Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
GSK has lowered its vaccine sales forecast for the year because of weak demand for its new respiratory syncytial virus jab Arexvy, sending the pharmaceutical group’s shares down more than 3 per cent in early trade in London on Wednesday.
The UK drugmaker said it expected 2024 vaccine sales to fall by a low-single digit percentage. The company previously said it expected the business to grow by a low to mid-single digit percentage.
The company reported total turnover of £8bn in the third quarter of 2024, up 2 per cent but slightly below analysts’ estimates. Core operating profit rose 5 per cent year on year to £2.8bn.
A strong performance in speciality medicines, where sales rose 19 per cent, largely offset the decline in vaccines. GSK sold 12 per cent more HIV drugs in the quarter, while the company’s relatively new oncology business posted a 94 per cent increase.
Sales of Arexvy were down 72 per cent in the three months to the end of September after it became the first vaccine for RSV, a flu-like illness, to be approved by the US Food and Drug Administration in 2023.
The inoculation quickly established a market leading position over Pfizer’s rival jab and reached blockbuster status of more than £1bn in revenue within its first year of launch, with two-thirds of the market share among elderly US adults.
But GSK suffered a blow in June when an FDA committee did not recommend broader use of RSV vaccines, with routine vaccinations restricted to those aged over 75 or those aged 60-74 who are at risk of contracting severe RSV.
GSK’s results come a day after US rival Pfizer increased full-year sales and profit forecasts, reporting better than expected earnings as a surge of Covid-19 infections over the summer helped boost sales of its vaccine and antiviral treatments.
They also follow a GSK agreement to reach an up to $2.2bn settlement to resolve the vast majority of US class action cases over Zantac, the company’s former heartburn medicine that plaintiffs have alleged caused cancer. The company recognised a charge of £1.8bn relating to the settlements in its results.
The settlement removed investor concerns that litigation costs could spiral higher, but a slight uptick in shares since the settlement on October 9 has now evaporated, in a sign of lingering concerns about the performance of the broader business.
Emma Walmsley, chief executive, expressed confidence about the future outlook. “Our pipeline continues to strengthen with 11 positive phase 3 trials reported so far this year,” she said. “And we are currently planning launches for five major new product approval opportunities next year.”
The company’s stock is down 5 per cent in 2024 so far.
Additional reporting by Ian Johnston
Read the full article here