GSK lifts guidance as vaccines help Q3 beat expectations

UK pharma giant GSK lifted full-year guidance after beating third-quarter expectations with an 18% rise in revenues driven by its Shingrix shingles treatment.

The company, which this year spun off its consumer unit to focus on medicines, said sales came in at £7.83bn compared with forecasts of £7.32bn. Adjusted operating profit rose 18% to £2.6bn.

GSK said it now expected to deliver sales growth of 8-10% for the full-year, compared with the 6-8% forecast in July, and adjusted operating profit growth of 15-17%.

Sales of Shringrix rose more than a third to £760m. Vaccines sales, excluding Covid-19 solutions, are expected to grow mid to high-teens percentage at constant exchange rates for the full year.

Xevudy, the company's Covid-19 antibody therapy, also performed ahead of forecasts, rising to £411m.

“The majority of expected Covid-19 solutions sales for 2022 have been achieved in the year to date. Based on known binding agreements with governments, we anticipate that sales of Covid-19 solutions will be substantially lower going forward,” the company said.

It also hailed “truly exceptional results” from a late-stage respiratory syncytial virus trial last month for what is one of the major infectious respiratory diseases without a vaccine.

GSK also announced today that the country’s food and drug administration had granted a fast-track approval review of the vaccine, with a decision expected in May. “The world has been waiting more than 50 years for an RSV vaccine. So this is a very significant scientific achievement," said chief executive Emma Walmsley.

Shares in the company were muted on Wednesday as GSK revealed that it had incurred a charge of £45m in the quarter, primarily reflecting provisions for increased legal fees related to litigation in the US over the heartburn drug Zantac.

The company, and several other drugmakers, faces thousands of claims over allegations the compound contains a probable carcinogen.

Victoria Scholar, head of investment at Interactive Investor said Zantac continued to be a drag on the shares with the higher-than-expected provisioning announced on Wednesday.

"Since the spin-off of its consumer health division Haleon, shares in GSK have shed more than 15%. However price action over the last month has started to see some more positivity come back into play with a 10% rally off the lows,” she added.

Reporting by Frank Prenesti for Sharecast.com