- 2 months ago
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00:00When you look at the time between now and you officially stepping down, what is the top thing on your to-do list?
00:09Well, first of all, if we just step back, you know, it was nine years ago in September that I was asked to take on the great privilege of leading GSK.
00:22And it was nine years ago in December, December 2016, that I first started talking to Luke Miles about joining me on the great adventure of transforming the trajectory of the company.
00:34And, you know, when you decide to leave a job that you love, you hope for two things.
00:42One, that you've put a company in a much stronger position than you found it, and also that you manage to support the smoothest possible transition.
00:53And we've all seen examples of where it doesn't look quite like that.
00:56And, you know, I feel really good to have been able to do both.
01:00It's a very different company in structure and strategy and momentum and prospects, and most importantly, pipeline.
01:06And a lot of that I've built with Luke.
01:08But it really does feel like 26, and it did feel the right time to plan for a transition, because, you know, we did this period and we continue to upgrade our outlooks from 21 to 26.
01:24We're going to over-deliver on that.
01:26And it's 26 when, frankly, I believe the CEO who's going to deliver the decade ahead should be given the time and space to define it.
01:36And it's building blocks and, frankly, deliver and over-deliver on our long-term outlooks, which I'm really confident Luke will do.
01:42So, in that sense, the time is right for GSK.
01:47It's also right for me.
01:48And the most important thing that I can do in the few months ahead is really set him up.
01:55And I know he's going to do an outstanding job with a good team, but to set him up for the strongest possible momentum he can.
02:01And, you know, then after that, I'll stop thinking about what I'm going to do next.
02:07And, you know, zero chance.
02:09Zero chance of any retirement.
02:11But it's all about setting him up now.
02:14Oh, by the way, Anne's getting two more drugs approved by the end of the year.
02:18We've already had three important medicines and vaccines approved.
02:22And I'm hoping for another, you know, really significant multiple myeloma approval.
02:27And then by the end of the year, the world's first six-monthly asthma treatment that reduces the kind of attacks that cause hospitalization by over 70%.
02:34So, not stopping until the last day.
02:37And so, if you look at the horizon for the company, where are you seeing the next big breakthrough, the big drug breakthrough?
02:44Well, honestly, in our industry, which has a lot of commentary and a lot of noise and is very busy and matters in every country in the world,
02:54because it's such a huge allocation of government capital and every individual cares about it, too.
03:00But the only point of it is to innovate.
03:03Remember, we are an industry, one of the few industries that has to reinvent itself every decade because of the IP model.
03:09And it's probably been the most important move that I've made, you know, with the team, which was releasing Halion to set up the balance sheet,
03:19to be able to invest in innovation.
03:20We've doubled the spend on R&D.
03:22And we now have 15 drugs, medicines and vaccines in our pipeline that should be launching.
03:29All material, all with potential peak year sales over £2 billion, should be launching by 2030.
03:34And I think 80, 90% of them in the next three years.
03:38And they are in cancer, in respiratory disease, so whether it's asthma or COPD.
03:46In HIV, we've long been, you know, really leading pioneers in innovation.
03:52We're the first to bring long-acting drugs and solutions, both for prevention and for treatment, to HIV.
04:00And I remember, you know, when I first started work, that was a, you know, a terrible death sentence.
04:05And it's now something we can live with as a chronic disease.
04:07And I hope we will be able to bring a twice a year treatment for HIV.
04:13And then, of course, we continue to be committed to a vaccines business.
04:17You know, a bit of volatility in that market in one country in the world more recently.
04:20But there is no better, this is really serious, there is no better return on investment than stopping disease before it starts.
04:30And we shouldn't have short memories, whether it be about what happened in the pandemic just a few years ago,
04:35or frankly, it wasn't many decades ago when our children were, you know, dying of measles and, you know,
04:42the tremendous burden of polio or whooping cough and these things.
04:45And we're excited about the science that's coming through there, too.
04:47Yeah, I mean, you know, and I also want to ask, as a pharma CEO, but also as a mother of four,
04:54what do you make of some of the rhetoric coming out from the U.S.?
04:57For instance, pregnant women should not take Tylenol, as we know as paracetamol here,
05:02or that there is no need for vaccines, and how are you dealing with that?
05:08Well, I'm not going to comment on the Tylenol business,
05:11but I would say what we seek to do in the U.S. always is engage constructively,
05:17grounded in science, and answer questions with total, you know, transparency.
05:24I think, I mean, you said as a mom of four, you know, I have given birth twice in New York,
05:30once in London and once in Paris, and they all seem to give different recommendations.
05:34And the pediatric experience, I mean, this is the thing that people have to understand,
05:38that health systems are very different in different countries in the world.
05:43And so, you know, history shows that when vaccination rates drop,
05:52diseases tend to surge, and then vaccination rates come back up.
05:56So I think our job is to make sure we partner with governments and, you know, bring facts and science and keep calm.
06:04And, you know, our vaccines is actually the smallest business at GSK, our biggest business.
