LONDON (Alliance News) - GlaxoSmithKline said Wednesday it is taking new approach to research & development by partnering with genetic profiling company 23andMe Inc, as it reported a strong set of interim results.
GSK was the second best performer in London's FTSE 100 index on Wednesday with shares up 1.6% at 1,581.00 pence.
23andMe has more than 5 million customers who send genetic samples to the company which are then tested against its extensive genetic database. The samples are added to that database, increasing its accuracy.
GSK and 23andMe have signed an exclusive four-year collaboration agreement in which Glaxo will use 23andMe's extensive database to improve its understanding of diseases, determine which patients will respond best to treatments, and more effectively recruit and identify patients for clinical studies.
The collaboration agreement can be extended for a fifth year. If this occurs, GSK will then become an exclusive collaborator of 23andMe for drug targeting programmes.
Glaxo also intends to invest in machine learning and use computers to assess new assets. The company has said it will invest in gene editing technologies such as CRISPR.
Glaxo expects to launch two new dual therapy treatments, one for HIV and another to treat a type of bone marrow cancer, before the end of 2020. Past that point Glaxo said it "expects to launch multiple medicines from its promising, early-stage...portfolio."
The announcements came as Glaxo released its second quarter and first half results. For half-year ended June 30, the company's pretax profit was GBP1.72 billion, up 25% from GBP1.37 billion the year before.
The result was weighted toward the first quarter, with the second quarter contributing GBP614 million to profit. This was nonetheless an improved performance over the 2017 second quarter when it recorded a GBP178 million loss.
The company's revenue reduced in the first half to GBP14.53 billion from GBP14.70 billion. The company's second quarter contributed GBP7.31 billion to first half revenue.
Glaxo declared a 19 pence per share dividend for the second quarter and said that it continues to expect full dividend dividend to total 80p per share.
Moving forward, Glaxo upgraded its full-year expectations following the successful launch of its shingles vaccine Shingrix, as well as increased earnings from its recent buyout of Novartis International AG's stake in a joint venture.
The healthcare company expects 2018 adjusted earnings per share growth of between 7% and 10% at a constant exchange rate provided a generic competitor to the company's asthma drug Advair is not introduced in the US.
If a generic to Advair is introduced, then Glaxo expects annual adjusted earnings per share growth of between 4% and 7%.
"We are today upgrading our guidance for constant exchange rate growth in adjusted earnings per share for 2018. This reflects increased sales expectations for Shingrix, the positive effect of the completed consumer healthcare buyout as well as the delay of a potential generic version of Advair in the US...We remain increasingly confident in our ability to deliver mid to high single digit growth in adjusted earnings per share," Glaxo Chief Executive Emma Walmsley said.
Glaxo spent GBP925 million on research and development in the second quarter, bringing its half-year expenditure to GBP1.83 billion versus GBP2.22 billion the year prior.
The company announced a new restructuring programme which aims to deliver GBP400 million in annual cost savings by 2024. The restructuring is expected to cost GBP1.7 billion, comprised of a GBP800 million cash cost and a GBP900 million non-cash cost.
The savings made by the programme are intended to fund Glaxo's research & development costs.
In its most recent quarter, ended June 30, the company's vaccines business saw the most improvement, with turnover up 13% at an adjusted earnings rate to GBP1.25 billion. This was led by sales of GSK's shingles vaccine Shingrix in the US, alongside an increasing demand for hepatitis vaccines.
In both the US and Canada, Shingrix recorded sales of GBP167 million in the second quarter of 2018 and achieved a 98% market share. The company expects its Shingrix sales to be between GBP600 million and GBP650 million in 2018, which was a significant factor in GSK's move to upgrade its guidance for the year.
At an adjusted earnings rate, Glaxo's pharmaceutical sales dropped 3% to GBP4.23 billion and consumer healthcare sales declined by 1% to GBP1.83 billion. On an adjusted earnings basis, therefore, GSK's vaccines business was its only improver in terms of sales performance.
The US was also the company's only region to show improvement on that basis, with turnover up 2% at GBP2.79 billion while European and international sales declined.
Glaxosmithkline (GSK)
