On February 6, 2019 GlaxoSmithKline reported that 2018 financial, product and strategy highlights (Press release, GlaxoSmithKline, FEB 6, 2019, View Source [SID1234533109]).
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Group sales £30.8 billion, +2% AER, +5% CER
Pharmaceuticals sales £17.3 billion, flat AER, +2% CER; Vaccines sales £5.9 billion, +14% AER, +16% CER; Consumer Healthcare sales £7.7 billion, -1% AER, +2% CER
Total new Respiratory product sales £2.6 billion, +35% AER, +38% CER
Total HIV sales £4.7 billion, +9% AER, +11% CER. Dolutegravir-based regimens £4.4 billion, +14% AER, +16% CER
Shingrix sales £784 million, +>100% AER, +>100% CER
Total Group operating margin 17.8%, +4.3 percentage points AER, +5.0 percentage points CER
Adjusted Group operating margin 28.4%, flat AER, +0.5 percentage points CER. (Pharmaceuticals: 33.3%; Vaccines 33.0%; Consumer Healthcare 19.8%)
Total EPS 73.7p, +>100% AER, +>100% CER, reflecting stronger operating performance, lower restructuring and impairment charges as well as a favourable comparison with impact of US tax reform in 2017
Adjusted EPS 119.4p, +7% AER, +12% CER, driven by improved operating margin and continued financial efficiencies
Net cash flow from operations £8.4 billion. Free cash flow £5.7 billion, improvement reflecting greater focus on cash conversion, particularly working capital
23p dividend declared for the quarter; 80p for full year 2018
4 major transactions, including new Consumer Healthcare JV, announced in 2018 to support strategy and reshape of the Group’s portfolio
2019 guidance
Expect Adjusted EPS to decline -5% to -9% CER reflecting recent approval of a generic competitor to Advair in the US. Guidance also reflects expected impact of Tesaro acquisition and assumes Consumer Healthcare nutrition disposal
and Consumer JV with Pfizer close as previously indicated
Expect 80p dividend for 2019
Pipeline update and newsflow
Rebuild of Pharmaceuticals pipeline continues with 33* of the 46* new medicines now in development targeting modulation of the immune system
Major progress made in immuno-oncology pipeline with 16* assets now in clinical development, reflecting organic progression, the Tesaro acquisition and the alliance with Merck KGaA, Darmstadt, Germany*
Major data readouts and other significant newsflow expected on multiple new medicines in HIV, Oncology, Immuno-inflammation and Respiratory in 2019:
– FDA approval decision expected for dolutegravir + lamivudine in H1
– FDA filings planned for long-acting injectable cabotegravir + rilpivirine in H1 and fostemsavir for highly treatment-experienced patients in H2
– Pivotal stage data readouts expected for BCMA for 4L multiple myeloma, Zejula for 1L maintenance ovarian cancer and PD1 dostarlimab for endometrial cancer
– Updated phase I PFS data from DREAMM-1 study for BCMA to be published in leading journal in H1
– Phase III start planned for anti-GMCSF for treatment of rheumatoid arthritis in H2
– Results of pivotal CAPTAIN study to support filing of Trelegy for use in asthma expected in H1
Emma Walmsley, Chief Executive Officer, GSK said:
"GSK delivered improved operating performance in 2018 with Group sales growth, strong commercial execution of new product launches, especially Shingrix, continued cost discipline and better cash generation.
"It was also a significant year for the Group strategically, with the launch of a new R&D strategy focused on immunology, genetics and new technologies, together with a series of transactions that support our strategy and reshape of the Group’s portfolio.
"We are making good progress against our priority to rebuild our Pharmaceuticals pipeline, particularly in oncology. Since July, we have doubled the number of oncology assets in clinical development to 16 through the advancement of our internal programmes and with targeted business development including the recently completed acquisition of Tesaro and our new alliance with Merck KGaA that is expected to close in Q1 2019. During 2019, we expect to receive pivotal data on three new cancer medicines, all of which have the potential to be launched in the next two years.
"We are also focused on completing the transactions to divest our Consumer Healthcare nutrition business to Unilever; and the formation of our new joint venture with Pfizer that will create a new, world leading Consumer Healthcare company and which provides a unique opportunity to deliver substantial value for shareholders.
"Finally, I would like to thank all our customers, suppliers and employees for their support and hard work in 2018 and look forward to working with them in 2019, which will be an important year of execution for GSK."
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