GSK plc (NYSE:GSK) Citi’s 17th Annual BioPharma Conference September 7, 2022 1:50 PM ET
Company Participants
Roger Connor – President, Global Vaccines & Global Health
Phil Dormitzer – Senior Vice President, Head of Vaccines R&D
Conference Call Participants
Andrew Baum – Citigroup
Andrew Baum
Terrific. Well, welcome back. I hope you had a good lunch and successful morning. If everyone could take their seats. Delighted to introduce our session. We have two key speakers from GSK. We have the President of Vaccines and Global Health. Roger Connor. And then, secondly, we have Phil Dormitzer, who recently joined from Pfizer, who is the Head of R&D and Vaccines. Right. Got it. Okay. I have to make sure I get the terminology correct.
So, look, I won’t draw on the share price impact from the ongoing focus on nitrosamines and the concern over liability. But putting that aside, vaccines has been an area which I know the company is feeling increasingly upbeat on. We’re going to talk about the RSV update. We’re going to talk about Shingrix, and then I want to spend some time talking about some of the next generation vaccines that you have in your pipe.
So, maybe to kick off on Shingrix, could you update us as to the levels of penetration of the label population you have attained within the US currently, as well as in the other geographic territories, and give us some sense of what are the barriers to adoption? So, for example, in the UK, Shingrix is not available unless you meet certain pre-specified criteria. What are you waiting for? Is it a price consideration that you’re looking at and some of these gating factors that could open up the ex-US markets as the US starts to reach somewhere near an asymptote on penetration in the prevalent patient population?
Roger Connor
Andrew, it’s good to see you. And nice to see everyone as well. Maybe just to start on Shingrix, I have to keep pinching myself what a gift we’ve been given here in terms of the product. It’s an incredible vaccine in terms of its level of efficacy, the number of years of protection that we have now, data showing more than eight years of protection. So, it’s a very key growth driver for GSK going forward.
In terms of level of penetration and launches, we, in the US, I think are still only scratching the surface. There are 120 million people in the US who are over 50, 33 million people have had one dose or more. So, it’s about 28% that we’ve seen. So, there’s still a very large cohort for us to catch up on.
As you mentioned, we’re completely unconstrained in supply now. So, the floodgates have opened and we’re launching across the world. We’re in 24 markets now and we’ll be in 35 markets by 2024. And that will be 90% of the world covered by value. So, huge amount of activity. Capital allocated to that global rollout to establish that that product globally. We’re seeing very good protection of the price as we move out of the US and into other markets as well because the health economics of this vaccine are incredibly strong because of what I mentioned before.
Just on your question on what sort of barriers do we come up across, I’d say the critical one that we’re investing in now is awareness. In the US, we had Zostavax from Merck. It was our built out market. It was known. Many people had been vaccinated, actually, and we’ve got a recommendation to revaccinate that population as well.
So, our priority now as we’re rolling out globally is to make sure that we’re building awareness of shingles. We’re engaging with the regulator and with healthcare systems to extend health economics and have a pricing discussion on that basis. But our big focus is making sure that we’re building that market as we’re then – we’re going to start a year or two in advance of the actual launch mechanism itself.
Andrew Baum
And so, by the activities that have already begun in the UK – and I’m using UK just because of personal familiarity, not because it’s a huge market, probably only 4% or so, but there obviously has an uptick in educational activities of zoster, which anticipates that presumably those pricing discussions are ongoing, correct, and the government is going to segue. So, if you could talk to that and any indication you can give to pricing in the UK relative to the US pricing?
Roger Connor
Well, I won’t specifically comment on discussions on pricing going forward. But generally, in that pricing discussion that we have at the government level, it’s a well-trodden path for us. We have very strong health economic data on the impact.
Let’s take one of the bigger markets where we are more established, like Germany or Italy. In these countries, we’ve been able to have a pricing discussion very openly around the impact we’re having and been able to come close to that US price in that marketplace as well. We think that’s a very good signal in terms of…
Andrew Baum
And close, you mean within 20%?
