GSK plc
Q4 2011 Earnings Call Transcript

Published: 7 Feb 2012

[Andrew Witty:]

Okay. Good afternoon, everybody, and welcome to the GSK results. Thanks so much for all coming in. Hopefully, there are just about enough seats at the back there. Before I start, let me just introduce to you some of my colleagues from GSK who are here in the room, who may well get asked to answer questions, and if not, they'll be here for you to prey on at your leisure after we finish, in the coffee break afterwards. So we've got Moncef Slaoui, down here at the front, who's Chairman of R&D and also now looks after our whole Vaccine business; Simon Dingemans, who you will be hearing from shortly; David Redfern, who's the Head of our Corporate Strategy Group; Darrell Baker, who's running all of our respiratory development programs in R&D; and Patrick Vallance, who we've just appointed as Head of our Pharma R&D organization. Very good to -- oh, I'm sorry, and Deidre. Deidre, stand up, so everybody can see you. Deidre Connelly, who's head of our U.S. business. So what we want to do today is, I'll give you a little bit of an overview of 1 or 2 key themes that I think is important about the company and, of course, Simon will take you through some of the details of last year in particular, and how we see the business shaping up from a financial structural perspective. Basically, in terms of what I hope you've seen in the press release, and I apologize there’s an awful lot in that press release, but that's a good thing. There's a lot going on in this group, and there's a lot of good momentum building up in the different parts of the organization. What I hope you take away from the press release today, a couple of things

[Simon Dingemans:]

