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Abbas Hussain
President, Emerging Markets

13th May 2010
B k off A
Merrill Lynch


GSK 1Q 2010 Turnover £7.4bn +13%
(£6.6bn +4% excluding pandemic sales)

GSK 1Q 2010
+13% Turnover Rest of Consumer
£0.2bn £1.2bn
+45% -1%
+16% EPS g
growth Asia Pac/
Japan Pharma US
£0.89bn Pharma

Markets Pharma
43% Pharma ViiV
£1.9bn £0.4bn

CER growth rates; Business performance
Beginning in 2010, Stiefel sales allocated to regions and all ViiV Healthcare sales shown separately .

turnover was £713m (+17%) .000 sales reps CIS China MENA India Mexico SSA Latin America Emerging Markets 1Q10 £866m (+43%)* (+43%) = 12% of GSK Group Turnover 3 Source: GSK 1Q10 reported turnover including pandemic. GSK “Emerging Markets” business 85 countries >12. Excluding pandemic.

GSK’s pharma presence in Emerging Markets Eastern & CIS Central Europe China MENA India Mexico SSA Asia Pac Latin (excl Japan. NZ).1bn (+19%) . Aus. Eastern and Central Europe Australia NZ) = £1.3bn (+40%) 1Q10 4 Source: GSK 1Q10 reported turnover including pandemic. Japan Australia. NZ) America + Asia Pac (excl Japan. turnover was £1. Excluding pandemic.

GSK’s total presence in Emerging Markets Rx Cx + £1. total turnover was £1.4bn 1Q10 ((+40%) 0%) ((+13%) 13%) £1.7bn £1 7bn (+32%) 1Q10 24% of GSK Group Turnover 5 Source: GSK 1Q10 reported turnover including pandemic.3bn 1Q10 £0. Excluding pandemic.6m (+17%) .

0bn (+20%) By region Top markets (+24%) 500 SSA 450 MENA £204m 400 China* (+16%) 350 (+10%) £461m 6%) £983m 300 (+6%) (+6 £m (+36%) (+28%) 250 (+56%) +22%) £231m 200 CIS 150 (+ £271m 100 £214m 50 South Mexico £604m Asia 0 Turkey Mexico Brazil China* Saudi Arabia Russia Pakistan Egypt India Latina GSK ranking # 11 5 3 13 7 1 16 1 1 *China includes HK 6 Source: Turnover and growth is GSK 2009 as reported. Rankings are IMS MAT Dec 09 . Growth rates are CER. GSK Emerging Markets 2009 turnover 2009 £3.

and therefore undervalues sales in EM. 7 Note: IMS audits currently do not capture all activities e. . History of EM sales growth 25% GSK is catching up with EM market growth 20% 20% 15% 10% EM (IMS data) 5% GSK (IMS data) GSK (reported) ( t d) 0% 2003 2004 2005 2006 2007 2008 2009 Source: IMS data (Dec MAT) and GSK reported.g. particularly for GSK. vaccines.

Emerging market characteristics Large markets Pay out of pocket Need eed for o greater g eate access Smaller S a e p products oducts Untapped potential Longevity of brands Evolving healthcare F Fast growing i programmes 8 .

2. 3 Pharmerging Markets Incremental Growth 2009-2013 China +$40bn Growth +$5-15bn $ Russia Brazil GDP PPP Growth India +$1-5bn Turkey Pakistan Egypt Growth Ukraine Venezuela S. Growth in ‘Pharmerging Markets’ IMS Tier 1. Africa Mexico Argentina Thailand Vietnam Indonesia 9 .