Roger Connor
20% in terms of overall pricing. So, every discussion will be different and we’ll have to work – we’ll work through those individually as well. But we’re seeing very strong protection of that level of return.
Andrew Baum
And penetration – because, obviously, you are going to reach an asymptote at some point in the US, the other territories start to become important. So where are you in Germany, for example, where are you in China penetration?
Roger Connor
I won’t give a specific Germany penetration number, but what I would say is that it’s further along than any of our other markets after the US because we launch in Germany, we know very soon after the US, penetration going very strong. Other markets will take more time. Because as I mentioned, Zostavax was not present in many.
China is a very interesting market for us. It is a very big ambition for Shingrix. We have a big ambition level. It is a marketplace that will again support a US price in the private market. In that population, we can get the same price in the US for Shingrix as we can elsewhere. I think it’s going to take longer to make that happen because of – particularly the zero COVID policy is causing congestion within their points of vaccination. That’s the main channel to bring Shingrix to the Chinese market. So that’s going to take us a little bit longer to build. But that doesn’t impact in any way our ambition for this incredible vaccine.
We have said that the vaccine – we will double Shingrix by 2026. That means it will be a greater than a £4 billion vaccine [indiscernible]. And we’re on track to deliver that, all thanks to the sudden constrained supply situation that we have, but also just because of the level of efficacy and the duration and the health economic offering that we’ve got.
Andrew Baum
And the doubling is coming, what, 50/50 from increased penetration of the US and ex-US markets?
Roger Connor
A combination actually. So, it is – at the moment, ex-US is around 30% of our market. We expect it to grow over time. We will reach saturation in the US at some point. By 2026, that will be £4 billion product and we’ll be growing China as well. So beyond that point, we still see opportunity, but it’s a big growth driver for our overall vaccines ambition, which, again, 3 million, 2026, we’re going to outpace the market. We’re going to grow at high-single digit compound annual growth rate as a business and Shingrix, meningitis and RSV will be big contributors.
Andrew Baum
Before we come off shingles – and I haven’t forgotten about Phil, coming – is could you talk to how the increased incidence of Shingrix in patients who have had COVID? And this is a bit ethereal and kind of provocative, but there is some gesture that in the minority of patients reactivation of the virus that causes Shingrix is associated with increased risk of Alzheimer’s. And there’s a long background of data related to both this virus and other related viruses or unrelated viruses. So, more prescient is obviously this COVID. But if you have any thoughts or interest on the Alzheimer’s angle, we’ll be interested to hear.
Roger Connor
Maybe I’ll start with the COVID situation and Phil can give…
Phil Dormitzer
Okay, the new scientific plan.
Roger Connor
Maybe just on COVID, we published a trial and data in April of this year, which show that if you’re 50 plus and you’ve had COVID, you are at higher risk of activating herpes zoster. Therefore, you’re at higher risk of shingles. We’ve shared that data across the world and are using it again to educate healthcare systems around the link that is here. And we’re using that to make sure that people understand, again, that there is a ruling in that activation.
In terms of materiality of that uptick, it’s something very difficult to quantify, but we are seeing some very good interactions and positivity from the government interactions that we’re having based on it. Maybe on the Alzheimer’s, please.
Phil Dormitzer
At this point, it’s a three dimensional cell culture model where you do see a reactivation of Varicella Zoster, the reactivation of herpes simplex, leading to some histological indications. I’d say it is early days. It’s part of a theme that we’re seeing, for example, with Epstein Barr Virus and multiple sclerosis. I’d say interesting, to be followed up, but I wouldn’t, at this point, say it’s verified in humans.
Andrew Baum
Yeah. There are some observational data from patients who have Zostavax who seem to demonstrate that – there’s obviously patient selection and bias.
Phil Dormitzer
Exactly.
