By Yadarisa Shabong and Maggie Fick
(Reuters) -British drugmaker GSK cut its forecast for 2024 vaccine sales on Wednesday after quarterly revenue from its blockbuster shingles and respiratory syncytial virus (RSV) jabs missed expectations, sending its shares lower.
CEO Emma Walmsley’s bet on infectious disease drugs and vaccines, including new blockbuster respiratory syncytial virus (RSV) vaccine Arexvy, has been paying off as GSK faces a combination of patent expiries and declining revenue from current best-sellers by the end of this decade.
But second-quarter sales of Arexvy, which launched in the U.S. last year and took two-thirds of the market in a blow to Pfizer’s rival jab, came in at 62 million pounds ($80 million), below analysts’ average forecast of 70 million pounds.
Sales of its shingles vaccine Shingrix – GSK’s big blockbuster drug before Arexvy – were also well below market expectations at 832 million pounds. Analysts at Jefferies cited weak U.S. demand, destocking and lower benefits than expected from supplies to Zhifei China after a $3 billion deal last year.
GSK shares were down 1.4% at 0900 GMT, the second biggest fall on the FTSE 100 index.
That was despite the company beating second-quarter results forecasts and raising its full-year sales and profit estimates, with sales of cancer, HIV and other speciality medicines expected to offset the lower vaccine growth.
“From a quality perspective, downside on vaccines could more than outweigh upside on general medicines and specialty medicines,” JPMorgan analysts wrote in a note.
A U.S. public health agency’s decision last month to narrow the recommended age for use of RSV vaccines and delay the recommendation for adults under 60 unnerved GSK investors, who had hoped for a larger market for Arexvy this winter. Shares fell 6% the day after that decision was announced.
Walmsley, speaking on a media call on Wednesday, called the postponement of the decision for younger adults “surprising”. GSK would share additional data with U.S. agencies by the end of this year, she said.
Citing the U.S. agency’s decision, GSK cut its forecast for 2024 vaccine sales. It now expects that business to grow by a low to mid-single digit percentage, from an earlier expectation of high single-digit to low double-digit percentage growth.
Walmsley said the factors impacting vaccine sales were short-term, She also said she expected the company to “win the season”, responding to a question about a statement by a Pfizer executive a day earlier that the company had “significantly strengthened” its contracting position with retail pharmacies ahead of the winter RSV season.
GSK reported second-quarter core earnings per share (EPS) of 43.4 pence on sales of 7.88 billion pounds, topping analysts’ average forecasts of 38.9 pence and 7.51 billion pounds respectively, according to a company-compiled consensus.
It now expects 2024 core EPS to increase between 10% and 12%, from an earlier forecast of 8% to 10% growth. This is the second time this year it has raised its 2024 profit forecast.
Sales for the year are forecast to rise between 7% and 9%, from a previous range of 5% to 7% growth.
($1 = 0.7790 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Mrigank Dhaniwala and Mark Potter)
