Vaccines drive full-year growth for GSK

GSK reported a robust performance for 2023 on Wednesday, backed by broad-based growth across its segments, as it also revised its growth projections for the future.

The FTSE 100 pharmaceutical giant achieved total sales of £30.3bn , marking a 5% increase and a substantial 14% growth when excluding the impact of Covid-19-related products.

Notably, the vaccines segment demonstrated decent success, with sales jumping 25%, or 24% excluding Covid.

Key contributors to the growth were Shingrix, which generated £3.4bn in sales, reflecting a 17% increase, and Arexvy with £1.2bn in sales.

The specialty medicines segment saw an 8% decline in sales but exhibited 15% growth when excluding the effects of Covid-19.

Within this category, HIV treatments recorded a notable 13% growth, while the general medicines segment posted a 5% increase in sales.

The company's total operating profit and total continuing earnings per share displayed strong growth, driven by lower charges for contingent consideration liabilities remeasurement.

Adjusted operating profit grew by 12%, and when excluding the Covid impact, the growth was even more substantial at 16%.

That positive trend was attributed to strong sales excluding Covid, and increased royalty income, partially offset by higher investments in research and development and new product launches.

GSK's research and development efforts remained organic, with 71 vaccines and specialty medicines currently in clinical development, including 18 in phase three or registration phases.

Notably, four major products received approvals in 2023 - the Arexvy RSV vaccine, Apretude for HIV prevention, Ojjaara for myelofibrosis, and Jemperli for 1L endometrial cancer.

Business development initiatives were also evident in GSK's strategic plans, with the acquisition of Bellus Health and the proposed acquisition of Aiolos Bio in the respiratory sector.

Additionally, licence agreements with Janssen in infectious diseases and Hansoh Pharma in oncology were signed.

Looking ahead, GSK said it anticipated significant late-stage research and development milestones in 2024, including the approval of Arexvy for 50 to 59 year-olds, regulatory submissions for its meningitis vaccine, phase three data releases for depemokimab for severe asthma, Nucala for COPD, gepotidacin for UTIs and gonorrhoea, and Jemperli for endometrial cancer.

In terms of financial guidance for 2024, GSK said it expected turnover growth ranging from 5% to 7%, adjusted operating growth between 7% to 10%, and adjusted earnings per share growth from 6% to 9%.

The company also declared an increased dividend of 16p for the fourth quarter, with a total of 58p for the full 2023 year, and anticipated a dividend of 60p for 2024.

GSK also upgraded its longer-term outlooks, with its 2021 to 2026 outlook now forecasting sales to grow more than 7% at a compound annual growth rate, and adjusted operating profit to grow more than 11%.

Additionally, the 2031 sales outlook was revised to more than £38bn, with adjusted operating margins expected to remain broadly stable despite the loss of exclusivity for dolutegravir patents.

“GSK delivered excellent performance in 2023, with clear highlights being the exceptional launch of Arexvy and continued progress in our pipeline,” said chief executive officer Emma Walmsley.

“We are now planning for at least 12 major launches from 2025, with new Vaccines and Specialty Medicines for infectious diseases, HIV, respiratory and oncology.

As a result of this progress and momentum, we expect to deliver another year of meaningful sales and earnings growth in 2024, and we are upgrading our growth outlooks for 2026 and 2031.

“We remain focused on delivering this potential - and more - to prevent and change the course of disease for millions of people.”

At 0912 GMT, shares in GSK were down 1% at 1,522.4p.

Reporting by Josh White for Sharecast.com.