GSK boss Emma Walmsley received a shot in the arm as it upgraded its profit forecasts following strong sales of its vaccines and HIV drugs.
The FTSE 100 pharmaceutical giant expects profits to grow by between 11 per cent and 13 per cent this year, up from previous predictions of 10 per cent to 12 per cent, while sales are expected to rise by 8 per cent and 10 per cent, against a target of 6 per cent to 8 per cent previously.
GSK reported an 8 per cent rise in profits in the second quarter of the year, to £2.2billion, while sales were up 4 per cent to £7.2billion.
Boost: GlaxoSmithKline chief executive, Emma Walmsley
The figures were boosted by a 20 per cent jump in sales of its blockbuster shingles vaccine shingrix as well as a 12 per cent increase in revenues from HIV medicines.
‘We have delivered another excellent quarter of performance, with strong sales and earnings growth, notably in HIV and vaccines, and continued strengthening of the [research] pipeline and product portfolio,’ Walmsley said.
The shares initially rose but ended the session down 0.6 per cent, or 7.6p, at 1385.4p.
The profit upgrade provides a welcome boost for Walmsley as she continues to push ahead with a major overhaul, which included the splitting off of GSK’s consumer health arm Haleon last year.
The chief executive has been trying to shift the business back towards developing new drugs and vaccines, with many investors eyeing the upcoming US debut of arexvy, the first vaccine for respiratory syncytial virus (RSV) for the over-60s.
RSV causes cold-like symptoms, such as a runny nose, sneezing and a cough, but can lead to pneumonia in toddlers, the elderly and those with weakened immune systems.
Analysts at Citibank said they expected the second half to benefit from arexvy sales as hospitals and other clinics stock up ahead of the winter.
But the company has also faced difficulties, notably from series of lawsuits in the US over its former heartburn drug Zantac, which was pulled from shelves in 2019 after it was found to contain a chemical that could cause cancer.
Concerns about potential legal bills have weighed on the share price over the last year, although last month GSK said it had settled with one claimant James Goetz. Another trial is scheduled in California in November.
Walmsley told reporters the firm was ‘working through the Zantac overhang’ on the share price and was ‘very confident’ in its position.
