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FTSE 100: GSK tops forecasts after strong sales of shingles vaccine

GSK (GlaxoSmithKline) logo is seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration
GSK (GlaxoSmithKline) logo is seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration (Dado Ruvic / reuters)

GlaxoSmithKline has improved their forecasts for 2023 after results reveal strong sales of the pharmaceutical firm's shingles vaccine.

On Wednesday, the company issued its full year and fourth quarter results, revealing better than expected fourth quarter profit and sales forecasts. GSK (GSK.L).

Emma Walmsley, CEO of GSK, stated that the company has seen "good momentum" so far this year, and that renewed forecasts reveal a turnover growth of between 6% and 8% for 2023.

Encouraged by sales of Shingrix, the firm's latest shingles vaccine, allowed the firm to update its forecasts.

GSK reported that its highly successful shingles treatment generated £3 billion in sales with a 72% year-over-year growth, boosted by robust growth in China and Germany. At the same time, vaccine revenues rose 17% to £7.9 billion for the year.

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In 2022, the pharmaceutical firm unveiled ambitious plans for a drug aimed at seniors called Shingrix, which is a shingles vaccine.

Shingrix will now receive a fresh marketing effort after experiencing a significant decline in sales during the pandemic.

GSK has forecasted that demand for Shingrix in the US will rise as the healthcare system recovers from the disruption to non-COVID-19 vaccination schedules.

The company stated that it doesn't anticipate any substantial COVID-19 pandemic sales in 2023, following the £2.4m generated by its COVID solutions unit last year.

This unit was mainly driven by sales of the coronavirus therapeutic drug Xevudy, which has since lost popularity among alternative COVID-19 therapies because Omicron and the latest variants have likely made it obsolete.

The London-listed drugmaker (^FTSE) said sales grew by 19% to £29.3 billion in 2022, compared with the previous year.

GSK's shares are down about 20% since January 2020, compared to rival AstraZeneca's (AZN.L), whose stock has leapt more than 40% over the same period.

GlaxoSmithKline plc (GSK.L) stock climbed 0.46% in early trading in London, to 1,430p, up 6.60p in the last 24 hours.

Referring to the results Sheena Berry, equity research analyst at Quilter Cheviot said: “GSK’s results are pretty solid and ahead of expectations, now delivering a few consecutive quarters of good performance. The main product in focus is Shingrix, a shingles vaccine, which delivered a quarter ahead of expectations. Some of the better performance was helped by older products such as respiratory product Advair, however this is less of a focus and not core to the investment thesis. GSK’s new drugs and development pipeline will be crucial for 2023, and for now guidance is as expected."

Sebastian Skeet, senior analyst at global primary research firm Third Bridge also spoke about the latest results from GSK and said: “GSK’s adult RSV candidate has demonstrated compelling efficacy and safety.

"However, peer Pfizer also has a comparable candidate. Additionally, Moderna recently entered the running with strong p3 data for their mRNA-based candidate MRNA-1345. With the usual caveats to cross-trial comparisons, Moderna’s efficacy, safety, and tolerability data look broadly in line. A key potential differentiator for GSK may be in durability with the company suggesting potential multi-year protection.

"On balance, Moderna, by virtue of using mRNA technology, could theoretically combine Flu, RSV, and Covid-19 into one shot that would negate any durability advantage for GSK and represent an attractive option for healthcare systems. Regardless, the market is estimated to be north of USD 10bn so there is enough room for multiple players.”

Watch: GSK tops quarterly forecasts