GSK Raises Full-Year Profit and Sales Forecasts After Strong RSV Vaccine Launch

This impressive performance has alleviated concerns among investors and analysts regarding the strength of GSK's drug pipeline.

GSK (GlaxoSmithKline) has once again increased its full-year profit and sales projections, buoyed by the successful launch of its respiratory syncytial virus (RSV) vaccine, Arexvy, in the United States.

This strategic move comes as GSK faces patent expiries and declining revenue from its existing top-selling medications.

In the third quarter, Arexvy recorded sales of £709 million ($862 million), significantly surpassing analysts’ expectations of £358 million, as reported by a company-compiled consensus.

This impressive performance has alleviated concerns among investors and analysts regarding the strength of GSK’s drug pipeline.

The company’s renewed focus on vaccines and infectious diseases, following the spin-off of its consumer healthcare business, Haleon, last year, has also contributed to positive sentiment.

GSK now accounts for nearly two-thirds of RSV vaccine doses administered in the United States since early September, according to IQVIA data.

Moreover, Arexvy is exclusively available at CVS, the largest U.S. pharmacy chain, giving GSK a competitive advantage over Pfizer, whose RSV vaccine, Abrysvo, recently entered the market.

Hargreaves Lansdown analyst Derren Nathan noted, “The relatively low exposure to COVID medicines means that unlike some of its peers, falling COVID revenues are being offset by strong growth elsewhere.”

For Arexvy, GSK anticipates full-year sales ranging from £900 million to £1 billion.

The vaccine is currently approved for use in the United States, Europe, Japan, and other countries to safeguard adults aged 60 and older.

GSK’s CEO, Emma Walmsley, remarked during a media call, “It is a very competitive market but at the moment we’re winning two out of three prescriptions.”

In light of the strong performance of Arexvy, GSK has revised its annual adjusted earnings per share growth forecast from 14% to 17% to a more robust 17% to 20%, excluding currency fluctuations.

Sales are also expected to surge by 12% to 13% in 2023, compared to previous estimates of 8% to 10%.

Investors and markets had been anticipating robust quarterly results and an upward adjustment of guidance, both of which GSK has now exceeded thanks to the successful RSV vaccine launch.

However, GSK continues to face costly U.S. litigation related to its discontinued heartburn drug, Zantac, with analysts estimating settlement costs of approximately $5 billion.

Thousands of cases in Delaware are slated for trial starting in January 2024.

Despite these challenges, GSK’s shingles vaccine, Shingrix, generated £825 million in sales in the third quarter, retaining its position as the company’s top-selling drug.