GSK lifts earnings view again after forecast-beating quarter

GSK eclipsed analyst estimates for third-quarter earnings on Wednesday (2 Nov), driven by higher sales of its blockbuster shingles vaccine Shingrix, and raised its 2022 forecast for the second time in four months.

Shingrix generated sales of £760 million (S$1.23 billion) compared with the GSK-compiled analyst consensus forecast for £685 million.

Although demand for the vaccine suffered as adult immunisations took a hit during the first pandemic years, sales have rebounded as Covid pressures have eased.

The British drugmaker - now solely focused on vaccines and medicines months after spinning off of its consumer health unit - reported third-quarter adjusted profit of 46.9 pence (S$0.76) per share on sales of about £7.83 billion, compared with analysts' consensus forecasts of 40.1 pence and £7.32 billion.

The company now expects 2022 sales to rise between 8 per cent and 10 per cent and adjusted operating profit to increase by 15 per cent to 17 per cent, excluding any contributions from its Covid-19 solutions business.

In July, GSK had predicted 2022 sales growth of 6 per cent to 8 per cent and adjusted operating profit to climb by 13 per cent to 15 per cent, both increases on forecasts issued in February.

GSK said it had incurred a charge of £45 million in the third quarter, primarily reflecting provisions for increased legal fees related to heartburn drug Zantac.

GSK, alongside other drugmakers, is embroiled in US litigation over Zantac, where thousands of cases have been filed over allegations the compound contains a probable carcinogen.

Originally marketed by a forerunner of GSK, Zantac has been sold by several companies at different times, including Pfizer , Boehringer Ingelheim and Sanofi as well as a plethora of generic drugmakers.

Shareholders fear a worst-case scenario where costs run into billions of dollars, as happened in cases involving Merck & Co's painkiller Vioxx and Bayer's glyphosate-based weedkiller. REUTERS

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