Thanks, Andrew. Well, certainly looking back to a year ago when I had the pleasure of sitting in the front row and not having to present, it seems a long time ago now, but it's given me a great chance over the last 12 months to get out into the company and really meet with a lot of our people and visit with a lot of our businesses around the world. And as I look back on those experiences and those conversations, it's very clear that the opportunities that Andrew and I talked about before I came on board to drive the returns faster and harder out of our strategy, are not only real but there are many more of them. And this is really the reason that we introduced in the middle of last year a new financial architecture to really try and align those opportunities, bring them together and collect the returns that flow from them in a much more coherent way that you're beginning to see in the results of the last year. But it's still very early days, and while the contribution last year was meaningful, particularly at the financial level, I think you're going to see much more of that going forward. So if we turn to the results for the year, very much in line with what we expected at this point in the delivery of the strategy. Underlying top line growth of around 4% and really encouragingly, driven by all 3 of our principal business drivers. So Pharma, up 2%; Consumer, up 5%; and Vaccines, up 11% over the course of the year, building on that global balance that Andrew just described for you. And that's despite a considerable number of challenges during the year, not least from the economic environment, political uncertainty in areas like the Middle East and a number of other pricing pressures that we felt, particularly in Europe, but also in the Emerging Markets, particularly in the second half of the year. And so I think overall, we're very encouraged by the position that we come out of 2011 and looking forward to the momentum that we take into 2012. The biggest factor, however, in the results for last year was the roll-off of GBP 1.8 billion of sales from Pandemic, Avandia and Valtrex products. This is very much as we expected and we've talked about the headwinds that we're seeing during the course of 2011. And those are now very much coming to an end. But as you can see from the results, this very much took the top line down. But it also, given their high-margin and strong cash conversion, also materially affected the margin performance for the company during the year and the cash conversion. But if you look through that and you look at the underlying performance, and I'll come back to the margin and the cash conversion structure underneath that noise, you can see that we're very much on track with the expectations that we gave you at the beginning of the year. And that's really driven by the breadth of drivers that we now have inside the group, and I’ve talked already about the 3 businesses. But if you look geographically as well, you can see with 38% of our sales now outside the U.S. and Europe, we have a much broader range of growth engines across the world, as well as across our businesses. Pick Consumer, up 7%, if you strip away the OTC assets that we're in the process of disposing of. Very much driven outside of the U.S. and Europe. So 14% growth across our Emerging Market businesses in Consumer, driven with good contributions from the Oral Care business with Sensodyne, up 25%, Horlicks, up nearly 20%, showing the balance in that business, and that's against a U.S. business down 1% and a European business down 2%, really reflecting the tougher economic conditions. Very much the same pattern in the Pharma and Vaccines business, with much of the growth being driven through our Emerging Markets business, our Asia Pacific business and Japan as Andrew has just described. Really, all 3 of those contributing very strongly, but in very different ways despite some of the challenges in particularly some of the Emerging Markets, where pricing pressures began to come in during the second half of the year, with price cuts in markets like Turkey and Russia really playing through. Despite that, looking through the Pharma portfolio in Emerging Markets, we delivered consistent growth through the year at around 14%. And Vaccines also being a very strong contributor, up 17% over last year. But Vaccines, as Andrew described, is a much more lumpy business. And so when you look at the fourth quarter for instance, growth rates coming down a little bit, particularly in Emerging Markets, very much driven by the phasing of those vaccine sales, but also by the strong comparator of some earlier tenders in Q4 2010, which flowed into Q1 2011. So again, as you play into the comparisons at the beginning of next year, you'll probably see the same effect coming through. But that's very much sort of looking individually at quarters as opposed to the overall growth contribution that the Vaccines business is making, which is very, very strong. Japan also, an outstanding year, with good introductions on the Pharma side, Avodart making a particular contribution. But the real outstanding marker for Japan was Cervarix, which was up to nearly GBP 350 million of sales, which is a very strong performance on the back of its position as first into the market, which really gave it a leading share of the government inoculation program. And we've got a good pipeline, as Andrew described, in new products and introductions coming into Japan, which we intend to take the same advantage of. So overall, if you stand back from that position, you can see why we feel comfortable that as we go into 2012, the momentum behind the business leaves us in the position that we've anticipated throughout 2011, of being able to convert underlying sales growth into reported sales growth despite some of those challenges. And we're mindful of the risks that there are out in the marketplace. We're anticipating in our plans a number of pricing measures that have already been announced in Europe for instance, and the European business performed very strongly in the face of some very tough challenges last year. But going forward, we're anticipating the environment remains tough and we're continuing to work that. The U.S. for instance, flat overall, as the health care reform measures rolled through the course of 2011. But of course, we go into 2012 with those annualizing and we are always looking ahead to whether there will be new measures here. But so far, none have been identified. But we manage the business against those pressures. And despite those continuing challenges, we feel good about the opportunity to convert that underlying momentum into reported progress in 2012. I think you can see a similar sort of pattern at the margin level, and as I've highlighted, the roll-off of Pandemic, Avandia and Valtrex sales was by far the biggest driver in terms of the overall margin performance. But we also saw some additional pressure during the course of the year from some of the pricing measures that I’ve described, the unrest in the Middle East and some of the phasing of some of our vaccine sales that left the margin a little bit lower than where we had originally expected in terms of the final outturn for 2011. But it's also driven by the investments that we're making behind our growth platforms. And it would have been wrong at this stage in the strategy, when the visibility of the delivery of that strategy is becoming much clearer to pull back on those investments. And take R&D for an example. Here, we're at 14.3% for the year, a little bit ahead of the guidance that we gave you during the course of '11. But you've already heard from Andrew the extent of the pipeline readouts that we've got in front of us and that we're on track with our expected progress in that area. And so to pull back on R&D spending when, in fact, the absolute amount we spent on R&D last year, GBP 3.9 billion, was exactly in line with our plans would have been a mistake from our point of view. And that's really why we came in a little bit lower on the margin, but we think to pull back would have been shortchanging those future prospects. And if you look at the COGS and the SG&A, you see a similar pattern. And here, I've just tried to pull apart the different drivers of the margin during the year. And you can again see Pandemic, Avandia and Valtrex a big driver, but also health care reform and austerity pricing putting quite a lot of pressure on the COGS line. And yet already, you can see some of the operational excellence and restructuring savings beginning to make a real contribution to offset that. Unfortunately, in 2011, those pressures were unbalanced. But you can see some of the momentum building behind here, and being able to allow us to offset the continuing regional and mix drag that we have at the COGS line to be able to build momentum into the operating line going forward. And that's one of the reasons why we've said that we expect to be able to build operating leverage going forward. But it's going to take some time to come through, and it's going to start gradually in 2012 because we're still dealing with a number of pressures on that mix, and we are going to continue to invest behind the growth going forward. But what we've done over the last 6 months is really work with the manufacturing businesses, particularly to take the progress that we've made in the Operational Excellence program, which is really about simplifying the manufacturing footprint that we have and see how we can now align that footprint much more tightly to the 3 main businesses that we have of Vaccines, Pharma and Consumer. But we've got a major project ongoing, which has been working up through the course of 2011 to align the manufacturing businesses and the Consumer business into a single end-to-end chain, much like you would find in any of the major FMCG companies around the world to drive the speed of response, to drive the costs lower and particularly to also drive the cash and the working capital out of that. And that will be playing out during the course of next year in particular, and then into 2013. But that's just one example. And we're already taking some of the lessons of that supply chain engineering across into the Pharma business, which is allowing us to say, okay, where do we want our plant? Where is the capacity? How could we utilize that much more effectively? So we're now, as Andrew highlighted, we're bringing in-house a lot of the things that for the last few years we've had outside with third parties. So not only does that save us their margin, it allows us to procure more efficiently and buy differently rather than just buy from someone else, and also load our plant much more effectively. And what we've been able to identify also in the last few months is areas where we can do that between the businesses. So Aranda, our big respiratory plant in Spain, had some space in one of their plants that was otherwise sitting there in a mothballed way. We are now going to put the production of Panadol into that plant. So it saves us going to an outsourced third party, we're loading our own plant more effectively and we’re driving down the cost of goods in the Consumer business by tens of percent. And that makes us much more competitive in what you know is a competitive market. So you can see some of the things already coming through that are hidden within this green box here, but allowing us to offset the regional and product mix on an ongoing basis. Same thing on the SG&A. Avandia, Pandemic, health care reform, big drivers that are pushing the margin in the wrong direction this year as anticipated. But you can see already the OE savings similarly allowing us to continue to invest, and SG&A is probably the biggest beneficiary of the Operational Excellence