CEO Emma Walmsley’s bet on infectious disease drugs and vaccines, including new blockbuster respiratory syncytial virus (RSV) vaccine Arexvy, has been paying off as GSK faces a combination of patent expiries and declining revenue from current best-sellers by the end of this decade.
But second-quarter sales of Arexvy, which launched in the US last year and took two-thirds of the market in a blow to Pfizer’s rival jab, came in at £62 million (US$80 million), below analysts’ average forecast of £70 million.
Sales of its shingles vaccine Shingrix – GSK’s big blockbuster drug before Arexvy – were also well below market expectations at £832 million. Analysts at Jefferies cited weak US demand, destocking and lower benefits than expected from supplies to Zhifei China after a US$3 billion deal last year.
GSK shares were down 2.4% at 0749 GMT, the biggest fall on the FTSE 100 index.
That was despite the company beating second-quarter results forecasts and raising its full-year sales and profit estimates, with sales of cancer, HIV and other speciality medicines expected to offset the lower vaccine growth.
“From a quality perspective, downside on vaccines could more than outweigh upside on general medicines and specialty medicines,” JPMorgan analysts wrote in a note.
A US public health agency’s decision last month to narrow the recommended age for use of RSV vaccines and delay the recommendation for adults under 60 unnerved GSK investors, who had hoped for a larger market for Arexvy this winter. Shares fell 6% the day after that decision was announced.
Citing the US agency’s decision, GSK cut its forecast for 2024 vaccine sales. It now expects that business to grow by a low to mid-single digit percentage, from an earlier expectation of high single-digit to low double-digit percentage growth.
GSK reported second-quarter core earnings per share (EPS) of 43.4 pence on sales of £7.88 billion, topping analysts’ average forecasts of 38.9 pence and £7.51 billion respectively, according to a company-compiled consensus.
It now expects 2024 core EPS to increase between 10% and 12%, from an earlier forecast of 8% to 10% growth. This is the second time this year it has raised its 2024 profit forecast.
Sales for the year are forecast to rise between 7% and 9%, from a previous range of 5% to 7% growth.