Shingles vaccine helps drug giant GSK boost sales
The company said earnings will be better than first feared, after a year of heavy investment
Shingles helped drugs giant GlaxoSmithKline beat expectations as the company revealed sales of its vaccine for the disease soared.
Bosses revealed that sales of the Shingrix vaccine hit £386 million in the three months to June 30, compared with analyst predictions of £366 million.
Launched in 2017, the company reckons sales will be more than £1 billion this year.
The news comes as the business, which also owns household brands including Horlicks and Aquafresh, said revenues during the three month period jumped 7% to £7.8 billion, with pre-tax profits doubling from £614 million to £1.26 billion.
The pharmaceuticals division rose 2% to £4.3 billion, consumer healthcare was up 5% to £1.9 billion, but the vaccines division outshone them with a 26% boost.
Bosses blamed the low growth in pharma on the release of cheaper generic versions of its Advair asthma drug.
On GSK’s preferred measure, the company also revealed that earnings per share was likely to only drop by between 3% and 5%, compared with a 5% to 9% decline previously predicted.
Bosses said this was due to “improved operating performance, lower interest expense and a one-off benefit to the share of after tax profits of associates”.
The strong results come as GSK continues the completion of its break-up plans, which will see its consumer health division split off into a new joint venture with US rival Pfizer.
Chief executive Emma Walmsley said: “We remain focused on strengthening our R&D pipeline and the execution of new product launches. Positive clinical data received so far this year offer significant new opportunities for products in Oncology, HIV and Respiratory and we expect more important readouts in the second half of the year.”
R&D – research and development – has been a major growth area for Ms Walmsley since becoming chief executive in 2017.
Last year GSK bought cancer specialist Tesaro for 5.1 billion dollars (£4.1 billion) in a deal many thought was overpriced.
Some analysts and investors have come round to the idea and recognised the need for GSK to improve its drug supply line in the face of stiff competition.
For example, GSK’s HIV drugs division came under pressure, dropping 2% due to increased competition.
But many will be hoping for more signs that the investment is worthwhile.
Charlie Huggins, a fund manager at Hargreaves Lansdown explained: “We think these are a solid set of results from GSK, however we aren’t going to get too carried away.
“Confidence in GSK’s drug pipeline is still fairly thin on the ground, and it will be some time before we know whether efforts to reinvigorate performance under new leadership have been successful.
“That said, we are encouraged by the bold steps taken by Emma Walmsley since her appointment to the top job in 2017.”