FY profit forecast raised to 8-10%
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Q1 sales, profit beats expectations
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CEO hopes to roll-out RSV shot for 50-59 yr olds for next season
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Shares up 1.8% at 0950 GMT
May 1 (Reuters) - GSK raised its full-year profit forecast on Wednesday on strong demand for its common respiratory vaccine and specialty HIV medicines, though it expects sales growth to slow in the second half.
CEO Emma Walmsley's strategy has focussed on vaccines, cancer and infectious diseases and a shift in the company's HIV focus to long-acting treatment and prevention therapies. The strategy has paid off as GSK gears up for 12 launches from 2025.
The London-listed drugmaker said it expected a rise of 8% to 10% in annual adjusted earnings per share, up from the 6%-9% growth previously forecast. It expects 2024 sales to grow at the upper end of its 5% to 7% forecast range.
Sales of recently launched products such as respiratory syncytial virus (RSV) vaccine Arexvy and bone marrow cancer therapy Ojjaara have been strong since the start of 2024, while asthma drug Trelegy also performed better than expected, GSK said.
Arexvy has dominated the RSV vaccine market in the U.S. since its launch last year, outperforming sales of rival Pfizer's shot to have two-thirds market share in the first quarter. RSV, which typically causes cold-like symptoms, is a leading cause of pneumonia in toddlers and older adults.
Walmsley told journalists the company hoped to launch the shot for 50-59 year-olds before the start of the next RSV season, which includes about 15 million at-risk Americans.
GSK shares have risen more than 25% since the launch of its RSV vaccine in the U.S. in mid-August 2023. The FTSE 100 group's shares were up 1.8% to 1,703 pence by 0950 GMT.
The company also attributed its increased forecast to a successful royalty dispute appeal for ovary cancer drug Zejula in the first quarter.
It reported a first-quarter profit of 43.1 pence per share on sales of 7.36 billion pounds ($9.18 billion), beating analysts' forecasts for 37.3 pence earnings and sales of 7.07 billion pounds, a company-compiled consensus showed.
Sales growth was expected to slow in the second half, GSK said.
"In particular, second half 2024, compared to the same period in the prior year, is expected to be influenced by the 2023 launch dynamics and initial channel inventory build attributable to Arexvy. In addition, we expect the majority of Shingrix sales in China to be in the first half," it said in a statement.
GSK is also in the midst of a series of lawsuit settlements related to its discontinued heartburn drug Zantac in the United States, alleging the blockbuster medicine also sold by other companies, caused cancer.
"GSK reported growth in all key therapeutic areas, increased R&D spend, and strong consumer uptake for its RSV vaccine, Arexvy. As expected no update on Zantac today, but we expect news in the coming weeks on any settlement," said Lucy Coutts, investment director at wealth management firm JM Finn, which holds GSK shares.
The company took a provision of 312 million pounds in the first quarter for various legal liabilities, up from 267 million pounds in the Oct-Dec period.
GSK has not disclosed how much it expects to pay out for the thousands of Zantac cases still pending, but analysts have estimated total costs at about $5 billion.
Glaxosmithkline (GSK)
