(Sharecast News) - Shares of GlaxoSmithKline slumped on Wednesday after the pharmaceuticals giant said it expects 2021 earnings to decline, as it reported growth in revenues and profit for 2020.
Glaxo said group turnover rose by 3% at constant exchange rates to £34bn, with pre-tax profit up 16% to £6.97bn.
The company said it remains on track for the separation of its business into standalone biopharma and consumer healthcare companies next year.
It also provided guidance for 2021, saying it expects a decline of mid to high-single digit percent adjusted earnings per share at constant exchange rates.
"For our vaccines business, we now anticipate further disruption during the first half of the year, given governments' prioritisation of Covid-19 vaccination programmes and the resurgence in late 2020 of the pandemic," it said.
"This is expected to impact adult and adolescent immunisations, including Shingrix, notably in the US. Despite this short-term impact we remain very confident in demand for these products, and expect strong recovery and contribution to growth from Shingrix in the second half of the year. We expect vaccines revenue for 2021 to grow flat to low-single digits."
Chief executive officer Emma Walmsley said Glaxo had delivered its guidance for 2020, offsetting the significant impact of the pandemic on adult vaccinations, with strong performances of new products and effective cost control.
"Importantly, progress against our strategic goals remains firmly on track," she said. "We are building a high value biopharma pipeline, have substantially integrated our Consumer JV and have delivered all our first year targets for our two year separation programme. This means we are in a strong position to launch new competitive, standalone biopharma and consumer healthcare companies in 2022."
At 1235 GMT, the shares were down 4% at 1,314p.
Earlier in the day, GlaxoSmithKline announced a new €150m collaboration with Germany's CureVac to develop a vaccine to combat emerging variants of Covid-19.
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