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LONDON (Alliance News) - GlaxoSmithKline PLC on Wednesday posted a flat third quarter pretax profit and tightened annual outlook to upper end of its estimates due to higher than expected sales of its shingles vaccine.
In the three months to September 30, the pharmaceutical behemoth recorded pretax profit of GBP1.71 billion, broadly unchanged from the year before. Revenue grew to GBP8.09 billion from GBP7.84 billion.
Operating profit for the quarter increased to GBP1.91 billion from GBP1.88 billion due to sales growth in all three businesses units, favourable product mix and continued control of costs.
Consumer Healthcare was the only unit of the company to post a revenue reduction in the third quarter, as revenue dipped to GBP1.95 billion from GBP1.96 billion on declining sales of pain relief drug Panadol and the divestment of Horlicks malted milk drink and sports supplement MaxiNutrition brands in the UK.
Pharmaceuticals saw a modest improvement, with revenue of GBP4.22 billion for the period, up from GBP4.19 billion due to a growth in HIV drug sales and new respiratory products.
Vaccines showed the largest revenue increase, reaching GBP1.92 billion from GBP1.69 billion, predominantly led by sales in the US of shingles vaccine Shingrix, as well as a shortage of competitors for Hepatitis treatment.
The company's quarterly pretax profit was dented by negative currency movements, restructuring and integration costs as well as investments in promotion of products, partly offset by tight control of ongoing costs. Third quarter restructuring and integration charges totalled GBP283 million versus GBP266 million the year before.
Year-to-date, the FTSE100 listed company made pretax profit of GBP3.43 billion, up from GBP3.08 billion in the comparative year ago period, on a revenue of GBP22.62 billion and GBP22.55 billion, respectively. Operating profit for the first nine months grew to GBP3.93 billion from GBP3.58 billion.
For 2018, Glaxo is now predicting adjusted earnings per share growth of between 8% and 10% at constant exchange rates, regardless of whether a generic competitor for its Advair asthma drug is launched in the US in the year. Third quarter adjusted earnings per share totalled 35.5 pence, up 14% at constant exchange rates.
The improved forecast is based on higher sales of Shingrix, now predicted to be between GBP700 million and GBP750 million in 2018. Earlier, the company estimated annual Shingrix sales to be between GBP600 million and GBP650 million. Third quarter Shingrix sales totalled GBP286 million and year-to-date sales stood at GBP563 million.
"Strong commercial execution for key products and new launches, notably Shingrix, together with an effective focus on cost control is driving this improved performance," said Glaxo Chief Executive Emma Walmsley.
"Looking further ahead, we remain confident in our ability to deliver the group outlooks for sales and [earnings per share] growth we previously set for the period 2016 to 2020," Walmsley added.
Glaxo maintained its third quarter dividend at 19p per share and is aiming for 80p per share for 2018.
In a separate announcement on Wednesday, Glaxo announced results from ViiV Healthcare's BRIGHTE study of Fostemsavir, its drug for HIV patients, including those who are heavily-treated and failing on current regimens.
ViiV Healthcare is an HIV specialist company established in 2009 by Glaxo and Pfizer Inc.
54% of patients in the study achieved virolic suppression at 48 weeks of treatment with Fostemsavir as well as optimised background therapy. Moreover, patients saw higher T-cell counts, showing improvements to their immune systems.
A majority of patients taking the drug during the study experienced at least one adverse event, most commonly headache, nausea, and diarrhoea.
Moreover, 35% of study participants had serious adverse events, largely relating to infections, particularly in those patients who were immunocompromised. Of these, 3% were related to Fostemsavir.
Overall, 7% of participants in the study dropped out as a result of an adverse event.
"People living with HIV who participated in this study were failing on their current antiretroviral regimens and had few treatment options left available to them; we were encouraged to see that treatment with Fostemsavir resulted in both meaningful reductions in viral load and improvements in the health of their immune systems," said ViiV Healthcare Chief Scientific and Medical Officer John Pottage.
Regulatory approval for Fostemsavir will be sought in 2019.
Shares in Glaxo were down 1.7% at 1,511.10 pence each on Wednesday afternoon.
