK.
It's like my only goal for this podcast.
Really fun. You're going to actually change me today, but not in the context of anything that GSK has done wrong, but, you know.
Definitely not.
In the context of actually growing the Shingrix opportunity in China, but also, you know, we don't really talk about RSV in China as an incremental opportunity very often, and, you know, I think it presumably would be quite substantial.
Yeah. So look, we think China is a big opportunity for us in vaccines. It's also there is opportunity for us in our Hep B program, which is a huge burden of disease in China. We still have an option on a TB vaccine. You know, there are other parts and where it's a small business for us in China, relatively speaking. Let's see whether geopolitics open up opportunities or not, you know, but we, the fundamental market there is still plenty of opportunity. And by the way, we have done lots of value creation in the BD we do out of China. So this is a market we are, you know, substantially engaged in. The partnership with Zhifei was the bet that we have taken, and that is a bet we still would take every time and we want to keep taking.
They have a track record of building billion-dollar vaccines. They have access to multi-billion. They have access to 30,000 points of sale. We would get nowhere near that on our own. And they are a well-audited, you know, partner with a large American company that has had a good track record there. We have a very interesting contract, which includes an option on RSV later in the decade. But candidly, we're not immune, no pun intended, for the macro pressure that is in China at the moment. And, you know, my interest is not to push in stock if consumer capacity to spend is restricted at the moment, as well as regional cash flow capacity to pay. So, you know, we want to, and we are engaging very constructively with this partner to be thoughtful about how we build for the long term.
You know, I think that's important for Shingrix. I'm sure we can get great growth and a really good business. We have a very strong contract there, but I'm more interested in being a good partner.
Great. Okay. That's super helpful to understand. So it's going to take a little bit more time.
I think so, and we should have more visibility in the new year on that.
Great. Okay. Fantastic. Let's just very quickly, I apologize.
You can do whatever.
In the short time. Glaxo. Sorry, I did it again. GSK.
It's like, what is the matter?
I know. I owe a lot of money.
Don't press the red button.
It's part of the fun. So, specialty. Let's go to specialty. The key dynamics of focus, you know, maybe we'll just, you know, just touch on HIV and the opportunity for.
It's a great business.
Long acting. I mean, it's been an unbelievable business.
It will be an unbelievable.
For GSK and for Glaxo.
Double-digit growth.
You know, for a very long time. I guess the dynamics around long acting, there's a lot of questions around PrEP, but treatment seems like really the big.
Today the treatment market is 10 times the size of the PrEP market. I think the PrEP market will grow, but the treatment market will always be the much bigger market. There's no question about that. The real thing to understand about GSK is with ViiV, is we have consistently led the way in innovation in HIV every single time. The first drugs for HIV, the integrase inhibitors, which are like 25 million of the people in the world, of the 29 million of the people in the world are on some kind of integrase inhibitor, mainly licensed by us. These are drugs that seriously work in a very complicated virus. Whether it was the first two drug regimen that came through, we were the first to come through with that. That's been incredibly successful for us with Dovato.
And then, of course, long acting, we are years ahead of others. And we've built a really good business there that's 50% of our growth and is the bet that we are taking. At the moment, we have two monthly injections. We're going to move that to four and then to six. And in treatment, we don't see anyone coming close to us with a solution there for quite a lot of years. And we think integrase needs to be at the core. In PrEP, it's good to have longer acting. It's also good to have something with good tolerability. And what's exciting for us is when you see others' results in long acting in PrEP, it completely wipes the floor with any orals. So this is another piece of evidence of the fact that long acting is the future in this field.
And although some started by saying long acting was a bad idea, it's now where everybody's pipeline has moved. So we've been first. We want to continue a fight. We like others coming in because it makes the market bigger. And we're looking forward to continue to lead the way.
Before I have any other verbal tics, I will thank you for joining us. It's been an absolute pleasure.
Thanks, everybody.
Thank you so much for joining us. Lots.