program over the last 2 or 3 years, probably about half of the overall cost savings of now GBP 2.2 billion have gone into the SG&A line to allow us to reposition the group from the developed markets into the new growth areas that we described earlier. And that process is now continuing with a whole series of new initiatives. And what we're really trying to do again, as we did with the manufacturing basis, is to align the cost platform that we created through the OE programs and say, right, how do I drive that harder? And how do I then also use it to allow me to look at, not just the sort of fixed costs of the global functions like real estate or like finance, but also how do I use the finance function and the centralization of some of our global services to say, am I really spending my A&P properly? Am I getting the right returns? And already you've got a program running, which we built up during the course of last year to bring some of the Consumer expertise into Europe Pharma, where we're running P&Ls for individual products and thinking about how we launch and how we drive real return out of that, to make sure that the investment we're putting in is, a, fully paid for and covered by the savings but that we are generating the right returns. And it's those kind of initiatives that we're now going to play forward and that will build to contribute to the increasing operating leverage and the growing margin that we anticipate. But they will take time, because each one of them is not a huge project. There's not a big step change going on here. It's a whole series of individual initiatives. And you can see some of them summarized on the slide. So at the COGS level, that simpler manufacturing platform is allowing us to simplify our supply chain, drive costs out, simplify logistics for instance, which are hundreds of millions of pounds in terms of how we think about distributing our product around the world. If you align the plant more closely with where you're actually selling it, you can reduce those significantly, to pick one example. But it also allows us to knock out working capital throughout the chain because we're now looking at it in a much more joined-up way. The IT platforms that we're now rolling out will give us much more visibility around that, and will allow us to compare and contrast between different lessons and getting the businesses to share experiences on the back of that enhanced information. And remember, the rollout we've done in Germany this year is the first of the European platform. But we already have SAP in our manufacturing businesses. And so we are able to sort of join up the commercial operations much more tightly now, and we'll be looking how we can accelerate that and we've already taken the decision to reprioritize the Emerging Market footprint and bring them further forward in the chain, so we can really exploit that opportunity. I think the other areas, just in the consolidation of the global functions, where having created a central capability, we're now looking as we look to how we can expand that to consolidate the provision of those services into a much smaller number of global centers, allowing us much greater efficiency and driving the cost down to another new level. So a whole series of initiatives here. The first phase of which really adds up to the additional GBP 300 million that we've identified during the last part of last year, which are really extensions of the OE program but they will create a platform which will allow further additional programs along the lines of those that I've just described. So overall, that will take the OE benefits up to GBP 2.8 billion. So we found GBP 300 million extra in the middle of last year, so GBP 600 million in total during the course of '11 to contribute to that operating leverage objective. Finance has made a more short-term contribution, and we've still got some areas that we're focused on here. But if you look overall at the financial performance, net debt steady during the course of the year. That really reflects the cash flow generation that we will come back to. The effective funding costs still very much the same as last year and that's not something that I'm particularly pleased with. But remember, we've got quite a lot of refinancing to do during the course of this year. We're looking at opportunities. And again, if we’re too visible to the market as exactly what we're about, then we'll undermine those objectives. But I'm still confident that we can deliver on the 2% reduction in our funding costs that we're targeting over the next couple of years. Where we’ve really made some progress this year is in the tax rate. A number of the measures that we were planning around the objective that I described for you back in the summer have come a little earlier than we anticipated. So that's good news. And that's allowed us to lock in a tax rate of 26.2% for 2011 and hold it for around probably 26%, would be the guidance I'd give you for 2012. So those measures are on a sustainable basis, and we're still very much on track with our original targets to take it to 25%, the year after that. So I think you can already see as we anticipated during last year, that the financial measures will probably make more of a short-term contribution. The operating leverage will take longer to come through. And that's really why when you look at the balance of operating leverage versus financial efficiencies, that we're expecting operating margin to improve gradually in 2012, more in 2013 and more in 2014, but only a few tens of basis points in 2012. The financial contribution will probably be greater next year and we'll look at the overall balance. Because remember, the objective of the architecture is to drive earnings per share and free cash flow, and so we're really looking down the P&L for all the contributions to that. And the share buyback will also make a continuing contribution to the EPS progress during the year. So overall free cash flow, GBP 5.6 billion, excluding legal. And remember, we're expecting that during the course of 2012, that we will reach final agreement on some of the settlements that we announced in November of last year. We don't know exactly when those are going to come. But clearly, the outflows from those legal settlements will need to be factored into your expectations for free cash flow. If you look at the patent during 2011, another good year of conversion. If you strip away some of the legal noise around 2010 as a comparator, we're running at around 105%, 110% conversion against earnings. And I think that's a rate that we feel pretty comfortable is sustainable going forward. And working capital, obviously, a big contribution to that. Another nearly GBP 500 million coming in during the course of the year. Not as much as in 2010. But remember, that benefited significantly from a number of receivables coming in from Pandemic. There's still a very good contribution and we'll come back to the details of that in a second. The other area is just on CapEx, came in at around GBP 1.2 billion, and this includes investments in intangibles, as well as fixed assets. I think going forward into 2012, we have a number of projects underway, which probably mean it steps up a few hundred millions for next year. But probably, that brings it back more in line with where it's been historically. So expect a little pickup in that, but we're obviously continuing to work hard at driving the returns out of that and scrutinizing the program as we work through it. But that's probably the sort of level you should have in mind, and we've already talked about the tax rate that goes into next year. So working capital. I've talked earlier about some of the supply chain initiatives on the manufacturing side. We talked about some of the IT platforms. This is all about information. And what we've generated during the second half of last year is a very specific project to take those pieces and pull them together into a close monitoring of 10 key product pipelines. And that sort of supply chains. And that's allowed us already, particularly in the fourth quarter of last year to drive quite significant inventory savings out of the Pharma side of the business. More work to do still on the Consumer side and particularly on the Vaccines side, which is pulling in the opposite direction given some of the buildup against the big government contracts that we have in the Vaccines business. And I think as you play into 2012, expect us to see more progress on the Pharma side and Vaccines following a little bit behind. So the progress will be steady, but don't again expect big step changes. But we've taken 10 days out during the course of 2010. And remember, in the first half of the year, we were going -- we've contributed about GBP 350 million. So we've reversed that and taken it down 10. And we'll be looking to make further progress. We're also continuing to manage our receivables. We're conscious of our European risks in particular, which we're managing very tightly. But across the world, in Emerging Markets, we have issues which we have to monitor and the whole finance organization is now focused on that. And equally on the procurement side, where I've talked to you a bit about some of the new hires we've made on that side, not only are they making progress in terms of what we buy and the costs we're paying, but they're also managing the way in which we relate to our suppliers much more actively, looking at our payment terms and those tend to only come around once a year. So we saw a good progress on that in the fourth quarter as well, but more that we can do next year. So overall, that's left net debt steady. And I think probably the key message out of that is if you look at the free cash flow of GBP 4.1 billion and the disposals of GBP 1.3 billion, we paid out that and a little bit more in terms of dividends and buybacks during the course of the year, as we reviewed the other opportunities that there were around and from a benchmark returns basis, that seemed to offer the most attractive returns for our shareholders. And so during the course of the year, we increased the buyback from a range of GBP 1.1 billion to GBP 2 billion to the upper end of that and then to GBP 2.2 billion over the course of the whole year. And I think that's very much, as Andrew highlighted, the approach we're taking this year that we're looking at how the returns play out, what other opportunities there might be around. But we start in the same place with a commitment to effectively looking at, prioritizing the dividend and with the free cash flow that we're generating. Otherwise, we'll return it to shareholders or reinvest it through bolt-ons, if they offer a better return. And so, in summary, returns last year, dividend is GBP 3.4 billion, buyback, GBP 2.4 billion (sic) [GBP 2.2 billion]. And remember, the supplemental 5p. We've decided that we want to maintain a balance between dividends and buybacks. And so we're returning the supplemental dividend to return the proceeds from the OTC disposal, to keep that balance. And we'll continue to look at that balance as we go through the course of the year, while maintaining the overall objective of looking on our total free cash flow available and where we generate the best returns. And so overall, in terms of the position that GSK finds itself in today, on the back of 2011, I think we feel very comfortable about the momentum in the business. We've talked about the pipeline and the breadth that, that brings to the mix, as well as the different overall balance within the portfolio and the overall returns that the focus on operating leverage, financial efficiencies and free cash flow is allowing us to deliver in terms of dividends and buybacks. And with that, I'll hand back to Andrew.