E: Unemployed. manual workers with responsibility for others) D/E: Cannot afford prescription medicines – have major difficulties to afford medication of any kind (D: Semi-skilled and unskilled manual workers. owners of small businesses) C+: Have some problems paying for Rx medicines – can usually afford some moderately priced brands or generics but run into cost difficulties if repeat medication is prescribed (Junior managers. B Middle managers in large organisations. Need for greater access Brazil India S. Africa Egypt Total population 180m 1. those dependent on the state) . owners of small establishments and all others in non-manual positions) C-: Have major problems paying for prescription medicines – can only afford the least expensive medications and only shorter courses of treatment (Skilled manual workers. casual workers without regular 10 income. top civil servants.2bn 49m 82m A B 33% 1% 4% 2% C C+ 42% 45% 51% 38% C C- D 26% 51% 32% 58% E A/B: No problem paying for any prescription medicine – can afford premium priced branded products (A: Senior managers in business or commerce. apprentices and trainees.

malaria • HIV • ViiV Healthcare Partnership • Brazil JV • PHASE1 • Advance Market • Positive Action Commitment and PAFC • Humanitarian relief 1 PHASE = Personal Hygiene And Sanitation Education 11 . GSK’s contribution to EM healthcare New Pre Clinical Clinical Post Health Business R&D R&D Launch Systems Models • R&D PPPs • R&D PPPs • Tiered pricing • Continuing • 20% reinvestment • Knowledge Pool • Knowledge Pool • Price caps Medical • Lymphatic Education Filariasis • Open lab • EM-focused R&D • MIC Pricing • Voluntary elimination • Malaria screen • Malaria vaccine • Branded generics licencing • African malaria • TB.

FLIXOTIDE & SERETIDE across 4 quarters 12 .LDCs: Price reductions end Q1 2009 lead to more patients affording p g IP products p by y end 2009 Francophone Sub Saharan Africa Sales Volume Average Price Q1 Q2 Q3 Q4 Average of Prices Vs Sum of sales volume of AVANDIA. FLIXONASE.

A) RHINOCORT + AQUA (AZN) 13 Avamys launched Feb 2010 . Avamys in Mexico: Optimal p pricing p g delivers rapid p uptake p IMS Monitor: Inhaled Nasal Steroids % Weekly Market Share Units % Weekly Share Units 50% 48% 45% 40% 34% 35% 31% 30% 30% 27% 27% 25% 20% 20% 15% 13% 10% 8% 8% 5% 5% 5% 3% 0% 0% 0% 0% w1 w2 w3 w4 w5 w6 w7 w8 w9 w10 w11 w12 w13 w14 w15 w16 AVAMYS 2A(GSK) RINELON (ESX) UNICLAR (SMX) FLIXONASE AQUA (GSK) NASACORT AQ (S.

3m +18% £669m +30% Pandemic Drive our Innovative brands £967m +17% 14 14 Source: GSK 09 reported sales. CER growth rates . Emerging Markets strategy Scale up our Cl Classic i brands b d Build and capture business the Vaccines market £1.

Laboratoire Pharmaceutique Algérien (LPA Algeria). Walvax (Priorix in China). Intercell (needle-free vaccine technology). . 15 Note: Lucozade China with Uni-President China Holdings. and Dong-A Pharmaceuticals are outside of GSK’s “Emerging Markets” business. Bolt-on acquisitions and partnerships 13 deals completed across the business will t ib t to contribute t the th Emerging E i Markets M k t business b i Classic business P ki t Pakistan Near EM/AP Korea Algeria East Innovative business Vaccines business Consumer Walvax Dr Reddy’s (ex-India). Neptunus (flu in China).

Scale up our Classic brands business Our own portfolio Bolt-on acquisitions Portfolio deals Growth Egypt Oct 08 June 09 2007 2009 +12% +20% Pakistan Dec 08 Near East July 09 Licensing .July 08 £45m sales 2009 >350 dossiers to be filed by end 2010 EM/AP Growth Mar 09 2007 2009 £46m sales 2009 Local Acquisitions +5% +11% Russia July 09 Total Classic Business Growth Brazil 2007 2009 Dec 09 Mexico +5% +18% Algeria 16 .

