(Alliance News) - GlaxoSmithKline PLC on Wednesday posted first-half earnings growth despite seeing a slight slip in second quarter revenue as its Vaccines business was disrupted by Covid-19.
Revenue in the six months to June 30 was 8.0% higher year-on-year at USD16.71 billion from USD15.47 billion. This helped push pretax profit up 75% to GBP4.48 billion from GBP2.56 billion for the half.
Second quarter revenue slipped 2.4% to GBP7.62 billion but quarterly pretax profit more than doubled to GBP2.64 billion. This was helped by GSK booking GBP1.61 billion in other operating income, compared to expenses of GBP63 million a year ago.
"As expected, our performance this quarter was disrupted by Covid-19, particularly in our Vaccines business, as visits to healthcare professionals were limited due to lockdown measures," Chief Executive Officer Emma Walmsley said.
GSK held its quarterly dividend at 19 pence per share and plans to maintain its annual payout at 80p.
"We continue to believe that multiple options will be needed to prevent and treat Covid-19 and are working at pace with our partners to develop potential adjuvanted vaccines and therapeutics to fight the virus. At the same time, we have made strategic investments in next-generation vaccine and antibody technologies, most recently through our new collaboration with CureVac," Walmsley added.
Earlier Wednesday, Sanofi SA and GSK said they reached an agreement, subject to final contract, with the UK government for the supply of up to 60 million doses of a Covid-19 vaccine.
The vaccine candidate - developed by Paris-based pharmaceutical company Sanofi in partnership with Brentford, England-based GSK - is based on the recombinant protein-based technology used by Sanofi to produce an influenza vaccine, and GSK's pandemic adjuvant technology.
Roger Connor, president of GSK Vaccines, said: "We believe that this adjuvanted vaccine candidate has the potential to play a significant role in overcoming the Covid-19 pandemic, both in the UK and around the world."
Looking ahead, Glaxo maintained its guidance of annual adjusted earnings per share falling between 1% and 4% at constant currency.
"While we are maintaining our 2020 Adjusted EPS guidance, there remain notable risks to business performance over the balance of the year. In particular, the outcome is dependent on the timing of a recovery in vaccination rates, particularly in the US, which we anticipate in the third quarter. If we were to experience a delay in this recovery we could see a significant impact in 2020. In the case of, for example, a three month delay, the impact on adjusted EPS would be up to 5 percentage points," GSK said.
Adjusted EPS in the second quarter tumbled 37% to 19.2p. For the first half, it fell 6% to 56.9p.
Shares in the company were 2.1% lower at 1,570.20p each in London on Wednesday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
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Glaxosmithkline (GSK)