[Andrew Witty:]

Great. Thank you very much, Simon. Maybe I could ask Moncef to come up as well, and then we'll open up the floor to Q&A please. So any questions? Andrew?

[Andrew S. Baum:]

It's Andrew Baum from Citi. Three questions, please. Firstly, to Andrew and Deidre, you mentioned the U.S. as being a driver for future growth given what's going on in Europe. Perhaps you could talk to your level of contentment with existing Rx script trends, so the volume trends in the U.S. Because looking at some of your growth drivers in larger drugs, they're either flat or negative. So Lovaza, Tykerb, Veramyst, Advair and Flovent. So what can be done in the context of the reengineering of the organization that's happened to date? Second, in terms of tax rate. Simon, perhaps you could give a comment about the further acceleration of improvements for the tax rate for 2014. In particular, if you'd have a stab at where you think your tax rate is going to be at 2017 given the U.K. patent box. And then finally, on Vaccines, a question for Moncef. Seven vaccines, I think, have been added to the Japanese schedule of late from your competitors. To what extent that gives further opportunities to GSK to get its vaccines incorporated into the pediatric schedule?

[Andrew Witty:]

Okay. Deidre, do you want to go first on the U.S. Rx position?

[Deidre Connelly:]

Thank you, Andrew. We have seen in the U.S. overall in the pharmaceutical market a contraction in terms of value in the general market of about 2%. And we think that is partly due to some of the macroeconomic issues. We've seen the economy impact the visits of patients to physicians’ offices at around 5%. In Respiratory, we're seeing about a 7% loss of patients that are visiting physicians with respiratory problems. So overall, the market has seen a negative impact. But I would point, Andrew, to some of the products that are growing double digits in our portfolio, for example, Votrient, Arzerra, Promacta, Jalyn. That gives us confidence in the current growth of those products and some of the products that we've launched. And also gives us confidence that the products that we are about to launch in the next couple of years will be launched effectively and we will see success with those products as well. So while we're challenged with some of the respiratory issues that we've seen in the marketplace from a macro economic, we're very encouraged with the results that we've seen with our other currently-launched products. Thanks, Andrew.

[Andrew Witty:]

Thanks, Deidre. I think I'd also add to that, that if you look at our bigger products, shares look pretty good. So what's going on really there is majority market dynamic as Deidre’s just said. And actually in most cases, so if you look at Advair, for example. When you start the period with an 80 or 80-plus market -- percent market share, and you get 2 or 3 new entries, you'd expect to see a decline in performance. We really haven't seen the kind of share fall that you would have necessarily predicted and certainly not what you've seen -- and certainly, we've seen a better performance in the U.S. than we saw in Europe even. And even in Europe, we were able to hold on to 70% of that market for 5 or 7 years. So I think overall, the U.S. story, Andrew, is one of there is a, I think, a much greater tenacity than there used to be. And I think that's demonstrated in the robustness of the shares of the bigger products. And as Deidre says, the new products, I think, have all performed very well actually so far. Now the key, of course, is we have to fuel that market with new products. There's actually no point in dreaming that the U.S. is a great place to be with branded generics. It isn't. You need to be there with innovation, and that's been the whole point of trying to bring the R&D portfolio back to the floor. I think the early signals from some of the newer specialized products that I'm encouraged that we can make progress. I would also point out the shift in the customer perception of GSK in the last 12 months has been dramatic in the U.S. So if you look at the way that GSK is now rated by managed markets, customers, by pharmacy, by integrated medical centers, you'll see tremendous improvements. Very often now ranked as the #1 company in terms of the companies they interact with. That's key because that marketplace is very dynamic, customers are changing, the customers who make decisions for products we launch next year are not the same kind of customers who made decisions 5 years ago. And it's critical that we've got the right rapport and the right credibility. And I think that's more than anything, reassures me we're in good shape. Tax rate in 2017, and while you're at it, could you tell us what else you would like to know about 2017? The exchange rate with the yen, maybe?

[Andrew S. Baum:]

Just directionally. I mean, how much potential is the hit? That was the text of the question.

[Simon Dingemans:]

I don't think we want to change our specific targets at this point and you’ve already seen we've made some early progress towards those, and we'll benefit from those during the course of the next year, ahead of time. I think the patent box was always something that was for the future, beyond the targets we gave you. How much of a benefit we'll reap from that, depends on how quickly we can, a, bring product back into the U.K., what we're doing with the pipeline, how R&D in particular plays out. A whole host of factors that make it very difficult to predict. But clearly, we're targeting that 25% is the first target and we'll work better thereafter.

[Andrew S. Baum:]

And Japan?

[Moncef Slaoui:]

And so on Japan, I think, we've had a strategy that we started implementing already a few years ago, based on 2 approaches. One is to implement some -- introduce some of our most innovative vaccines into the Japanese market. And I think the experience with Cervarix this year has been quite compelling and Rotarix is the next one to follow on. The second approach is one that relies on local partnership. And for instance, we have a partnership around the development of a cell-based flu vaccine locally and there is potentially more to come. But we're definitely going significantly after that opportunity.

[Andrew Witty:]

And I think if you look at the performance of Cervarix in particular and you look at which company really has worked hard, particularly on not just getting listing of vaccines, but listing of vaccines which are reimbursed at a substantial level, as you know, there's really only been 3 or 4 modern vaccines fully reimbursed in Japan. You can see that GSK has been a very successful participant in all of that. Mark? Do you just want to wait for the mic, just so folks can hear you.

[Mark Beards:]

It's Mark Beards from Goldman Sachs. One on margins, which I think came as a little bit of a surprise to the markets this morning on how -- what a small amount of margin expansion we're expecting to see this year. What are the headwinds that are stopping you from expanding to the level that we were expecting in 2012? And then secondly, you mentioned Europe, what's happening in Europe in terms of innovation not being paid for. What knock-on effects might that have to the commercial organization in that part of the world?

[Andrew Witty:]

Okay. Let me answer the second question first, and then Simon can talk to the margin, although that really is about the definition of the word gradual. But we will come to that in a minute. In terms of Europe, what we're seeing in Europe is really 2 general phenomena, although of course within Europe, there are many differences. So the 2 -- you've got price cutting going on. What you also have is in, particularly, in Germany, in the U.K., 1 or 2 other markets, relatively big markets, sustained patterns of very extensive delays to new product availability or a pricing regime which makes new product introduction not that obvious, I'll put it that way. So, for example, in Germany, proposals where you can launch but a year after you launch, you can have your price reassessed and potentially cut, which will be right when you're in the middle of negotiating prices in the other 27 member states. Is that really where you want to be? U.K., I think, you can read every day of the week of a drug not being approved in the U.K. Sooner or later, when you get to a point where we've gone through so much to try and get drugs approved, we've taken -- we've proposed risk-sharing deals, we proposed very significant discounts, and we still can't get through. Eventually, you just say, well, actually you know what, we'll focus somewhere else. It's not that we won't develop drugs for Europe. It's simply a case of the priority of where we're really going to drive what should the comparator be, where might we do the trials. It's going to be driven from the markets that we think are most likely to welcome the product. It's not that different to any other industry. And I think we just have to move on and recognize that at least for the next few years, Europe through all sorts of obvious macroeconomic pressures, is kind of stuck in a bad place. What it means for our European business? Not too much. We have halved the size of our European operation’s physical headcount, more or less in the last 4 years. So I think we're probably more or less at a state that's kind of fit for what I'm describing to you. And we'll still register drugs in Europe. We're just not going to necessarily design them for Europe in a way that we would have historically done. And obviously, that can change if the view of innovation in Europe changes. But at the moment, there's an increasing, not a decreasing gulf between the way European payers are behaving and the way American and Japanese, who are not pushovers by any stretch, but just have a more pro-innovation instinct to start with. And I think that's obviously a place where we would rather focus. On the margin?