06:10And frankly, where the majority of our pipeline is coming through is in specialty medicines.
06:16So that's in oncology and respiratory and immunology.
06:20And so that's why, even though it's been a bit bumpy, I would say, and we're a bit cautious in the near term,
06:27we've continually been able to deliver upgrades, whether it's in our annual outlooks or, frankly,
06:31our long-term outlooks, too, because the pipeline keeps progressing.
06:35And you spoke of constructively engaging in the U.S.
06:37Many of your peers are seeing constructive engagement as lowering drug prices
06:43in exchange for a reprieve on tariffs.
06:46We saw Pfizer's announcement yesterday.
06:48Two questions, you know, one, are you considering something similar?
06:52Two, are there any new drugs that you would consider launching in the U.S. and U.K. at the same price?
07:00Well, first of all, you know, there are multidimensional pressures or news flow.
07:10Every day you wake up to some new flow for our industry.
07:13For the reason I said before, which is every government cares about it.
07:15It's a huge allocation of capital.
07:17It's, you know, whether it's the NHS here or what's going on in the U.S., you know, it's always a top topic.
07:24And if you look at yesterday's news specifically, I think that's a step forward.
07:32And it's progress.
07:33And you've seen the markets see that as well, because it's about constructive dialogue between the government and industry.
07:39And make no mistake, the U.S. is by far the biggest priority market for our industry because it's the best country in the world to discover and develop innovation so far, by the way.
07:53There are others that are coming up very fast.
07:56But it's also the best place for some people to be able to access that innovation early.
08:03And it's if we want to lower the cost of health care, we have to continue to encourage innovation.
08:09innovation, but at a cost that is sustainable for payers, affordable for patients when they're paying to a certain degree out of pocket, but also sustainable for us.
08:20Because we have to cover the cost of failure in a pipeline because most things don't work.
08:25And, you know, absolutely, GSK is engaging constructively.
08:30And the state visit just, I can't remember if it was last week or two weeks ago, you know, we were very present.
08:36And I made the announcement of that we were committed to invest $30 billion over the next five years in R&D and advanced manufacturing.
08:47And, you know, we were very confident and committed in betting big on the U.S.
08:54And that includes making it having these kind of constructive dialogues around pricing and access.
09:00I'm not going to get ahead of whatever we're going to do next.
09:04But, you know, I'm confident that and I'm optimistic that the that the industry and government can navigate through this together to make sure.
09:12that we continues to support what matters most, which is bringing down the cost of health care by keeping people out of hospital with innovation.
09:22And the burden of disease and unmet needs is still so huge.
09:26You know, one in two of us will still be fighting cancer.
09:30One in three of us, not most, you know, people don't think about it yet.
09:33But the neurodegeneration is a huge burden.
09:36And so we've got to keep working to incent innovation first.
09:39And I think we saw some balance in that commentary yesterday, too.
09:42And in the U.K., you know, other pharmaceutical companies have been quite vocal about the government not doing enough both on drug pricing.
09:51Yeah, this is important to encourage investment.
09:53What would you like to see the U.K. government do differently, you know, and what would you like to see to ensure that your presence in the U.K. stays the way it is?
10:04Well, let me first be clear.
10:06We are committed to the U.K.
10:08It's our home.
10:10It's our HQ.
10:12It's our listing.
10:13We invest heavily here.
10:14I mean, we invest more than one and a half billion a year in R&D.
10:17We we, you know, invest in manufacturing here.
10:20And there are many things about this country, whether it's some of the best universities in the world, the eternal promise of the data in the NHS.
10:28But we've seen some recent moves on that in terms of translational opportunities and the clinical trials.
10:37And I think that is critical.
10:38But I mean, a bit to your earlier question specifically, which I didn't answer on the pricing.
10:42It is, and I've been really consistent on this, you cannot have life sciences as a leading industry for your country, whether it's here or in Europe, if you don't support a competitive commercial environment, i.e.
11:03If you don't recognize the value of innovation and, you know, that is critical.
11:08Actually, you know, again, I'm a I believe deeply in the value of constructive engagement.
11:16And actually, I think, you know, we're seeing some movements with the government and I think some recognition of the value that our industry can bring.
11:25And I think that's the most crucial thing that we need to get fixed to be able to move ahead together and keep and keep this industry as a leading one for the UK.
11:34But, you know, the UK is two percent of my sales.
11:37The U.S. is 52 percent of my sales.
11:41So it's about getting FDI here.
11:45But, you know, I'm not being distracted by all the listing questions that everyone gets overexcited about, I think.
11:50That's my next question.
11:51Don't scoop me on the question.
11:54OK, I didn't know, but, you know, I perhaps could have anticipated it.
11:58I won't comment for other people.
12:02But there are, you know, there are companies that are well valued here.
12:06And I just think we should focus on what.
12:09But in terms of liquidity, which is a, you know, a perma pain point, it seems, we're seeing how the London market is doing.
12:16Would it be a consideration to do, for instance, what AstraZeneca did or to move your listing to the U.S.?
12:22Because, as you said, the U.S. is such a big focus market.