Andrew Baum
It just caught my eye. And I thought since I had you, it’d be interesting to ask. So maybe we could shift gear and go to RSV. Because with shingles, you’re obviously building on a market which someone else has built for you, and so it’s that much easier. But you have a superior product here. You are building a market de novo. Now, you are probably going to have some help in building that market from Pfizer and J&J and so on, but it’s still de novo. So when you think about how you’re going to drive home this message, shingles, everyone knows someone who’s had shingles. Everyone associates shingles with disfiguration, agonizing pain, it’s quite an easy sell to make. RSV is a virus which no one has really heard of outside healthcare professionals and a small number of people who may have been admitted to hospital. How’d you arrive the uptake of it and what is the strategy for accelerating adoption?
Roger Connor
We are both really looking forward to the day when we can talk real data and, a little unsure, talk to our timeline for sharing. The words that we’re constantly using our RSV vaccine readout is exceptional and consistent. So we really believe that when – if we have a special vaccine here with exceptional performance, we can again impact a disease, a pathogen that the world has been waiting over – working for almost 50 years to try and develop.
Now, you’re right, it’s nowhere near the level of awareness that you have compared to a condition like shingle. If you take US, it’s all about ACIP, both that engagement and showing and understanding both the disease burden and the impact of the vaccine.
Andrew Baum
And if they tick it and we don’t know what age group they’re going to tick it for, whether it’s your patient population, or more narrow…
Roger Connor
Really ideally as broad as possible. What I would say is our data across segments that we’ve gotten our secondary endpoints, whether that be age group, where, whether it be [indiscernible], whether it be someone suffering with a comorbidity, which we know is critical in the disease burden, our data is exceptional throughout. That we believe will be very important to achieve an ACIP recommendation.
At the same time, we have to prepare the market. This will be, like shingles, 60% of – close to 60% of our shingles activity happens through the retail. And so, there is a consumer element to this, which we know we have to build. And this is where the competitive environment will actually – weirdly, because everybody will be building this. We will be doing our own programs to make sure that we build that awareness as well.
The numbers speak for themselves. This is – in the US alone, 177,000 hospitalizations a year, 14,000 deaths. The world needs an exceptional vaccine. And that’s what we intend to bring to the market.
Andrew Baum
And the conversations with European payers and the adoption rate in Europe, it’s obviously a very different dynamic. You don’t have ACIP. You have government controls over access. And how does that work?
Roger Connor
Very similar mechanism, to be honest. Although it’s different in each country, there is some element of technology assessment that’s put in place and the health economic modeling that we’re doing now based on those data that we have from our trials are fundamental for creating the case where we go in to discuss that – the profile of the vaccine.
Andrew Baum
And how should we think about pricing relative to Shingrix?
Roger Connor
It’s too soon to tell. I’ll be honest, I think it is a vaccine that will be based on the value that it creates. This vaccine will create value. There just are a number of variables that play out for us. We need to understand fully the competitive environment.
Andrew Baum
What percentage of patients get admitted to hospital, potential patients, adults, adults over 50 who have RSV?
Roger Connor
Percentage of people who suffer from RSV who are then hospitalized? I don’t know that exact percentage.
Andrew Baum
I’m guessing it’s pretty small. Obviously, it’s higher in the…
Roger Connor
It would be smaller, but that is where the healthcare burden will be. And that’s why we believe that the data analysis showing your impact on those severe populations is critical because that’s going to be where the vaccine that has the biggest impact and makes the biggest impact on health care systems will be important.
We are currently converting our clinical data into that health economic model. We’re looking to understand the overall disease burden even further. And then when we have and understand the clinical or the competitive environment that allows us to have more –I’d say more certainty on the pricing.
Andrew Baum
So, on the comparative efficacy versus the other company, as Pfizer likes to call you, they’ve shared a little bit more [indiscernible] than you have in terms of the data, right? So they’ve given the [indiscernible] symptom score. And while there are inherent dangers in cross trial comparisons, when you see that data, how do you feel on a competitive profile versus what they’ve demonstrated? And obviously, for those who weren’t aware, Phil spent a large part of his former tenure, prior to joining GSK, at the other company.
