GSK hikes guidance after strong third quarter

GSK announced a robust third quarter on Wednesday, prompting an upgrade to its full-year guidance.

The FTSE 100 pharmaceutical giant said total sales rose 10% to £8.15bn, making for 16% growth when excluding the impact of Covid-19.

Notably, the vaccines segment showed exceptional growth, with sales surging 33% or 34% when excluding Covid-related sales.

Key contributors to the growth included Shingrix, with sales of £0.8bn, marking a 15% increase, and Arexvy, which generated £0.7bn in sales.

While the speciality medicines segment saw a marginal decline of 1% in sales, it demonstrated impressive resilience with a 17% growth rate when excluding the impact of Covid.

HIV treatments within the segment contributed significantly, with a 15% increase in sales.

General medicines sales meanwhile experienced a 2% decrease, primarily due to the impact of generic competition for older products.

However, the decline was partially offset by the performance of Trelegy, which saw a 23% increase in sales.

GSK’s strong quarter was reflected in its total operating profit, which surged 64%, and total continuing earnings per share, which grew 92%.

Adjusted operating profit also saw substantial growth, increasing by 15%, and adjusted earnings per share rose by 17%.

GSK said the gains were driven by solid execution, resilient growth, and higher royalty income, partially offset by increased investments in research and development, new product launches, and a 7% reduction in operating profit from lower Covid-19 solutions sales.

The company’s cash generated from operations showed a robust performance, increasing 32% to reach £2.51bn.

Regarding research and development, GSK said it was making significant strides as Arexvy, the first RSV vaccine for older adults in Japan, received approval, while preliminary phase three data for adults aged 50 to 59 was presented at ACIP, supporting regulatory filings.

Additionally, new data for Shingrix in China demonstrated 100% efficacy in preventing shingles in adults aged 50 and over, and a co-promotion partnership with Zhifei in China was set to start in 2024.

Further research and development achievements included the approval of Apretude for HIV prevention in the EU and ongoing advancements in clinical development plans for innovative long-acting treatment and prevention regimens, with data expected in 2024.

GSK also noted the approval of Ojjaara by the US FDA as the first and only line-agnostic treatment for myelofibrosis patients with anaemia, as well as the approval of Jemperli plus chemotherapy in the US as a new frontline treatment for endometrial cancer.

Moreover, GSK announced an agreement to acquire worldwide rights to Janssen’s JNJ-3989, a development that could enhance functional cure rates for bepirovirsen in chronic hepatitis B treatment.

As a result of its performance, GSK upgraded its 2023 guidance and now anticipated a 12% to 13% increase in turnover, growth of 13% to 15% in adjusted operating profit, and a 17% to 20% increase in adjusted earnings per share, all at constant exchange rates and excluding Covid-19 solutions.

GSK declared a dividend of 14p for the third quarter, with an expected full-year dividend of 56.5p.

“GSK is delivering strong and sustained performance momentum, with another quarter of double-digit sales and earnings growth,” said chief executive officer Emma Walmsley.

“Competitive performance was broadly based but benefitted particularly from the outstanding US launch of Arexvy, the world’s first RSV vaccine.”

Walmsley said the company’s “excellent execution” supported an upgrade to full-year 2023 guidance, adding that it had clear momentum as it looked as far as its 2026 outlooks.

“GSK’s longer-term outlook also continues to strengthen, with progress in our vaccines pipeline, the development of our ultra long-acting HIV portfolio and significant new prospects in respiratory.”

At 0834 GMT, shares in GSK were up 1.58% at 1,480.4p.

Reporting by Josh White for Sharecast.com.