[Simon Dingemans:]

On the margin, look, I think the important point is that nothing has changed in our expectations of what progress we're going to make in 2012. And we've always said gradual, and what we're trying to do is put a bit of definition around that given that people were struggling with that. And the reality is, when you look at, as I described in 2011, what we're dealing with is balancing the investment behind the growth drivers with the cost savings and the efficiency gains that we're making. And those are providing the resources to be able to allow us to invest to drive the growth at the top line that you're seeing. And the balance of that is going to change as the pipeline comes through, and as the growth comes through from those investments over the next 2 or 3 years. And to pull back at this point when the strategy’s just at the point of really rebalancing the group, the R&D position is really beginning to come through, just seems to us the wrong thing to do. And that balance therefore, is going to be relatively tight in '12. We'll have more room in '13 and more room in '14. And so it's a sort of 2- to 3-year progression that we're talking about here. But it is going to be a few tens of basis points next year reflecting that balance.

[Andrew Witty:]

I think if -- as well, let me just add a kind of slightly more philosophical view. I mean, ultimately, pounds pay the shareholder, not percentages. And while -- we are, don't get me wrong, we're very focused on delivering. If we say to you, we want to deliver an expanded margin, we want to deliver an expanded margin, then that's what we're going to do. If opportunities come along, which allow us to create very substantial amounts of value for the shareholder but for some reason might dilute the margin a little bit, imagine tomorrow morning, Emma Walmsley rang me up and said, I've just discovered an organic growth opportunity for Consumer, which adds GBP 300 million of profit to the group but at the Consumer margin, obviously, that would be dilutive. Should I say yes or no just to protect the margin? I should say go for it, because it's creating more wealth for the shareholder. And I think we just -- so I just want to make very clear, we're giving you our best estimate of where we think this will go. It's absolutely where our plans take us. But ultimately, we're in the business of generating maximum economic return for our shareholders, not some theoretical percentage margin structure. And at some moments, that might lead us to say, actually this opportunity came along or this organic investment came along and it leads us to a slightly different place. And I think it's just fair to share with you that I have a slight -- I don't have quite that religious kind of obsession with the percentage. I'm much more focused on how do we drive profitable growth for the group and maximize cash for the shareholder and maximize returns for the shareholder. Graham?

[Graham Parry:]

It's Graham Parry from Bank of America Merrill Lynch. Just wondering on the buyback expectation for this year. Is there a scenario where you'd see your free cash available for dividends and buybacks exceeding essentially what you're pointing to here, so i.e., have you left anything in the pot there for bolt-on acquisitions and if they don't happen could you actually see yourselves exceeding the top end of that GBP 1 billion to GBP 2 billion, which you'd already set out as a long-term sustainable target? And then a question on the 719 dose ranging data, which you said is supportive of the current dosing in Phase III. Can you confirm whether that means that they still show that doses below 62.5 micrograms are not active, or are you actually seeing any kind of activity below that level? And then thirdly, on Promacta, are you still moving towards filing on Promacta despite the disappointing ENABLE 2 data? I know you're looking to cut that data in other ways. Have you done that now and has that given you any greater confidence in filing?

[Andrew Witty:]

So can I ask Darrell, do you want to answer the 719 question first?

[Darrell Baker:]

We have completed as you know the lower dose study with the 719. The aim of that study was to help us fill out and understand the whole dose response curve, so that we'd know where we are with the doses that we've chosen for Phase III on that dose response curve. And I'm not in a position to reveal any details around the data, but the data have given us greater confidence that those doses which we've chosen look like optimal doses for us to be in Phase III.

[Andrew Witty:]

And Promacta, Moncef?

[Moncef Slaoui:]

So regarding Promacta, as you know there is 2 ENABLE trials, 1 and 2. And observations were contrasted between the 2 studies and our overall assessment of the population on the 2 studies led us to conclude that the benefit risk intervention in chronic hepatitis C patients was positive and therefore, we will file and I'm sure, the observations made will be subjects of discussions during the review period. But we're confident to file and we are confident this is a beneficial medicine for patients.

[Andrew Witty:]

And, Simon, if we didn't do any bolt-ons, would we have more to buy back shares?

[Simon Dingemans:]

Well, I think as we said in the presentation, our approach to the range we've given you is very much the same as last year, in that we'll see how we progress during the year with other alternative investments that may come along. And also how we generate cash and what our performance is on that front and put them together during the course of 2011, we came in better than we expected on the cash side. And we also didn't see really the opportunity on the M&A side, we then upped the buyback as a result. So I think -- I don't think we can give you any specific target today, but that's very much the philosophy that we go into 2012 with.

[Andrew Witty:]

I mean, no question, if we didn't do any bolt-ons at all then there would be more -- if all else was equal, if the plan delivered what we expect it to deliver, then there'd be more capacity to do more if that's what we wanted to do. Yes, go ahead.

[Florent Cespedes:]

Florent Cespedes, Exane BNP Paribas. Three quick questions. First on the 2012 guidance, on the top line, given the soft Q4, how do you see the growth of the top line for 2012, and what are the mainstream factors? And given the operating leverage, is it fair to assume a mid- to high-single digit core EPS growth for 2012? That's my first question. Second one, on pricing environment. Could you give us...

[Andrew Witty:]

That was 2 questions already, right?

[Florent Cespedes:]

The first was on the guidance. Now on the energy market and pricing environment, could you give us your view on the pricing environment on Emerging Markets and also, a quick update on your low pricing policy you announced last year on some of your products. And maybe last one if I may regarding the R&D for Moncef. Will you announce an Analyst Meeting with a review of the late stage pipeline sometime in the year as you anticipate the peer date shortly?