Phil Dormitzer
My comments will be based strictly on GSK data. So we were very confident, very pleased with the data when we first saw the GSK data. Now, having seen what Pfizer has released, we remain very confident.
Andrew Baum
Okay. And then when you think about – there’s one area that we’ve discussed before is what separates the two of you. Well, obviously, they’re different approach, they’re different virus, they’re different vaccines, but one of the features is there’s an adjuvant included in yours. And so, one thinks about the durability of protection, but it’s too early to tell. But we’ll see that in the fullness of time. And the other one is the level of protection given in patients who have got senescent immune system, so the more elderly patients. So, I know you’ve coronated the magnitude of protection is similar across all age groups. I think you’ve said that?
Phil Dormitzer
All age groups that we’ve tested, which was all older adults.
Andrew Baum
And you had some representation of the over 70. So, what percentage of your trial was over 70?
Phil Dormitzer
There were more between 60 and 70 and between 70 and up. We had a small number of above 80. So I don’t know the exact percentage number. But it’s enough to had subgroup estimates with pretty narrow confidence intervals.
One thing that we have going into this is the team ramped up enrollment in the trial right as social distancing, masking was going down, we were able to capture the big surge of RSV that came, which enabled us to do these sorts of subgroup analyses. And what we see is not only is the efficacy, I believe the word is exceptional, was it? Exceptional. And we see it across age groups across RSV A and B and across different severities of disease as well.
Whether the adjuvant is what is responsible for that kind of very high uniform level of efficacy, we will have to see. But what we do have is we have that observation and we have the numbers to be able to demonstrate it.
Andrew Baum
And you amended your clinical trial program, I think, to explore whether annual boosting added benefit. From an immunological context, given we don’t have much else and I’m not sure the animal models probably tell us very much in this context, what’s your expectation? And would it be for a subgroup of patients as you’re seeing in COVID that the immunosenescent, immunocompromised, they may well benefit? How are you thinking about this? What’s your prior?
Phil Dormitzer
The trial will continue to observe participants for three years. None of those participants will have been immunized once and we simply follow them for three years. Others will receive the vaccine every year. We will have the data to accurately determine what duration looks like. Theoretically, it’s certainly possible that the adjuvant could have an effect, but my preference is actually see what the data show.
Andrew Baum
Moving on to your pneumococcal vaccines where GSK has been a bit part player, right, because you had – was it Synflorix, which in emerging markets did something that didn’t trouble the scorer, as we say in the UK and in the West, but you now have acquired a company called Affinivax. They I think have got breakthrough designation.
Phil Dormitzer
They do.
Andrew Baum
I want to say 24 valent.
Phil Dormitzer
24 valent.
Andrew Baum
Remembering correctly. So could you talk through the time lines, trial designs and is this just a never ending arms race? To what extent is you reach an asymptote in terms of clinical value add because, obviously, if you’re just adding protection against serotypes which are associated with minimal disease, who cares? What extent is that dynamic that serotypes become more relevant because of the pressures put on vaccines. That type of discussion will be useful.
Phil Dormitzer
So, underlying the Affinivax acknowledge acquired is this fundamental platform called MAPS, Multiple Antigen Presenting System. And it addresses a fundamental problem in the arms race in pneumococcal vaccines, and that is if you look at published data, you see that as more serotypes are added, often the level of response against each added antigen goes down.
The MAPS approach has demonstrated in humans that not only can you add more serotypes, but you also see maintain and sometimes even higher responses against each of the individual serotypes on top of it because it uses pneumococcal proteins as carriers, not proteins that are relevant to the pathogen. You also have the added potential benefit of immune responses against the protein as well as against the glycan. We think this is a genuinely better way to make pneumococcal vaccines that can overcome these limitations.
