GSK increases profit forecast due to strong vaccine sales

GSK’s full-year profits forecasts have been boosted by strong sales of an asthma medicine as well as a blockbuster vaccine for shingles.

The FTSE 100 Pharmaceuticals Company posted sales of £7.4billion in the first quarter. This is up 10% or 13% excluding Covid medicine.

Sales of vaccines rose by 16 percent. Shingrix, GSK’s shingles vaccination, was up 18% at £945 millions, and Arexvy sales, GSK’s new respiratory syncytial viral vaccine for older adults generated £182million. Trelegy’s chronic obstructive lung disease and asthma inhaler sales rose by 33 percent to £591million.

GSK expects to see a core operating profit increase of 9 to 11 percent for the full year, up from its previous range of 7 to 10 percent. The company expects its annual sales to reach the upper limit of their forecast range between 5 and 7 percent.

GSK stated that they expected the first half of sales to grow faster than the second due to comparisons with the previous year, when the company benefited from the new launches and the building up of arexvy stock. The company noted that most of the Shingrix sales are expected to occur in China in the first half of the year.

GSK shares rose 1.9 percent, or 32p at £17.05, on the London Stock Exchange. This brings the gains in the past 12 months up to 17 percent.

Dame Emma Walmsley is GSK’s Chief Executive since 2017. She said that it was “another quarterly of excellent performance and pipeline progress including positive data readings for four Phase III medicines”. The drugs included those for HIV, uncomplicated Urogenital Gonorrhoea (Urogenital Gonorrhoea), endometrial carcinoma, and Multiple Myeloma.

Walmsley said, “These achievements, along with other R&D accomplishments, have improved prospects for growth this quarter in all our key therapeutic areas: infectious diseases and HIV, respiratory immunology, and oncology. We expect the momentum to continue and we look forward to another year of significant growth in sales, earnings and profits in 2024.

GSK, one of Britain’s biggest pharmaceutical companies with headquarters in London, is part of the two largest pharmaceutical groups in Britain.

Walmsley was under pressure from activist investors to revive the share price and improve the productivity of the drugs pipeline.

The management has tried to speed up the process by purchasing promising assets from smaller biopharmaceutical firms.

Investor confidence has been restored by the successful launch of Arexvy and Shingrix, both available to adults 60 years and older. GSK wants to extend the use of Arexvy for adults aged 50-59. The US Food and Drug Administration accepted a priority review application.

This vaccine may be of interest to another 15,000,000 Americans at risk. Walmsley stated that we are only at about 14 percent penetration, which leaves plenty of room to grow.

GSK and Pfizer are in a patent battle over Pfizer’s RSV vaccine, Abrysvo. The two companies launched their RSV vaccines shortly after GSK did last May. A Delaware lawsuit has set a trial date for August 2026, in which GSK alleges that Pfizer’s RSV vaccination, Abrysvo, infringes GSK patents.

Shares have been held back due to litigation in other countries, specifically concerns over potential liabilities stemming from an American wave of lawsuits alleging Zantac (an old blockbuster drug for heartburn) caused cancer. GSK has started to settle the claims.

Analysts from Barclays stated: “We cannot recall a single time when GSK has raised its guidance in the first quarter. This does make a strong statement regarding confidence about the future prospects.”

Jefferies analysts said: “We’re well above the consensus forecasts of 2026 and beyond, and believe that long-acting HIV injections, vaccines and new pipeline launches will likely mean profits face a ‘blip’ not a ‘cliff’ on HIV patent expirations beyond 2028. We believe that given the underappreciated growth profiles, shares are attractive in terms of risk/reward compared to a potential Zantac settlement.