473 hospitals 17 .000 hospitals vs current 100 cities & 6.Ventolin HFA in China: Increasing g patient p access drives expansion p Chinese government prioritized EDL as a key driver of new healthcare reform in April 2009 Salbutamol has been listed in NEDL since Oct 2009 GSK has been winning tenders in EDL market with Ventolin HFA since early 2010 Plans to expand Ventolin HFA penetration to low tier market Reach 234 cities and over 10.

. Market value as at 31 March 2010. Strategic Collaboration with Aspen Aspen is Africa’s Africa s largest pharmaceutical manufacturer GSK acquired 19% stake (market value of £0.6bn) Establishes “GSK Aspen Healthcare for Africa” brand Bi Brings ff d bl medicines affordable di i t sub-Saharan to bS h Af i (SSA) Africa Leverages GSK’s infrastructure in SSA and Aspen’s local leadership South Africa Disposal of manufacturing site and tail brands simplify GSK’s operating model Share of after tax p profits of associates and joint j ventures £21m in 1Q10 18 Transaction closed 30 November 2009.

Drive our Innovative business Core portfolio New portfolio Future portfolio 2009 Turnover New p products: Votrient £276m (+21%) Arzerra denosumab y Benlysta £115m (+7%) Horizon darapladib £76 £76m (0%) Targeted R&D developing EM- specific portfolio £76m (+8%) Tykerb T k b for f gastric ti and H&N cancers Liver cancer £51m (+11%) Market-specific FDC FDCs 19 .

20 . Stiefel opportunity is greatest in EM Stiefel acquisition provides access to Total Stiefel + GSK EM derms ~80% of the EM derms market sales by market 110 100 Stiefel Brands ($135m) 90 GSK Brands ($238m) 80 70 60 50 40 30 20 10 0 audi ndia stan Other EM Brrazil xico uela key Turk Sa In Venezu Mex Pakis Source: IMS GSK revenues are for Calendar Year 2008. while Stiefel revenues are for Financial Year 2008.

(2009 EM vaccines data) . GSK reported sales.0bn (+22%) paediatric vaccines £669m (+30%) GSK vaccines Significant GSK growth potential New geographies Broad portfolio. Build and capture the Vaccines market Significant market GSK has 33% of the growth th potential t ti l market and is growing faster Growing government attention to p public health agenda g Total EM vaccines market 2009 Large birth cohorts for £2. well-positioned to provide for spectrum of needs Local partnership is critical 21 Source: GSK estimates for market.

GSK has the broadest vaccine portfolio in EM GSK Merck Sanofi Pfizer Novartis DTPw combos 9 9 9 DTPa combos 9 9 MMR / Varicella 9 9 9 Hepatitis A 9 9 9 Rotavirus 9 9 Meningococcal 9 9 d Pneumococcal 9 9 Influenza 9 9 9 HPV 9 9 Malaria d Dengue d d 22 9 = available in EM. d = Ph III / registration in EM .

3bn) 23 .Strong launches are building the vaccines business Launched mid 2009 and already £26m in 1Q10 Brazil Fiocruz 10+ year contract Mexico 3 year contract Turkey 70% market share Hong Kong 70% market share AMC 10 year contract for GAVI countries ($1.

24 2 including organic growth and bolt-on acquisition strategy. GSK Emerging Markets in 2015 Outgrow the market Evolve our business IMS projects EM market growth Vaccines of 13-15%1 Classic Innovative Our objective is to grow faster than th the k t2 th market 2009 Classic Vaccines Innovative 2015 ambition 1 Source: IMS Prognosis through 2013. redefined for GSK EM region. .

legal and other unallocated pharmaceuticals costs.2 towards Europe and US EM has been in “investment mode” Europe 58.7 1 Operating margin excluding R&D.7 EM margin expected to remain in EM 35. and 25 including pandemic. Operating profit margin 2009 Operating Profit Margin1(%) GSK’s reported regional margins exclude R&D & and legal expenses which are heavily weighted US 66. .3 mid-30s id 30 range AP/J 52. as well as profit from asset sales.

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