* Q2 adjusted EPS 28.1 pence vs consensus 19.9 pence
* Sees FY adj EPS at better end of guidance range
* Progress with COVID-19 adjuvant, antibody treatment
(Writes through with CEO, analyst comment, detail)
By Pushkala Aripaka and Alistair Smout
July 28 (Reuters) - GSK forecast 2021 earnings at
the better end of its guidance range on Wednesday, buoyed by a
recovery in routine visits to doctors and sales of its COVID-19
vaccine booster that helped the drugmaker beat second-quarter
profit expectations.
But rising debts, lingering effects of the pandemic and
longer-term worries about the British company's drugs pipeline
saw its shares hand back initial gains.
Despite being the world's biggest vaccine maker by sales,
GSK has fallen behind some rivals in combatting COVID-19,
focusing on producing an adjuvant to boost the immune response
of others' shots rather than making its own vaccine.
After a project with Sanofi fell short of hopes
last year, GSK reported progress in the second quarter, with 258
million pounds ($358 million) in adjuvant sales. The duo's
vaccine is now in late-stage trials and they hope for approvals
by the end of the year.
GSK and U.S. partner Vir also announced a deal to
supply their antibody-based treatment for COVID-19 to the
European Union.
The British company, which is spinning off its consumer
health arm to focus on improving its pharmaceuticals business
with incoming funds, said it was hopeful of the positive
momentum running into the second half, pushing full-year
earnings towards the better end of its forecast range.
GSK has said it expects adjusted earnings will decline by a
mid to high-single digit percentage this year, not including any
COVID-related sales.
But some analysts remained concerned about the challenges
ahead, with Hargreaves Lansdown's Nicholas Hyett pointing to
"poor levels of cash generation" and rising debt.
And while Citi analysts noted "upside potential" to
full-year earnings guidance, they said their focus remained on
GSK's pipeline of new drugs.
Pressure to show sustainable growth has mounted on Walmsley
after years of underperformance at the pharmaceuticals business.
GSK has also locked horns with activist investor Elliott over
its future after the planned spin-off next year.
GSK shares, which lost a quarter of their value in 2020,
were down about 1% at 1,386.2 pence by 1240 GMT, after initially
rising as much as 2% on the results.
A 49% jump in vaccine sales to 1.57 billion pounds and
growth in newer medicines helped GSK post adjusted quarterly
earnings of 28.1 pence per share, blowing past analysts'
estimate of 19.9 pence. Overall sales of 8.1 billion pounds were
also ahead of a 7.56-billion-pound consensus https://www.gsk.com/en-gb/investors/analyst-consensus/analyst-consensus.
However, GSK forecast revenues from vaccines over the full
year would be broadly flat, even as some markets such as the
United States open up to routine vaccinations, because COVID-19
inoculation rates are lagging in other parts of the world.
($1 = 0.7208 pounds)
(Reporting by Pushkala Aripaka in Bengaluru and Alistair Smout
in London
Editing by Mark Potter)