By Bhanvi Satija
LONDON, April 29 (Reuters) – GSK posted first-quarter profit and sales above analyst expectations on Wednesday, as pharmacies and hospitals stocked up on its pre-filled shingles vaccine, providing a one-off boost.
The results cover the first full quarter under the leadership of CEO Luke Miels, who was hired with a remit to convince investors GSK can hit bold 2031 sales targets, boost the drug pipeline and navigate the looming 2028 patent expiration for its HIV medicine dolutegravir.
Initial market reaction to the results was unenthusiastic.
GSK’s shares dipped 1.9%, underperforming the broader FTSE 100. They have gained around a third since Miels’ appointment was announced last September and some 9% this year since he formally took over.
Sheena Berry, healthcare analyst at Quilter Cheviot in a note said the underlying performance was encouraging even if the headline results were “helped by a couple of one‑off factors”.
British rival AstraZeneca also posted an earnings beat on Wednesday, buoyed by demand for its cancer and rare disease drugs.
LONG-TERM REVENUE TARGET
Miels, who was previously chief commercial officer, is under pressure to show GSK’s research and development can deliver a long-term revenue target of over 40 billion pounds ($54 billion) by 2031. Analysts expect 35 billion pounds in sales that year.
GSK first-quarter revenue was 7.6 billion pounds, right in line with expectations.
Sales of its shingles vaccine, Shingrix, at 1.03 billion pounds, exceeded expectations of 851 million pounds, marking a record quarter, helped by higher demand in European markets.
They were augmented as U.S. distributors and pharmacies bought up the new pre-filled format of the shot which was approved by the U.S. Food and Drug Administration in July.
Barclays estimated the value of the one-off boost for stocking was 100 million pounds.
Sales of GSK’s specialty medicines, which include its HIV business and cancer treatments, were in line with estimates at 3.23 billion pounds.
Miels is seeking to focus on speeding up development of medicines, including testing its targeted cancer therapies, licensed from China’s Hansoh Pharma, in multiple late-stage studies following strong early-stage data.
“Alongside operational delivery, we are focused on execution and accelerating R&D,” he said in a statement.
Under his leadership, GSK has also increased bolt-on acquisitions, agreeing to buy U.S. biotech RAPT Therapeutics for $2.2 billion earlier this year and Canada’s 35Pharma for $950 million.
The drugmaker posted core earnings per share of 46.5 pence for the three months ended March 31, compared with analyst expectations of 43.3 pence.
GSK maintained its full-year forecast of 3% to 5% sales growth and core operating profit growth of 7% to 9%.
($1 = 0.7405 pounds)
(Reporting by Bhanvi Satija in London; Editing by Andrew Heavens, Louise Heavens and Barbara Lewis)
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