Pharmaceutical GSK (GSK.L) has increased its full-year earnings outlook for the second time in four months, buoyed by record sales for its shingles vaccine.
The group – which spun off its consumer healthcare business Haleon (HLN.L) in July – posted an 18% rise in sales to £7.8bn ($8.98bn) over the third quarter, up 9% on a constant currency basis.
Sales of its blockbuster Shringrix vaccine for shingles jumped to a record £760m in the three months to September 30 with demand rebounding as countries emerge from the pandemic.
The FTSE-listed company now expects 2022 sales to rise between 8% and 10% and adjusted operating profit to increase by 15% to 17%, excluding any contributions from its COVID-19 solutions business. It is the second hike to the company's initial full-year forecasts issued in February.
The company received priority review by the US’s FDA for its new vaccine for respiratory syncytial virus, an illness that hospitalises hundreds of thousands of older adults every year. If approved, the shots are expected to generate billions in revenue.
“We are again raising our full-year guidance and expect good momentum in 2023, further strengthening our confidence in our performance outlooks, driven by Shingrix global expansion and expected new launches including our new RSV vaccine,” chief executive Emma Walmsley said.
“We are also making good progress to strengthen our early-stage pipeline and will continue to invest in targeted business development to build optionality and support growth in the second half of the decade,” she added.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Vaccines have stolen the show in GSK’s third quarter update today as Shingles vaccine, Shingrix, saw record sales. The continued roll-out is a key driver of the upgraded guidance for 2022, as are launches for the RSV (respiratory syncytial virus) vaccine. GSK also announced a third major regulatory milestone for the RSV older adult vaccine, which has been accepted for review in the United States. This follows recent acceptances in Japan and Europe.
"This is strong progress for GSK in the RSV race. Where it’s going head to head with the likes of Pfizer and J&J. GSK thinks it’s candidate could reach $4bn a year in sales, with the adult market for this currently unmet need, being the largest prize. GSK is making good progress on many levels. However, investor sentiment is being held back by ongoing lawsuits relating to the safety discontinued heartburn drug Zantac, and this is likely to remain the case until more assurances are given."
The third-quarter figures showed that underlying pre-tax profits rose 5%, with currency movement stripped out, to £2.4bn.
On a statutory basis, third-quarter operating profits fell to £1.19bn from £1.38bn a year ago due to the £377m fair-value loss on the retained stake in Haleon.
Watch: GSK's COVID-related sales close to $2 bln