[Andrew Witty:]

Okay. As far as -- we're not -- we're obviously not giving any specific sales guidance this year. We're certainly confirming that we expect to be able to report sales growth. We've shown you what our averages have been over the last couple of years. During that period, we've had 2 or 3 quarters which have bounced above the average, so Q3 of last year was plus 6, Q4 was plus 1. So you've got -- you can see just in those last 2 quarters the kind of volatility that we'll see. And I would expect to -- I would guide you that we'll continue to see volatility. And I really would guide you not to get too worked up about quarters. Having said that, I think that if you look at the Emerging Markets over the last 6 months, we've seen more price pressure, particularly in the government-controlled Emerging Markets. So the Russias, the Turkeys. So there's been more of that kind of pressure. We've seen extraordinary volume growth, which has been suppressed a bit from what you're seeing, both by the government price pressure in Turkey and Russia, but also by some of our own voluntary price cuts to drive a lower price opportunity, which will wash through because most of those price cuts were taken in the early part of last year and once we get out of the early part of this year, we should start to see more of the underlying volume shine through from that piece of the strategy. Overall, we're seeing the EMs click down a couple of notches. So whereas, if we'd been stood here a year ago, we'd have been talking about the Emerging Market market growing 14%, 15%, you're probably now at 11%, 12% in terms of where IMS is currently estimating. And that's due to all sorts of things. If you look at our specific business, partly pricing that I just touched on, a lot to do with vaccine phasing, which is not really something to worry about, unless you get worked up about quarters. Partly anti-infectives, we have a big anti-infective business and the overall anti-infective world market has been very flat for the last 12 months. Very little disease, good news in that part of the world, but that's been a major issue for us. Those have been -- and then the Middle East has been the sort of specific issues for us. Now as we go forward this year, what's going to drive our EM business up or down, well, the phasing should wash itself out. So I don't think we should worry too much about that. The Middle East, again, we have to just wait and see how quickly it restabilizes and what the kind of bounce back might look like there. Our voluntary pricing washes out, and we should see the volumes kick back in. And then it's really a question of are there going to be other government interventions or not. And we have to wait and see what comes from there. As far as the -- and that's your job to figure out what the EPS number is going to be. Obviously, we're doing everything we can to make it as big as possible. So I'll let you -- I'm sure we'll speculate -- you'll speculate all year. We'll keep missing each other. They'll keep being definitions of the word gradual and eventually, we will get to the same number. But we'll just go through the year the normal way on that front. As far as low pricing policies, I mentioned already, it's kind of -- it will wash through. It's been -- what we've seen in the EMs is a very strong volume pickup as we’ve dropped down the price curve. When we originally started this, we thought this would be something like a 3-year payback. But it's more like a one-year. So you kind of recover your position about one year after making the price reduction, which gives you some sense of the kind of pace of what's going on there. What we're also seeing is quite a good click in the innovative higher-priced products as well. So which is, if you look at some of the -- if you strip back the anti-infective, you strip back the Middle East and you strip back vaccine phasing, those underlying core volumes look very nice in most of the Emerging Markets. As far as R&D is concerned, we confirmed that we're going to have an update or a discussion on the DPUs to give you all a chance to dive a little bit more into that, and we'll update you in probably Q1 when we're going to do the full development pipeline. But we're not very far away from doing that. So you've not got too long to wait for that. But we want to do it where we've got as much data as possible, because there's no point having that session if we know big data is due in one way or the other. Much better to have the picture so that we can actually show it all to you, particularly on the Relovairs, the Zephyrs, the albiglutides, the 572 programs, the rare disease programs. We've got an awful lot of data coming in during the year, and I think that discussion will be a heck of a lot more useful to you if we do it with the data than theoretically. And we'll be able to update you on exactly when we'll schedule that at the Q1 results. Okay. Yes, please, over on that side.

[James D. Gordon:]

James Gordon from JPMorgan. One question, which is the GBP 300 million of operational excellence. Will we see any benefit from that this year? And if we will see some benefit from that this year, if that's incremental, is there a reason where -- is there something that offsets that, that means we don't see more operating margin improvement this year, thanks to that GBP 300 million saving? And then just the other question was also, where would CapEx go for the next few years? What should we think about?

[Andrew Witty:]

Simon?

[Simon Dingemans:]

Okay. We will see some of that GBP 300 million in 2012, and the phasing will ramp up over the next 2 to 3 years. So we'll see probably a 1/4 to 1/3 of it this year. But it will go into the overall aggregate OE benefits, which are ramping up to GBP 2.8 billion by the end of that period. So I think it is very much built into the mix of margin improvement and comes back to the same point of it’s paying for some of the investment that's driving the top line progress that we expect to make. So I don't think you should add anything extra into that. I think it's more about reassurance that there's some momentum behind gradual this year, more in the couple of years thereafter.

[James D. Gordon:]

So nothing's actually got worse that's offsetting it. Meaning, you still get to the same level of margin expansion, even though you’ve got the incremental savings?

[Simon Dingemans:]

Well, I think, as I say, there's a relatively small amount in 2012. Most of this will come through in the couple of years behind it. But what we've been able to do is look at the original OE program and the process of restructuring sort of unearths the next opportunities, so particularly in the manufacturing businesses, where we're simplifying the production lines and Consumer will be a good case in point, where the sort of end-to-end supply chain that I talked about has really identified a series of initiatives that are a reasonable chunk of these extra GBP 300 million that will come into that business over the next 2 or 3 years but relatively small in 2012. So it's not that something else has happened and we're offsetting it. It's about building some confidence and specificity around what happens over the next 3 years rather than just one year.

[Andrew Witty:]

And CapEx?

[Simon Dingemans:]

On CapEx, I think for 2012, as I say, probably something in the order of GBP 1.5 billion. And that's in line with our historic norms. It's been down a little bit over the last couple of years. We're obviously continuing to see where we can take savings out of that. But I think you have to be careful, particularly when we're growing the business and we're bringing in a big new range of products on the Consumer side and on the Pharma side, that we will have to put some investment behind the manufacturing capacity for that. And so that's why I say, it’ll probably step up a little bit. But that's probably the sort of guidance level you should have in mind.

[Andrew Witty:]

Yes, Jo, over in the far right.

