By Karim Hammam
British pharmaceutical giant GSK saw its shares slide 7% on Wednesday after reporting a 2% decline in vaccine sales to £2.6 billion for the three months ended September 30, overshadowing a better-than-expected rise in quarterly profits.
Vaccine Sales Decline
Demand weakened for the company's shingles vaccine Shingrix, where sales fell 5%, and its respiratory syncytial virus (RSV) shot Arexvy, which tumbled 24% amid lower US sales.
Profits Beat Forecasts
Core operating profits, excluding exceptional items and currency movements, rose 5% to £3.08 billion, surpassing the £2.93 billion market consensus. Sales on a constant currency basis increased 5%. However, pre-tax profits dropped to £1.94 billion from £2.5 billion a year earlier.
Specialty Medicines and Cancer Treatments Grow
Earnings were supported by a 15% jump in specialty medicine sales and a 23% surge in cancer treatment revenue during the quarter.
Analyst Warns of Patent Cliff
AJ Bell investment director Dan Coatsworth said chief executive Luke Miels faces pressure to build a pipeline of new drugs ahead of the loss of exclusivity on the blockbuster HIV drug dolutegravir. He noted progress in specialty medicines and cancer pipeline expansion but said the latest update shows Miels still has significant work ahead.
Cost-Cutting and R&D Overhaul
GSK previously announced plans to cut annual costs by £1.9 billion over three years to fund investment and offset the dolutegravir patent expiry. The firm will close its main research hub in Stevenage and open a new flagship site in Cambridge, with around 350 R&D jobs cut across the US and UK earlier this year.