Now, it is true – I think something like 95 total serotypes out there of pneumococcus, and there is a point of diminishing returns. I think once you start going much above the mid-30s, you’re probably getting there, particularly if you have this added response against each stereotype and the potential for cross serotype protection based on proteins. So there will be a limitation. I think this will get us to that point more effectively than you can by simply using the current technologies out there and trying to just add more and more where we’d start to see really diminishing returns not just many more serotypes, but from diminishing responses as you pack more on.
Andrew Baum
And this is in adult and children or solely in adult?
Phil Dormitzer
Both. So, what you’ll see is this series of candidates, first 24 valent and then 30-plus valents, adults and then pediatric in each case.
Andrew Baum
There’s a couple of questions here. So number one, the clinical trial for your Phase 3 is not yet published, correct?
Phil Dormitzer
Correct.
Andrew Baum
Okay. But we should expect that to be published and the recruitment to start next year?
Phil Dormitzer
We’re on track to – so we’re now in Phase 2 for older adults for 24 valent. And then the next thing which should probably be coming in the coming year would be Phase 3 for older adults.
Andrew Baum
In terms of capacity, you have enough sufficient capacity. Can you repurpose Synflorix without additional sites? Does it require additional CapEx?
Roger Connor
This is a beautiful fit for us on many levels, on commercial strategy, Andrew, on R&D and technology, but also in manufacturing. So, as you mentioned, Synflorix, a lower valency pneumococcal conjugate vaccine, we have a facility that makes polysaccharides that was dropping in utilization because it was declining, as you mentioned. This is just such a wonderful fit. It makes polysaccharides. It will just make more polysaccharides in the future.
The MAPS technology is a lovely, simplistic single bioreactor process. So, again, its simplicity of this is really attractive. What I’d add to what Phil’s mentioned is we’ve been looking at this piece for well over a year. We knew that this is a very important value pool in vaccines. After COVID, it is the biggest value pool. We wanted to leapfrog the technology. We wanted to use a different technology that solves some of the challenges that you see with normal conjugation vaccines, and that’s what we think that we’ve found with the MAPS technology as well. And one of the reasons why it’s such a lovely strategic fit, commercially, we know this marketplace, it’s going to be an older adult and pediatric vaccine, it’s going to add really nicely to our overall portfolio.
Andrew Baum
So going a little bit earlier in your pipe, Pfizer recently had a failure with a very nice C. diff approach. So, it was a well-designed trial. It tried to remedy the mistakes which others such as Sanofi had failed. It’s a material unmet medical need. It’s got a high economic cost. And you have one, right? And again, sort of shame on me, I can’t remember whether you’re going after the toxin or whether you’re going after the bacteria, but that’s obviously a key factor. And then the second is the trial design. So, could you share with me how you’re thinking about designing a C. diff trial and why your vaccine – it may be just simply it’s not a tox solid [ph] vaccine. Explain why the confidence is there.
Phil Dormitzer
Again based only on GSK information, there is both a candidate that is going after the toxin and there’s potential to use the MAPS technology to also address the bug, as well as the toxin made by the bug. And so, looking at the published data or the released data at this point, I think there’s a fundamental question.
Do you accept that if you simply lower the bar a bit, you get over the bar when what’s been released thus far doesn’t? From another company. Or do you say we’re going to take the lesson here and say, we’re going to actually make a better vaccine, perhaps one that does more than just address the toxin. And those are the sorts of strategic and scientific discussions that we’re having right now.
Andrew Baum
And in terms of when this moves forward into – remind me, it’s in Phase 2a, is it? 2b?
Phil Dormitzer
I’ll have to check on exactly what phase. But I think what we want to do is, in addition to looking at where the current vaccine is with the current goals, this is what inspired a strategic rethink. There are a couple of approaches. If you simply change the endpoint to severe disease…
Andrew Baum
They would have made it.
Phil Dormitzer
It appears so. And that’s one option. But the other option is to say, okay, let’s take some learnings and actually make something that does even better. And at this point, both options are open.
