GSK sales top forecasts

GlaxoSmithKline posted above-forecast numbers on Wednesday, boosted by strong demand for its Covid-19 drug.

The blue chip reported first-quarter turnover of £9.8bn, a 32% improvement year-on-year, while operating profits rose 65% to £2.8m. Adjusted earnings per share were 32.8p, a 43% increase.

Consensus had been for group revenues of around £9.2bn.

Emma Walmsley, chief executive, attributed the performance to “good momentum” across its speciality medicines and vaccines.

Xevudy, GSK’s antibody treatment for Covid-19, generated sales of £1.3bn during the quarter after receiving emergency approval last year. Analysts had expected sales of Xevudy to be closer to £1.1bn.

Another strong performer was shingles vaccine Shingrix, which delivered sales of £698m and helped push turnover in the vaccines division 36% higher at £1.7bn.

As at 0845 BST, shares in GSK were trading up 1% at 1,768.2p.

Walmsley said: “We have delivered strong first-quarter results in this landmark year for GSK, as we separate consumer healthcare and start a new period of sustained growth.”

GSK announced earlier this year that it would spin out its consumer healthcare unit, which includes brands such as Sensodyne, Panadol and Centrum, among others. The firm said on Wednesday that it remained on track to demerge and list the business, which is being rebranded Haleon, in July.

It also reiterated full-year guidance for the slimmed down drugs business, with sales growth forecast to be between 5% and 7%, and adjusted operating profit between 12% and 14%.

GSK said Covid-19 treatments were expected to contribute a similar level of sales in 20222 but at a “substantially reduced profit contribution”, however, because of the increased proportion of lower margin Xevudy sales.

The treatment has shown to be less effective against new strains and has been withdrawn from the US market as a result.