Pharmaceuticals giant GSK has seen a surge in sales thanks to the continued strong growth of its shingles vaccine, as it embarks on a two-year programme to split the firm in two.
The company said it expects to spend £2.4 billion on the division, which will separate it into one business focused on research and development and another focused on consumer health.
The announcement came as the drugs giant posted full-year earnings below its consensus and predicted a decline for the current year.
GSK said it is “too soon” to assess the full impact of the coronavirus outbreak on the company, as the firm joined global efforts to develop a vaccine.
The company said production has halted at its packaging site in Tianjin, as a result of the virus which has gripped mainland China for weeks.
— GSK (@GSK) February 5, 2020
But GSK said its “first priority” is the welfare of its 3,000 staff in the country and it has excluded the impact of coronavirus from its forecasts for the year ahead.
Chief executive of the business Emma Walmsley said: “Our staff are the priority so we are closely monitoring what is happening.
“We are following advise to stop business travel until at least mid-February and have instructed staff to work from home.”
GSK provided the update as it reported a surge in sales thanks to the continued strong growth of its shingles vaccine.
Bosses revealed that sales of the company’s Shingrix vaccine hit £1.8 billion during 2019, with particularly encouraging results in the US.
Ms Walmsley said excellent progress had been made on her three targets of innovation, performance and trust.
“In 2020, our first priority remains innovation, to progress our pipeline and support new product launches,” she said.
“Recent data readouts underpin our decision to further increase investment in R&D (research and development) and these new products.
“At the same time, we are again focused on operational execution, including delivering a successful integration in consumer healthcare, and we are also preparing for the future, starting a new two-year programme to get GSK ready for separation.”
It said it will pay between £600 million and £700 million in costs towards the preparation of the restructuring but believes it will secure £700 million in annual savings by the 2021-22 financial year.
The separation is still expected to complete in 2022 and will be supported by divestment, such as the £822 million sale of its travel vaccines arm Rabipur which it announced in October.
Bosses also highlighted strong growth for its Nucala asthma treatment and GSK’s once-daily Trelegy inhaler for treating chronic obstructive pulmonary disease.
Total respiratory sales hit £3.08 billion for the year, with £518 million from Trelegy and £768 million from Nucala.
They helped GSK record overall sales of £33.8 billion last year, up 10% on a year earlier, with pre-tax profits up 25% to £1.7 billion.
The company said the year ahead is expected to see a 1% to 4% fall in earnings per share – the company’s preferred measure.
It added: “This guidance excludes any impact in 2020 from… any potential impact on our business from the coronavirus outbreak.”