GSK lifts annual forecasts again, powered by strong vaccine launch

By Eva Mathews

(Reuters) -GSK raised its full-year profit and sales forecasts for a second time on Wednesday, following the strong launch of its respiratory syncytial virus (RSV) vaccine in the United States.

GSK is betting on RSV vaccine Arexvy to be its next blockbuster medicine as it grapples with a combination of patent expiries and declining revenue from its current bestsellers by the end of this decade.

Arexvy recorded third quarter sales of 709 million pounds ($862 million), trouncing analysts’ expectations of 358 million pounds, according to a company-compiled consensus.

The results have soothed worries from investors and analysts about the strength of its pipeline of drugs in development. A renewed focus on vaccines and infectious diseases after the company spun off its consumer healthcare business, Haleon, last year has also lifted sentiment.

GSK accounts for close to two-thirds of RSV doses given in the United States since early September, according to IQVIA data.

Arexvy is also the only shot being carried by CVS the largest U.S. pharmacy chain, giving GSK an edge over rival Pfizer whose RSV shot Abrysvo also hit markets recently.

“The relatively low exposure to COVID medicines means that unlike some of its peers, falling COVID revenues are being offset by strong growth elsewhere,” Hargreaves Lansdown analyst Derren Nathan said.

Abrysvo clocked up $375 million in third-quarter sales, Pfizer said, as it swung to a loss over charges related to its COVID products.

Full-year sales are seen between 900 million pounds and 1 billion pounds for Arexvy, GSK said. It is currently approved in the U.S., Europe, Japan and other countries to protect adults aged 60 years and older.

“It is a very competitive market but at the moment we’re winning two out of three prescriptions,” CEO Emma Walmsley said on a media call.

GSK now expects annual adjusted earnings per share to rise between 17% and 20%, excluding the effect of currency swings, up from 14% to 17% growth previously forecast.

Sales are tipped to rise by 12% to 13% in 2023, compared with earlier expectations of 8% to 10%.

Markets were looking for strong quarterly results and an increase to guidance, but GSK has exceeded those hopes, driven by the RSV launch, said Dani Saurymper, a portfolio manager at Pacific Asset Management and a GSK shareholder.

Still, costly U.S. litigation over GSK’s discontinued heartburn drug Zantac remains an overhang, according to analysts who estimate costs of about $5 billion in settlements.

Thousands of cases in Delaware are scheduled for trial starting January 2024.

For the third quarter, shingles vaccine Shingrix – the company’s top-selling drug, generated 825 million pounds in sales.

Shares in GSK, which gained over 3% early Wednesday, were down 1.3% at 1031 GMT.

($1 = 0.8226 pounds)

(Reporting by Eva Mathews in Bengaluru and Maggie Fick in London; Editing by Tomasz Janowski, Mark Potter and David Evans)