GSK 'likely' to face HIV sales slowdown, UBS downgrades

(Sharecast News) - UBS thinks GSK shares will struggle to perform in the near-term if there is nervousness around its ViiV HIV business. ViiV has been a major growth driver over the past few years and supported group earnings in the face of challenges such as the decline of Advair sales and a lack of pharma pipeline prospects.With rising competition on ViiV and patient switching into other treatments becoming "a real problem", there is now investor concern over ViiV performance in 2019, UBS said, coming at the same time as questions over whether the pharma division can deliver.Given the market's sensitivity to this, UBS analysts conclude that 2019 consensus estimates are "still slightly too high" and HIV revenues are now forecast to be "fairly flat", while "knock on impacts" further out result in a new target price of 1650p. We remain optimistic about the turnaround at GSK in the long-term but think the shares will struggle to perform in the near-term if there is nervousness around ViiV. We transfer coverage to Laura Sutcliffe and downgrade to Neutral."Dual therapy will be slow burn, 2019 is already here GSK hopes that its new products containing two drugs instead of the current norm of three can offer improved long term safety but doctors are wary of therapy de-intensification. Surveys conducted by GSK suggest that acceptance is increasing but it is clear there is a substantial confidence gap between GSK's position and the market's."The sales ramp-up predicted take time, "so can't provide a meaningful fix in '19".UBS downgraded the share to 'hold' from 'buy'.