Andrew Baum
And then just on BD, because I’m sure you’re looking around, as are the other major players, and there’s not many of them. And that’s interesting because, of course, you’re fishing in a pool where there’s other – there’s less fishermen, right? And Affinivax was perfect because, of course, the other players were conflicted, so they couldn’t possibly participate. But it was a perfect setup for you. And the fact that integrated with Synflorix was obviously helpful. How many other assets are there, which means that the pipeline could get stopped? Do you see a burgeoning or a growing discovery platform? Or is it really going to rest on internal discovery? So, are there more assets available for BD? Or it’s just the pool is finite, and therefore, we’re going to have to focus on our internal discovery efforts.
Phil Dormitzer
There are absolutely more assets. Some of them might be whole programs, as we saw with Affinivax. In other cases, there are specific technologies that can enhance programs, not by gaining whole vaccines, but by gaining specific technologies out there. Obviously, the RNA field is one example. There’s a whole suite of technologies.
Andrew Baum
Adjuvants or…?
Phil Dormitzer
Adjuvants, delivery systems, approaches. So, we’re very actively looking outside as we pursue our internal research and development as well.
Roger Connor
As we talk to external partners, we’re a very attractive partner for anybody coming through with a technology or an asset, as Phil mentioned. If you look at any of GSK’s current marketed vaccines, there’s some element of business development and partnership involved in some aspect. It is fundamental in the case of vaccine that you are partnered and we really believe we are and will continue to be a partner of choice in this space.
Because Affinivax wanted to work with GSK, obviously, because of our experience, technology, our scale, our commercial engine, our regulatory know-how, all the things that are critical for a vaccine partner as well. We want to make sure that we are on. People understand what those skills, what their opportunity is by partnering with us.
mRNA is a space where I think you’ve got to continue to have your finger on the pulse of what’s happening externally. Whether it’s in the space of the lipid nanoparticles themselves or in other areas, that’s something that we’re constantly scanning.
Andrew Baum
And one of the moves that I think [indiscernible] saw was the integration of the pharma and vaccines development, how has that changed in speed, in execution and how tangibly, and if you could give us a couple of examples to illustrate any points you might make, that’d be helpful.
Phil Dormitzer
So we started working together very closely with our pharma colleagues. In fact, one time, it was very much – you had a vaccine portfolio and you had a pharma portfolio that would include everything from small molecules to antibodies to [indiscernible] biologics. We’re shifting to a model where, for infectious disease, we look at the targets and we ask as one company what is the best way to address these targets. An example might be chronic hepatitis B, where one starts to think of regimens that involve biologics, immunomodulators, vaccines, asking how do we address the disease most effectively using all the tools.
One thing that GSK has going for it is this tremendous array of platforms and a tremendous array of experience in vaccines. It’s really playing to the company’s strengths, to be able to combine all the potential modalities with a single coherent strategy across the vaccine and pharma divisions, so that we can tackle each infectious problem by the most effective means.
Phil Dormitzer
The other element, Andrew, as well is that what we’ve seen – one of the reasons why we did it, we want to optimize capital allocation. We run one capital allocation process for the company now where all assets are plotted on efficiency frontier, as you can imagine, for what’s the return for the next dollar spent and develop that asset. From a vaccines point of view, that’s leading to an increased allocation of capital because some of the vaccines business cases or investment are incredibly wrong. And I think as a company, we’re seeing standardizing that approach, rather than having two envelopes that are optimized within those two envelopes, having one that is optimized with vaccines and pharma really because the science is converging. And as Phil mentioned, there’s so much scientific synergy, now we’re getting this capital allocation benefit.
Andrew Baum
And when we think about – because, obviously, the cost associated with vaccine development, obviously, there’s the cost of the trial, but then you have CapEx, right, and that changes across platform. So, obviously, an mRNA, I’m assuming the CapEx is materially lower than traditional vaccines, peptide-based vaccines. And presumably, that, therefore, is going to make vaccine development look that much more attractive versus alternatives.
