GSK sees strong growth following Haleon split and vaccine drive

GSK beat market estimates for fourth-quarter results on Wednesday and unveiled an upbeat forecast for 2024 and beyond.

It followed a ramp-up of its vaccines and cancer drugs pipeline, underscoring the benefits of its consumer health unit spin-off.

This is the British drug maker’s first annual earnings report after it spun off Haleon in July 2022. While GSK has been selling its stake, it remains a top shareholder in the company that owns Sensodyne toothpaste and other household brands.

Chief executive Emma Walmsley’s strategy has been centred on sharpening GSK’s focus on vaccines and infectious diseases and shifting its HIV focus to long-acting treatment and prevention therapies, amid a series of upcoming patent expiries and declining revenue from current best-sellers.

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“We are now planning for at least 12 major launches from 2025, with new vaccines and speciality medicines for infectious diseases, HIV, respiratory and oncology,” said Ms Walmsley.

The company is betting on Arexvy, its respiratory syncytial virus (RSV) for older adults, to be its next blockbuster medicine, as costly US litigation over discontinued heartburn drug Zantac looms and it recovers from a series of setbacks in its cancer portfolio.

Arexvy clocked sales of £1.24 billion (€1.45 billion) for the year ended December 31st, following a strong second-half launch that has trounced a shot from US rival Pfizer.

GSK expects its adjusted profit per share to increase between 6 per cent and 9 per cent in 2024 on sales growth of 5 to 7 per cent, above analysts’ expectations for growth, according to a company-supplied poll.

The company also expects sales and adjusted operating profit to grow more than 7 and 11 per cent annually by 2026, compared with 5 and 10 per cent forecast earlier, respectively.

By 2031, GSK now expects to achieve sales of more than £38 billion (€44 billion), £5 billion (€5.8 billion) ahead of what was estimated earlier.

It reported a fourth-quarter profit of 28.9 pence per share on sales of £8.05 billion (€9.4 billion), compared with analysts’ average expectations of 28.63 pence profit on sales of £7.29 billion (€8.5 billion), according to LSEG data.

“GSK’s exposure to the US, which accounts for 52 per cent of overall revenues, provides particularly lucrative possibilities, while Europe and International give geographical diversification as well as the occasional country-specific drug which can dominate the local market,” said Richard Hunter, head of markets at interactive investor.

Shares in the company were down 1 per cent. They are up nearly 9 per cent in the last 12 months, compared with a 1.5 per cent dip in London’s blue-chip FTSE 100 index.

Ms Walmsley said the company had not seen any “meaningful impact so far”, from Red Sea-related shipping disruptions. —Reuters