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GSK racks up £1.4bn in COVID sales ahead of consumer health split

A GSK scientist studies cancer cells inside white blood cells through a microscope at the GlaxoSmithKline (GSK) research centre in Stevenage, Britain November 26, 2019.  REUTERS/Peter Nicholls
GSK reported full-year sales of £34bn. Photo:Peter Nicholls/Reuters

Pharmaceutical giant GlaxoSmithKline (GSK.L) racked up £1.4bn in COVID-related sales as the company remains on track to split its consumer healthcare business by the middle of 2022.

Pre-tax profits were down by more than a fifth last year to £5.4bn, while revenue grew 5% to £34.1bn.

Pharmaceuticals sales up 4% at £17.7bn, with COVID-related sales accounting for £1.4bn in 2021, driven largely by its antibody drug sotrovimab.

The company forecasts a rise in operating profits between 12% and 14% this year as both sales and earnings beat expectations in the fourth quarter.

GSK said it remained on track to de-merge its consumer healthcare business by the middle of 2022, a spin-off that follows the company’s rejection of Unilever’s £50bn offer for the maker of over-the-counter medicines and vitamins late last year.

Read more: Big pharma fined £35m by competition regulator over NHS drug prices

Emma Walmsley, chief executive of GSK, said: “We have ended the year strongly, with another quarter of excellent performance driven by first-class commercial execution, and we enter 2022 with good momentum.

“This is going to be a landmark year for GSK, with a step-change in growth expected and multiple R&D catalysts, including milestones on up to seven key late-stage pipeline assets.

“2022 is also the year when we demerge our world-leading consumer healthcare business.”

A capital markets event later this month will set out the growth ambitions for the demerged consumer healthcare business.

GSK rose 0.5% after it forecast higher profits ahead of its consumer health spin-off. Chart: Yahoo Finance UK
GSK rose 0.5% after it forecast higher profits ahead of its consumer health spin-off. Chart: Yahoo Finance UK

The healthcare giant confirmed three major product approvals over the course of 2021 and currently has 43 medicines and 21 vaccines in its development pipeline.

Read more: COVID puts more than one million workers on universal credit

Sheena Berry, equity analyst at Quilter Cheviot, said: Overall, GSK’s quarterly results and guidance were fine, but nothing to shout about.

“Strengthening the pipeline remains a focus with the data from the RSV vaccine in the first half of this year an important catalyst. A sale of the consumer business would also provide GSK with significant cash to invest in the pipeline.”

The company will pay a dividend of 23p per share for the quarter.

Watch: Unilever all but drops bid for GSK consumer arm