Roger Connor
I certainly think that, on the CapEx exposure, you’re seeing a change from this. Previously, rewind 15 years, the capital investment for an antigen may be considered bespoke. That’s changing and not just changing because of RNA. So you take our two cell platform, which is our platform that’s used for Shingrix and it’s going to be used for our RSV vaccine, the incremental capital per antigen is now smaller because we’ve created that platform. RNA will be similar. RNA truly is a multi-purpose plant. You just change the software and you get a different antigen.
I think there’s a front-end capital expenditure.
Andrew Baum
Your COGS must be lower with an mRNA vaccine then.
Roger Connor
It will over time because certain of the components are still actually quite expensive on that. I think you’ll see that improve over time. I think it is a lowering barrier to entry that the capital is coming down. The capital expenditure associated with the extensive clinical trials, that will remain. That’s not going to shift at one point.
Andrew Baum
And the presence – the fact that you’re using an adjuvant enables you to lower the dose of the vaccine, which, again, presumably helps your COGS to some degree versus a competing approach.
Roger Connor
Correct. It depends on the vaccine in question. But the single biggest cost of goods contributor will typically be the antigen itself. If you can lower that dose through adjuvant, that does help. In Shingrix, for example, the adjuvant is a separate vial as well. It looks almost like two products. So, in our lifecycle for Shingrix, we’re now moving to create a single liquid prefilled syringe and you avoid the reconstitution. That will again bring cost of goods down. So, there is a put and take with adjuvant because if it is a separate presentation, it can add cost. Then over the lifecycle, you can combine them.
Andrew Baum
And it was done separately because of this…
Roger Connor
The fastest way to market would be to typically [indiscernible] and keep the adjuvant separate and then lifecycle manage the asset going forward. That’s the beauty of the vaccines business model. I think that some of these products are more like consumer healthcare products because the barrier is high, the efficacy is incredible. And if you can continue to invest in the actual asset itself, like we’re doing with Shingrix, new indications, new markets, new presentation, you can have something here that lasts for years and years and years.
Andrew Baum
Maybe in the last five, six minutes or so focused on COVID. Obviously, despite a number of attempts, GSK hasn’t made a commercial impact that has been well served by other approaches. I know that you have a multiplicity of strategies in-house. You’ve got your mRNA, you’ve got your…
Roger Connor
[indiscernible] adjuvant.
Andrew Baum
Yeah. And you’ve got via self-amplifying mRNA approach. So, you have the platform, and you had some recent data, albeit with the Wuhan strain, although arguably it’s still active versus what we have right now. How are you thinking about positioning yourself to secure a market which is likely going to remain for many, many years. I know that Xevudy has obviously lost – withdrawn it for the treatment setting, and I think you’ve ceased development in the prophylactic setting. So where are you when you think about COVID?
Roger Connor
Well, maybe give you a commercial perspective and Phil can then come in scientifically. I agree that this is going to be a market that’s going to be around for a number of years to come. What size will it be, you could read a range of outcomes. We have multiple shots on goal. We have mRNA. mRNA is in the clinic, and Phil can expand on that. That’s our primary asset. We’re doing a program with CureVac, but we’re also having an internal program as well.
And our argument partnerships are laid partnerships with Sanofi. We published data looking at the – actually a bivalent beta Wuhan combination, which showed lovely cross protection against Omicron.
We’re late to the party, we know. We’re in discussions with the European regulator currently around that regulatory process as well. So, there’s excitement there because you’ve got this cross protection. And still, we have to see the data on the longevity, what’s the duration of protection that the adjuvanted protein may or may not bring.
We’re being quite cautious. So all of our guidance includes zero on this in terms of how GSK delivers its growth. If it happens, brilliant. But to deliver the growth profile that I described earlier and our ambition for the vaccines business, we’ve included zero in terms of our guidance.
Andrew Baum
And then just on China – and again, if there are any questions in the audience, now’s your time, don’t be shy. So, on China, two questions. Given the historic fraud conviction that you had, the sort of collapse of the business, you now have a unique proposition in China, albeit the market is tempered because of the lockdown. What extent is that helping to rebuild GSK’s credibility reputation in the area? Or is it entirely separate? Because this is primary care outside hospitals, and therefore, it doesn’t have a required halo effect.