[Jo Walton:]

Jo Walton, Crédit Suisse. Three questions, the standard today. First one, to go back to margins, I'm afraid. Second one on R&D and one product-related. So on margins, perhaps tackling it a different way, you've talked about 0.4% of sales adverse mix effect from product and regions last year. Is that a reasonable ongoing rate? As you move forward, you get more partnered product coming in, you're also getting more growth from Emerging Markets. So whilst we can all look at the good things of Operational Excellence, is that a reasonable sort of headwind? And in the SG&A, you talked about 0.8% of sales in the investment. Where is the incremental investment coming? Are you going to see, I'm not saying this is bad, but are we going to see more of this in Emerging Markets, perhaps Japan? You talked about that as being a real opportunity. Is there more footprint to go in there? My product-related question was on Advair in Emerging Markets. It grew strongly in 2010. Underlying, it showed no growth at all across 2011. Is there something that we should know about there? Is it disease pressure or whatever? And the final question on R&D, you talked about an improvement in your R&D productivity. When you're looking at an average Phase II, Phase III product going forward, you're trying to value that, have you reduced your sort of life cycle expectation for that? Because it's just never going to be as big, never going to get where you're going to get to in Europe. Is that an actual factor or do you now say, well, it's not going to be as big in Europe, but I can now factor in a better Emerging Market life cycle? So overall, the return for an average asset is the same.

[Andrew Witty:]

Okay. On Advair Emerging Markets, almost all to do with pricing, Jo. So volumes look fine. But pricing, particularly in Russia and Turkey were very focused on Seretide. And actually, the same is true a bit in Europe. So Europe was very skewed by pricing. Seretide is very skewed by pricing in Germany, on Seretide. So it was just 2 or 3 examples where you've got very specific, quite deep price hits in 1 or 2 markets, just knocks all the growth out of the system. But nothing, I wouldn't worry too much about volumes. As you know in many Emerging Markets, we've already got generics in most of those countries. So in terms of the kind of the going-forward dynamic is very much the same dynamic we've had in the past. The issue is government price cuts, when they pop up and they can -- if you look across the whole of EMs, about 60% of our EM business is cash, about 40% is government-controlled. So it’s when the government-controlled element gets hit, that's when you've seen that kind of effect play through. In terms of the margin headwinds, I think there's no doubt that the partner products obviously reduce the margin going forward. So obviously, how we're going to pay for the R&D that was done on our behalf or the risk that was taken on our behalf. And the way -- I think it's very well worth being thoughtful that the kind of savings that you can particularly drive out of manufacturing are going to be needed to at least stand still against that pressure. There's no doubt about that at all. There's a clear, I'd say, clear CGS hit that's going to come in as the portfolio mix changes. And that's the one I'd say you really just have to keep an eye on. Now whether we can drive more savings than that elsewhere, I think, is really the question. So the way I'd look at it is, can manufacturing keep driving off enough savings to neutralize some of that impact. The second part, around the SG&A. I would say for EMs over the next year or 2 -- we've had a very big expansion in EMs over the last 4 years, and we're quite keen over the next year or 2 to have a period of pause in terms of expansion to make sure we've got everything running as efficiently as possible, and get the maximum leverage out of what we've got rather than just have grow, grow, grow constantly. I'm quite a believer in, if you expand something very significantly, you need to take a breather at some moment to really take the value out of that opportunity. So I think you should anticipate a slower ramp of investment in the Emerging Markets. It won't be 0 because there's always going to be a country that you need to increase position in. But it won't be at the same clip that it's been in the last few years. The last thing I'd say on margin is just to state the obvious, a huge amount of what drives these margins is the growth rate in America and in Japan, which we're fixating on the things at one end of the equation. You’ve got to look at the other end. The last 4 or 5 years, the U.S. has been in free fall, and we've been losing nothing but 98% gross margin products. What you've seen is the U.S. has stabilized, begun to now move back into growth, look for growth going forward. Obviously, pipeline, if it comes as we hope it will, gives the opportunity to really drive that growth and bring back margin to the group from the U.S. side. So I think it's important to look at what we've been able to achieve, not just with all the headwinds we keep talking about, but the one we don't talk about anymore, which is the big U.S. headwind, which has been by far and away the biggest margin diluter of everything that's gone on in the group. So worthwhile just contrasting how tough has it been for the last 4 years versus what does it look like for the next few. And while it's not absent headwinds, the really big headwind has at least stopped blowing, and we're hoping to turn it into a tailwind. And I think it's worth reflecting on that. And that's why we're confident over the next several years, we can get some pretty good operational leverage, very gradual to start with but picking up next year and the year after as we start to see that dynamic come to play. In terms of R&D, we absolutely forecast realistically what we believe the assets are going to do. So we do, do a specific European assessment of what we think the value of the asset could be. So whether we think it's going to be a low price with access, or whether we think there's going to be no access at all. That does go into the models. And we do also forecast for the EMs as well. It just varies by asset, Jo. So there are some assets which are very dominated by the EMs, particularly if we think it's going to be a China opportunity. You can see very significant leverage, if you will, from the EM in that whole analysis. But it just varies asset by asset. But we do, do it, area of the world by it. So we're not just -- we're not still plugging in 1980s numbers for Europe. We plug in very, maybe even overly conservative, I'm not sure, but we do plug in very Europe-informed numbers into those analyses.

[Mark Purcell:]

Mark Purcell from Barclays Capital. Three questions as well. The first one is on albiglutide. I just wondered if you could help us understand the clinical proposition that the products provides. You've obviously got 2 new trials in-house that you've got and we haven't got. The lack of CNS penetration, I guess, is causing the lack of weight loss. Just trying to understand that product in the context of its competitors and what this means for investment in diabetes as a franchise going forward. Secondly, of the Emerging Markets opportunity, where you're looking to build further critical mass. Obviously, you talked about some of the reforms in places like Russia and Turkey, whether these are providing any opportunities for you to invest and put your product portfolio through. And then lastly, going back to the top line, moving from underlying sales growth of 4% to a top line figure. Obviously, as you say in the press release, we have to take out any OTC disposals. What should we be taking out for Cervarix out of the GBP 350 million that was booked in 2011? And should it be about GBP 300 million to GBP 400 million based on your comments on EU pricing coming out for 2012 as well?

[Andrew Witty:]

Sorry. I just didn't quite follow the logic of the last question. Can you just repeat that?

[Mark Purcell:]

Yes, sure. So 4% underlying growth in 2011. So I guess you start with the same roughly give or take a few percentage points in '12. So obviously, we'd have to take up to GBP 500 million worth of OTC disposals. I presume GBP 250 million or so of Cervarix in Japan, given that the tenders were biased to 2011. And then also, the European reform measures you just mentioned about minus GBP 0.05 negative pricing environment in Europe in 2012 relative to 2011. So just trying to understand the headwinds that you face relative to that underlying sales growth.

