GSK announced that it would face a decline in vaccine sales this year, following disappointing performances from its respiratory syncytial virus (RSV) and shingles vaccines in the third quarter. This news caused a significant drop in GSK's shares, which fell as much as 4.1%. The British pharmaceutical giant now anticipates a low-single-digit percentage decrease in vaccine sales for 2024, revising its previous forecast, which had projected growth in the low- to mid-single digits.
This adjustment marks the second downward revision of GSK's vaccine sales outlook this year, jeopardizing its plans to position this segment as a key driver of future growth. GSK CEO Emma Walmsley has encountered setbacks with the company’s RSV vaccine, Arexvy, as the U.S. public health agency recently narrowed the age recommendations for its use. Additionally, the agency has delayed recommending the vaccine for adults under 60, further complicating sales prospects. The current RSV season has also been weaker than anticipated, as U.S. authorities shifted their vaccination focus to other diseases, including COVID-19.
Sales figures reflect these challenges, with Arexvy sales plummeting by 72% to £188 million ($244.40 million) in the quarter ending September 30, falling short of market expectations of £238 million. Similarly, sales of the shingles vaccine Shingrix dropped 7% to £739 million, also below consensus estimates compiled by the company. Despite these setbacks, Walmsley reassured journalists that the company anticipates a robust medium- to long-term outlook for both Arexvy and Shingrix.
On a more positive note, GSK surpassed analyst expectations with reported core earnings per share of 49.7 pence on sales of £8.01 billion, compared to estimates of 43.6 pence on projected sales of around £8 billion. The company maintained its full-year total sales and earnings forecasts, with Walmsley expressing confidence in achieving its 2024 guidance and enhancing its outlook for 2026 and 2031. However, GSK did not provide any expectations for 2025.
Walmsley, who has been steering GSK since 2017, has refocused the company on cancer and infectious diseases to offset patent expirations and declining revenues from its existing bestsellers. Earlier this month, GSK reached a $2.2 billion settlement to resolve most lawsuits in the United States concerning its discontinued heartburn drug Zantac, which allegedly caused cancer. The company incurred a £1.8 billion charge in the quarter related to this settlement, indicating a significant financial impact.
While the settlement has allowed GSK to draw a line under the lawsuits that have adversely affected its stock for over two years, analysts express concern regarding the company’s vaccine segment. The declining sales of Shingrix in both the U.S. and China, combined with the underwhelming performance of RSV sales in the U.S., have raised new questions about GSK's future profitability and market standing.
As of 0958 GMT, GSK shares were down 3.9%, reaching their lowest point since November 2023, highlighting the ongoing uncertainty surrounding the company's performance and market strategy. The combination of legal challenges, shifting market dynamics, and fluctuating vaccine sales continues to cast a shadow over GSK's future growth prospects.
(Source:www.rte.ie)
This adjustment marks the second downward revision of GSK's vaccine sales outlook this year, jeopardizing its plans to position this segment as a key driver of future growth. GSK CEO Emma Walmsley has encountered setbacks with the company’s RSV vaccine, Arexvy, as the U.S. public health agency recently narrowed the age recommendations for its use. Additionally, the agency has delayed recommending the vaccine for adults under 60, further complicating sales prospects. The current RSV season has also been weaker than anticipated, as U.S. authorities shifted their vaccination focus to other diseases, including COVID-19.
Sales figures reflect these challenges, with Arexvy sales plummeting by 72% to £188 million ($244.40 million) in the quarter ending September 30, falling short of market expectations of £238 million. Similarly, sales of the shingles vaccine Shingrix dropped 7% to £739 million, also below consensus estimates compiled by the company. Despite these setbacks, Walmsley reassured journalists that the company anticipates a robust medium- to long-term outlook for both Arexvy and Shingrix.
On a more positive note, GSK surpassed analyst expectations with reported core earnings per share of 49.7 pence on sales of £8.01 billion, compared to estimates of 43.6 pence on projected sales of around £8 billion. The company maintained its full-year total sales and earnings forecasts, with Walmsley expressing confidence in achieving its 2024 guidance and enhancing its outlook for 2026 and 2031. However, GSK did not provide any expectations for 2025.
Walmsley, who has been steering GSK since 2017, has refocused the company on cancer and infectious diseases to offset patent expirations and declining revenues from its existing bestsellers. Earlier this month, GSK reached a $2.2 billion settlement to resolve most lawsuits in the United States concerning its discontinued heartburn drug Zantac, which allegedly caused cancer. The company incurred a £1.8 billion charge in the quarter related to this settlement, indicating a significant financial impact.
While the settlement has allowed GSK to draw a line under the lawsuits that have adversely affected its stock for over two years, analysts express concern regarding the company’s vaccine segment. The declining sales of Shingrix in both the U.S. and China, combined with the underwhelming performance of RSV sales in the U.S., have raised new questions about GSK's future profitability and market standing.
As of 0958 GMT, GSK shares were down 3.9%, reaching their lowest point since November 2023, highlighting the ongoing uncertainty surrounding the company's performance and market strategy. The combination of legal challenges, shifting market dynamics, and fluctuating vaccine sales continues to cast a shadow over GSK's future growth prospects.
(Source:www.rte.ie)
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