And the other question was, I think, on Cervarix where – not a drug that we talk about much, but I think you’ve got approval for two shots, which has some compliance advantages. Is there any hope of getting that monetized again in China even though it obviously covers less serotypes and was just too little too late and Gardasil owns that market and that’s it.
Roger Connor
I think our single biggest growth driver within China will be Shingrix. That is the significant opportunity. I think we’ve got a strong reputation in the country. We’ve got approval on an accelerated basis because China saw the need. And it’s one that we see real opportunity. I mentioned the pricing as equivalent to the US in China in the private market, which is the area in which we expect to expect to operate. It is a challenge, though. It’s going to take us some period of time to build out because of the COVID headwinds that we have. Also, there is no central guidance that you should have a shingles vaccine. So, we’re working on that building disease awareness, building the commercial engine within it to grow this opportunity that we’ve got, but it will take a little bit of time.
We shouldn’t forget, though. As you mentioned, Cervarix continues to grow with some differentiation, but it will not be a Gardasil.
Andrew Baum
No, no. It was just an observation.
Roger Connor
Our hepatitis portfolio is an important portfolio in China, as well. So, vaccines is a very important part of GSK’s overall China ambition, and we have a big ambition. It will take a number of years to get there. It’s very city focused at the moment, but there’s a real opportunity because shingles occurs in China, just like everywhere else.
Andrew Baum
Maybe we’ve got a question here.
Question-and-Answer Session
Q – Unidentified Participant
Hi. So I wanted to hear about the recent spin-off of GSK towards the consumer market, how inside GSK now the dynamics of focusing more on research and all the innovative products has changed due to this? I understand the strategy, but I would love to hear from you.
Roger Connor
I’ll give you a view and Phil should as well. Obviously, we demerged our consumer healthcare business. We’ve been doing that, we’ve been planning for that for a number of years. That happened during the summer.
In terms of fundamental change, not huge, but we have been very clear what our purpose strategy and how we want to evolve as a company. What I would say is, provided now absolute leadership, laser guided focus into the whole space, the biopharma space in which we’re operating, the good news for the leader of the vaccines business is that we are now a bigger part of what GSK is. And I mentioned the capital allocation discussions that are going on. I am certainly seeing – because we brought vaccines, R&D and pharma R&D together, I’m seeing so much more ideation, scientific synergy and appropriate allocation of capital than I’ve seen over the years. I think you look at vaccines, this is the crown jewel in GSK. We believe we have something special here that can grow. We have products that last a very long time and we believe we have the strongest portfolio, strongest global presence and the strongest pipeline in the industry as well.
Andrew Baum
I had one final question. And I’m sorry, Phil, for not allowing you time to answer that. But, look, the share price has clearly been battered [indiscernible] and we as investors can see, observe, comment. But if you’re in the company and if you’re a shareholder, that has to have some ramifications, right? I would imagine if I was employee, and obviously it depends on different levels, what ramifications is it having in terms of motivation or the fact there’s enough excitement over the core business development, the rollout of Shingrix, there’s no risk of action?
Roger Connor
A couple of key points. First of all, a surprise given the level of overreaction, we believe, that happened on the basis of no new data really and the early stage of the litigation. We will defend ourselves vigorously because we believe scientifically – the scientific consensus is that there is no indication of an increased risk of any cancer following taking Zantac. That for us is the key.
Now, entirely to your question, Andrew, this changes nothing. We have our strategy, we have the same level of capital that we’re allocating. We’re allocating in exactly the same way as we have always done. It’s just so important that inside GSK we are continuing to drive. We’ve got the wind in our sails currently in this vaccines business, and we’re going to continue to deliver on that front as well. So nothing has changed from an allocation or a risk or expenditure perspective.
Andrew Baum
So on that note, sadly, we’ll have to stop. I’d like to thank both Roger and Phil for joining us today and thank you for the question. Thanks again.
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