[Andrew Witty:]

Well, so just to be clear, when we've always talked about underlying, all underlying has ever stripped out has been Avandia, Pandemic and Valtrex. So everything else, so the puts and takes of tenders, wins and losses, the puts and takes of pricing are all in what we call underlying. So it's up to you what you back out and by all means, do whatever you need to do. All we're simply guiding you is, don't forget, if we dispose of a business, we obviously can't grow it anymore. So that has to be adjusted. We're not looking for any other special kind of treatment or exemption and we're going to -- our goal, my view is that when you look backwards into a year, you have a bunch of one-off good things, you have a bunch of one-off bad things. Your job is to try and turn the one-off good things into repeatable good things, and find a few more and your job is to try and minimize some of the bad things and make them stop happening again. And that's just our job to have to deal with. So I don't know if that helps. But I don't think you need to get too stuck there. Russia, Turkey. Yes, there are opportunities in there. I mean, what I think you see in -- Turkey is probably a better example than Russia. What you tend to see in these markets is very strong go-go growth for 3 or 4 years and then a very sharp price correction. And it takes you a year and a half to recover and then you get 2 or 3 years of really net growth in the system. And we've seen that in a whole variety of countries, where you've got that strong demographic push going on underneath the surface. Turkey is a brilliant example of that. Russia's a bit atypical because Russia doesn't have the demographic dynamic that Turkey does. And so Russia's unusual and a bit of a case of its own. But as a general rule, historically, every time we've seen these big adjustments, we quite often see some companies withdraw. That quite often leaves space for us to do better over the subsequent 3 years and obviously we try and do that. Albiglutide, maybe, Patrick, do you want to talk to that?

[Patrick Vallance:]

Yes. So as you've said, I mean, you've seen some of the data and there's more data coming in and there's more data yet to come. So where we are with this is it’s a product that didn't meet the once-a-day efficacy in the first bit. But actually, very well tolerated. We expect that efficacy to continue. We're very optimistic actually that this is a nice product with a very good tolerability profile that will have a good place in the market. So we're confident of that, with data still to come, of course.

[Andrew Witty:]

And we are going to drive you a bit crazy, I think. Because we, for various reasons, very often because we're partnered on the drugs, we have to announce the initial data for obvious reasons because it's very important to the partner. But in very many cases and in fact, in particular in this case, there may be very good reasons why we don't want to get into too much more detail, in this particular case because trials are still ongoing. And therefore, there are all sorts of regulatory implications. So we need to be -- so there might well be, and this is one, Relovair will be another. There may very well be times during this year, where we give you a sense of the data and it may be that the initial data we give you is not that overwhelming. It may well be that over time, we get more studies because the subsequent studies are looking at, let's say, more interesting subpopulations or particular niches or particular points of differentiation. Or in the case of Relovair, in terms of core differentiation from existing products. And there may be periods where all you've seen is that initial report and we're starting to see slightly more data, but it's just not ready to announce. And I'm afraid, we're just going to -- you need to be patient with us as we kind of assemble the full portfolio. What we don't want to do, particularly where we've got 10, 15 studies, is if we come out Monday with a study that's ho-hum, Tuesday with a great one, Wednesday, ho-hum, Thursday -- we’ve got to -- somehow, we have to get to a sensible holistic picture of the molecules. Certainly, our view on albiglutide and Relovair is that they both look very, very promising. And we'll see when the full data comes in before we can really articulate the full picture to you. And since you've all been taking 3 questions each, I’ve only got time for one more. So who's got a question? Yes, please.

[Sam Fazeli:]

Last question. This is Sam Fazeli from Bloomberg Industries. If I may, I have 2 questions to ask you. One is, with regards to China and Japan. In terms of the expectations for 2012, what level of impact are you expecting to see from the biannual price cuts in Japan and also the provincial bidding that's going on in China? I'm assuming that although you haven't given a specific guidance for 2012 Japan, China growth, that you're expecting volume to overcome all of that, and potentially in Japan from new product launches. And the other question was with regards to strategy versus possible generics, if you want to call them that for Advair. We've seen another company recently with massive genericization be very prepared for that over the year before the patent expiry and have shown some success in controlling the volume of the brand. And I'm referring to Lipitor, obviously. And given that you don't have that luxury because the patent and the combination's gone and maybe anybody coming with the device would not necessarily be going up against the Discus patents in your network, what strategies are left to you for potentially protecting Advair, if it just comes out of the blue?

[Andrew Witty:]

So as far as China and Japan are concerned, and clearly, the process of the biannual price reduction’s underway at the moment. As you also know, there's been a very significant reform in the Japanese pricing system, particularly for the innovative products, and GSK is one of the leading beneficiaries of that, given the number of products we've introduced into Japan. So we don't know what our particular pricing impact is going to be. We have to wait and see. But I think what you can certainly see over the last 3 years is that, a, we've had extraordinary strong volume growth every year and in the previous year where we had price reductions, so 2 years ago, we were still able to grow the business. So the volume was sufficiently large to be able to grow the business. And again, a little bit dissimilar in China. We've got -- China, for us, is really obviously 3 businesses. But if you just focus on Rx and Vaccine, last year was a very difficult year for us in China for Vaccines because of the Chinese Pharma co-peer issue, which meant that we had to essentially stop selling a number of our vaccines alongside several of our competitors. That's one of the one-off bad pieces of news that happens some years, and you don't want to happen every year. But the Rx business has been extremely robust, double-digit -- very strong double-digit sales growth, and we continue to manage regularly price events in China. The fact that there's a provincial review, there was a different kind of price intervention last year. Every year, there's some kind of price intervention. You have to manage it and again, the volumes are very strong in those markets. As far as Advair is concerned, the fundamental issue, there just isn't any -- in the U.S., there is no visibility of any potential generic in the marketplace or on the horizon and no potential for branded generic either at least in the foreseeable planning horizon. So I think rather than get into what we might or might do in a completely theoretical world, what we've seen over the last several years is all of the putative generics or branded generics essentially pull back. It doesn't mean to say there'll never be one, but it's certainly clear there isn't going to be one in the next few years. That's very important for us because it gives us a platform of confidence around that business on which to build the portfolio of up to 8 new products that I've already described today. And so it's probably the best I can say on that. With that, listen, thanks very much for your time this afternoon. We're going to -- if you want to stay for a cup of coffee or want to chat to any of the GSK executives who are here, we'll be over just across the hall and be delighted to have a cup of coffee with you. Thanks very much.