New GSK raised its 2022 forecast for the second time this year, after third-quarter earnings and sales topped estimates, continuing its strong start as a standalone prescription medicine and vaccine business since carving out its consumer health division Haleon.
After years of underperformance relative to its peers and missing out on the lucrative market for the first set of COVID-19 vaccines, GSK has delivered a string of strong results.
The latest is led by a record quarter for its blockbuster shingles vaccine Shingrix and higher-than-expected revenue from its COVID therapy, Xevudy.
Having survived a revolt by activist investors Elliott and Bluebell last year, GSK‘s prospects have been boosted by clinical trial success, though concerns remain around U.S. litigation over heartburn drug Zantac.
Thousands of lawsuits have been filed in the United States against a raft of drugmakers over allegations the heartburn drug contains a probable carcinogen.
GSK said it had incurred a charge of £45 million in the third quarter, primarily reflecting provisions for increased legal fees related to Zantac.
Originally marketed by a forerunner of GSK, Zantac has been sold by companies including Pfizer, Boehringer Ingelheim and Sanofi, as well as a handful of generic drugmakers.
Shingrix and Xevudy
Meanwhile, Shingrix generated quarterly sales of £760 million, compared with the GSK-compiled analyst consensus forecast for £685 million, with sales rebounding as COVID pressures have eased.
Xevudy handsomely beat expectations, raking in £411 million in the quarter, well ahead of the GSK-compiled consensus of 60 million, helped by currency exchange movements making those sales more profitable than modelled by analysts.
However, the medicine has fallen out of favour in the arsenal of COVID-19 therapies on the basis that Omicron and the variant’s latest offshoots have likely rendered it obsolete.
On Wednesday, GSK said it anticipated that sales in its COVID-19 solutions business would be substantially lower going forward.
The London-listed drugmaker now expects 2022 sales to rise between 8 per cent and 10 per cent and adjusted operating profit to increase by 15 per cent to 17 per cent, excluding any contributions from its COVID-19 solutions business. It is the second hike to the company’s initial full-year forecasts issued in February.