GSK Raises Annual Forecasts Despite Weak Vaccine Sales and Outlook

GSK raises 2024 earnings and sales forecasts after strong Q2 performance, driven by cancer and HIV treatments. However, weak vaccine sales, including the new RSV vaccine Arexvy, weigh on shares.

Bollywood Fever: British drugmaker GSK raised its annual earnings and sales forecasts on Wednesday after surpassing second-quarter expectations with strong sales of its cancer and HIV treatments. However, weak vaccine sales and a cautious outlook have weighed on the company’s shares.

CEO Emma Walmsley’s focus on infectious disease drugs and vaccines, including the new blockbuster respiratory syncytial virus (RSV) vaccine Arexvy, has been strategically beneficial for GSK. This is crucial as the company faces patent expiries and declining revenue from current best-sellers by the end of this decade.

GSK Raises Annual Forecasts Despite Weak Vaccine Sales and Outlook

Despite the promising launch of Arexvy in the U.S. last year, capturing two-thirds of the market and outperforming Pfizer’s rival jab, sales fell below market expectations at 62 million pounds ($80 million), compared to forecasts of 70 million pounds. Sales of GSK’s shingles vaccine Shingrix, previously its big blockbuster, also missed expectations at 832 million pounds, affected by weak U.S. demand, destocking, and lower-than-expected supply benefits from last year’s $3 billion deal with Zhifei China.

As a result, GSK shares fell 1.7% in early trade. JPMorgan analysts noted, “From a quality perspective, downside on vaccines could more than outweigh upside on general medicines and specialty medicines.”

Adding to investor concerns, a U.S. public health agency’s decision last month to narrow the recommended age for RSV vaccines and delay recommendations for adults under 60 has limited the expected market for Arexvy this winter. This decision led to a 6% drop in GSK shares the day after the announcement.

In light of the U.S. agency’s decision, GSK has revised its 2024 vaccine sales forecast, now expecting growth in the low to mid-single digit percentage range, down from the earlier expectation of high single-digit to low double-digit percentage growth. However, improved sales of cancer, HIV, and other specialty medicines are expected to more than offset the lower vaccine sales growth.

For the second quarter, GSK reported core earnings per share (EPS) of 43.4 pence on sales of 7.88 billion pounds, exceeding analysts’ average forecasts of 38.9 pence and 7.51 billion pounds, respectively, according to a company-compiled consensus.

GSK has now raised its 2024 core EPS growth forecast to between 10% and 12%, up from the previous range of 8% to 10%. This marks the second increase in its profit forecast this year. The company also expects annual sales to rise between 7% and 9%, compared to the prior forecast range of 5% to 7% growth.

Despite the challenges with vaccine sales, GSK’s strong performance in other therapeutic areas demonstrates its resilience and strategic focus on diversifying its product portfolio.


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Nicholas Edwards
Nicholas Edwards

Nicholas Edwards is a passionate writer with a keen interest in sports and business news. With a knack for delivering insightful and engaging content, Nicholas keeps his finger on the pulse of the latest developments in these dynamic fields. His enthusiasm for both sports and business shines through in his writing, making complex topics accessible to a wide audience. Whether it's dissecting the latest game-changing play or analyzing market trends, Nicholas brings a fresh perspective and a wealth of knowledge to his articles. Email @ admin@bollywoodfever.co.in

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