Signs of a weak third quarter for GSK’s key vaccines franchise have hit the FTSE 100 company’s share price, creating uncertainty in the city about the sector’s outlook ahead of this week’s trading update.
Prescription tracking services in the U.S., its largest market, have shown disappointing numbers for both blockbuster vaccines Alexby and Shingrix in the company’s respiratory syncytial virus (RSV) and shingles portfolios, respectively. As a result, the vaccine business will be a major focus on Wednesday.
Both vaccines are a key part of GSK’s attempts to revive its medicines portfolio under Dame Emma Walmsley, its chief executive since 2017. She separated GSK’s consumer goods company, Haleon, as an independent FTSE 100 company in 2022 to focus resources on growing its core biopharmaceutical business. pipeline.
Arexvy benefited from strong product launches and availability after GSK beat Pfizer to become the first drugmaker to win U.S. regulatory approval in the same period last year.
However, it is unlikely to repeat itself during this third quarter, with the combination of weak RSV outbreaks this season and the prioritization of COVID-19 vaccinations having a “damping effect” on Aleksby’s sales. will be done.
GSK’s shares have fallen about 12% over the past six months due to lower expectations, and were unable to sustain gains this month after GSK announced a block settlement of up to $2.2 billion in the United States. Old heartburn drug Zantac causes cancer. Last week’s share price closed at £14.48, giving the company a value of £77.5bn.
In GSK’s last trading update at the end of July, the London-based company raised its group full-year forecast for the second quarter for the second time, driven by increased sales of HIV and cancer drugs, but the results The outlook has been revised downward. Regarding the vaccine business, the company cited slowing growth of Alexby and declining sales of Shingrix as reasons.
Dame Emma Walmsley is trying to revive GSK’s pharmaceutical portfolio
mega agency
In June, U.S. health officials voted to narrow Alexby’s use, delaying its recommendation to adults under 60, a further setback.
This month, GSK presented data from the third season of Aleksby, which Barclays analysts said supported GSK’s claim that it had a “best-in-class” vaccine. However, they warned that “the long duration of each dose again raises questions about the revaccination schedule.”
RSV is a common contagious virus that affects the lungs and respiratory tract and has been one of the most common infectious diseases for which there is no vaccine or specific treatment. Ms Walmsley, 55, called it a “horrible disease” that would put “an enormous burden on the health system”.
GSK executives continue to believe that Arexvy has the potential to generate peak annual sales of over £3bn in the medium to long term and that revaccination will be recommended.
Arexvy’s market share lead is expected to remain stable despite the decline in sales volumes. Internal confidence is supported by the vaccine’s global expansion, with approval in 50 markets and launch in 38 markets, and the U.S. sales force reaching more patients.
UBS analysts said last week: “We do not adjust our price target as the downside from increased vaccine uncertainty largely offsets the elimination of the Zantac litigation overhang.”
The brokerage added: “GSK’s main focus will be its vaccine franchise, but both Shingrix and Arexvy have had weak third quarters in the US, resulting in an uncertain outlook for 2025. There is,” he added.
Barclays analysts said: “Trends in Aleksby and Shingrix suggest a difficult setup for GSK for the third quarter trading update.” Given the uncertainty regarding revaccination, we lower our Alexby forecast. ”