12:25As I said, we have no plans.
12:27We have an ADR there.
12:29We, you know, it doesn't, our listing location doesn't distract from where we allocate our capital in terms of investments.
12:35And, you know, there's no plans on that.
12:37OK.
12:38The other, while we are on a roll here, you know, the one thing that we are seeing is national governments protecting or trying to protect key industries, you know, sovereignty.
12:50And whether that's in defense or in pharmaceuticals or in tech.
12:55In what scenario would it make sense for GSK to combine with another U.K. pharma company to create a national champion?
13:06Well, you know, GSK has great prospects as we stand today.
13:13It's been fantastic to have this chance to lead the organization through a step change in terms of operational performance and growth and a real shift in terms of our pipeline prospects.
13:25So, you know, I find it a bit hard to imagine all the scenario plans that could possibly be.
13:30But there's zero engagement on that kind of question at the moment.
13:34So a merger with AstraZeneca is not imminently on the card.
13:40OK.
13:41I'm not sure where that came from.
13:42But good.
13:44Well, you know, any time there's a change in leadership, there is always the question about an activist investor or a market.
13:51Oh, well, I've had experience of that and I can tell you that what matters in our industry is what I said in answer to your first question.
13:58You know, the only thing that matters is the pipeline of innovation, because that is what sustains our growth.
14:06And that is the point of the industry.
14:09That's the value we deliver to society.
14:11And it's hard.
14:13It takes a long time.
14:14Fortunately, technology.
14:15And this is the, you know, that's why healthcare is the ultimate use case for everything to do with AI and tech.
14:23And I think it's going to become a more productive industry and the returns will get better over the decade ahead.
14:29But that's what we need to focus on, you know, more than financial engineering.
14:34And don't forget, there's nothing more disruptive to an R&D organisation.
14:38And I've done global mergers.
14:41I know what they take in consumer goods, but in pharma, there is nothing more destructive to an R&D organisation than, you know, aggressive extraction of synergies.
14:50Yeah.
14:51And so, you know.
14:51And it's not like the, you know, scale play is a question for many of us.
14:55And, you know, in that way, and before I get to my final question, do you still stand by your move to spin off Haley and instead of take that 50 billion takeover off?
15:04Of course.
15:05I mean, zero doubt on that.
15:08But when I started, we had a completely locked up balance sheet.
15:14We had declining investment in R&D.
15:16We weren't doing any BD.
15:18And, you know, half the pipeline of the industry comes from outside the core research of the main company.
15:24Yeah.
15:24So that was the moment to unlock the capacity of the company to invest in the reason it exists.
15:30And frankly, that's why we've delivered a step change in growth and a step change in margins over the last, you know, five years since we've been an independent company.
15:39And quite frankly, as someone who grew up in consumer goods, and I led that consumer business inside GSK, I built the two global mergers with Novartis portfolio and then the Pfizer one, I don't think I had a single question at a quarterly result about the consumer business.
15:57And when I took over as CEO, you know, I think a lot of people had that question because of my background about whether I'd want to hold on to it.
16:04It was the opposite.
16:05It's like the consumer business is never going to be given the capital to invest in its own independent growth because the priority had to be the pipeline.
16:13So that's a 100% answer.
16:18And finally, you know, Emma, when you step down, the tally of female CEOs of FTSE 100 companies falls to less than 10%.
16:26When you took over in 2017, did you envisage that this would be the scenario in 2025?
16:33And, you know, this is a place where we're trying to be optimistic.
16:37So what is your message to the future generation of female leaders or just leaders?
16:43Well, first of all, you said, you know, did I envisage this?
16:49I've tried never to define my career by my gender.
16:56And it's always annoyed me a bit when you get the sort of the female CEO tag to everything you do.
17:02But at the same time, I deeply recognize, and maybe more so now.
17:06Less than 10%.
17:07Yeah, I deeply recognize the responsibility we have as role models, and nobody can debate.
17:17It's a serious problem when 10% of our leaders, whether it's in business and industry or in government or in the judiciary or in education,
17:26it's a serious problem when we are not more appropriately represented.
17:33And it's no coincidence that GSK has had a step change in operating performance,
17:40whilst I have moved to a position where 50% of my direct reports are women,
17:46including the CFO, the head of digital and technology, you know, the head of our U.S. business.
17:52Remember I said 52% of the company is a woman.
17:56So, you know, and actually we're up to, it's not just about the top table,
18:00but it's the next generation coming through.
18:02I meet regularly with the top 30 of the company because I believe one of our most important jobs is to drive succession.
18:09And half of them are women, and that's really the generation that's going to come through.
18:13And what do I say?
18:14A, I say, Ruth, go for CEO.
18:16I say, I say to...
18:18Are my bosses in the room?
18:19Yeah, well, why not?
18:20I say to women, have big, brave dreams, and don't let other people talk you out of them.
18:35Ask for help when you need it, work hard, learn from brilliant people who will help you stand up on the difficult days.
18:45And you've got one life, don't waste it.
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