GSK raises forecasts after strong sales in vaccines and HIV business

GSK has raised its guidance for the full year after growth in its vaccines and HIV business helped the drugmaker beat expectations in the second quarter.

The UK-listed pharma group now expects revenue to increase by 8 to 10 per cent this year, up from previous guidance of 6 to 8 per cent, and adjusted earnings per share growth of 14 to 17 per cent, above its previous forecast of 12 to 15 per cent. 

GSK expects a strong performance in the second half, but lower growth than in the first six months of the year because of a tougher comparison to the second half of 2022. 

The upgrade to the group’s full-year forecasts comes as chief executive Emma Walmsley seeks to overhaul the business, having spun off its consumer division Haleon, which sells over-the-counter medicines, last year.

Walmsley said the company’s “momentum” supported the increase in its financial guidance and “further increases our confidence in delivering longer term profitable growth for shareholders”. 

Walmsley, who took over in 2017, has been trying to transform GSK by restructuring it to focus on pharmaceuticals and vaccines, by splitting from Haleon and replenishing its drugs pipeline. 

During the quarter, GSK had Arexvy, the first vaccine for the common respiratory disease RSV in older adults, approved in the US and the EU. It also completed the $2bn acquisition of Bellus Health, adding a speciality medicine for a debilitating and persistent cough. 

But Walmsley has struggled to convince many investors that her plan is working and the share price was dragged down last year by concerns about the potential cost of lawsuits over the heartburn drug Zantac. Shares in GSK are down 21 per cent in the last year. 

In the second quarter, GSK reported sales of £7.2bn, higher than the consensus forecast for £6.8bn, and up 4 per cent year on year at constant exchange rates.

Sales of vaccines rose by 18 per cent year on year, with Shingrix, the company’s blockbuster shot for shingles, delivering 20 per cent growth. Sales of HIV medicines increased by 12 per cent year on year at constant exchange rates. 

GSK reported continuing earnings per share of 40.1p, adjusted for the spin-off of Haleon, a rise of more than 100 per cent year on year, and above the average analyst estimate of 34.7p.