GSK offsets vaccine losses with new drugs for cancer and HIV

Sales growth at GSK slowed in the third quarter, driven by a drop in vaccines revenue, but despite cutting the outlook for its vaccines division for a second time this year the FTSE 100 company has reiterated its full-year group forecasts.
Total sales at Britain’s second biggest pharmaceuticals group rose 2 per cent to £8 billion at constant currencies in the three months to the end of September, with revenue from HIV and cancer treatments offsetting a 15 per cent decline in vaccine sales.
Total operating profit dropped 86 per cent to £189 million after GSK booked a £1.8 billion charge relating to this month’s agreement to settle the vast majority of US safety lawsuits against its old Zantac blockbuster drug without admitting liability.
Dame Emma Walmsley, GSK’s chief executive since 2017, said the strong growth in specialty medicines through new product launches in oncology and HIV showed the “resilience we have now built into GSK’s portfolio and performance”.
She added: “Our pipeline continues to strengthen, with 11 positive phase III trials reported so far this year, and we are currently planning launches for five major new product approval opportunities next year.”
They include Blenrep, a new cancer treatment, and Depemokimab, the first long-acting medicine for patients with severe asthma.
Walmsley, 55, is focused on rebuilding GSK’s biopharma pipeline and portfolio, having spun off Haleon, its consumer healthcare business, as a standalone FTSE 100 company two years ago.
The decline in sales in its vaccines business was mainly due to a 72 per cent drop in revenue from Arexvy, its new respiratory syncytial virus (RSV) vaccine.
GSK said that sales were weakened by a more restrictive recommendation from US health officials for individuals aged 60 to 74, prioritisation of Covid vaccinations “related to a resurgence of Covid-19 infection rates and lower channel inventory versus significant launch stocking in the prior year”.
However, Arexvy maintained about two thirds of the vaccination share for the year to date in the retail market, where the “overwhelming” majority of doses are administered. Arexvy is approved in 51 markets globally and 16 countries had national RSV vaccination recommendations for older adults.
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The drop in Arexvy sales and also a decline in sales of its blockbuster shingles vaccine Shingrix led to GSK cutting its outlook for its vaccines business this year to a decrease of “low-single-digit per cent”.
This was offset by growth in specialty and general medicines, to leave group revenue growth forecasts unchanged at 7 per cent to 9 per cent, with core operating profit of between 11 per cent and 13 per cent.
At GSK’s last trading update — at the end of July for the second quarter — it had raised its group full-year forecasts for a second time.
Walmsley said: “All this means we are on track to deliver our 2024 guidance, and we are even more confident in our 2026 and 2031 outlooks.”
Shares in GSK fell 3.3 per cent, or 47¾p, to £14.03 on the London Stock Exchange, leaving them down 5 per cent this year.
Analysts at Jefferies said the third-quarter group sales were overall in line with the consensus forecasts of analysts but given that GSK has reiterated its outlook with guidance to the mid-point of the range it suggests 1 per cent to 3 per cent potential consensus downgrades in the City.