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Sales and profit beat. Specialty Med sales missed. General Meds sales missed. Vaccines sales beat. Costs under control.

Of the 12 key product sales drivers for Q1 2026 three met consensus and nine didn't. Ojjaara, Cabenuva, Benlysta, Nucala, Trelegy, Exdensur, Penmenvy and Jemperli all missed Q1 consensus sales. However I think Luke is playing the long game. With tough comparative quarters ahead (particularly versus monster Q3 last year) Luke is keeping the commercial powder dry. With Shingrix the main sales upside this quarter helped by a inventory build perhaps investors are not quite so impressed with the new product launches so far hence marking the SP down strongly today.

Broker saying FUM worth 123p is expecting revenues of £9.2m, gross profit of £5.9m and Net Income of £(3.1)m for 2024. The half year results will give us a strong indication of whether we are on track or not. For a change it will be FUM’s financial performance that will do the talking.

GLA FUMsters

Simon Borrows in his typically understated style last week said “Action had a good first half of 2024…We are confident that Action will perform well in the second half of 2024…The successful completion of another sizeable refinancing reflects Action’s impressive growth and strong cash generation. We have allocated part of the proceeds from this transaction to increase our holding in Action which we believe will benefit shareholders in the months and years to come.”

Anyone who follows this company knows this is five star investment focused on long term shareholder returns.

Citi lifted its price target to 3800p from 2650p implying around 25% upside. “We value 3i groups 55% stake in Action at £30bn. This is in line with 3i groups market cap and excludes upside from an expansion outside of Europe. We estimate 7% LFL sales growth until 2030 and 15% sales growth, while Actions fast inventory turnover and negative working capital makes growth self funding. We model 3i Group receiving £14bn of dividends from Action by 2031”

Take a step back and it’s been another good week for GSK. Depemokimab coming through on two phase III trials is massive. The market is circumspect but GSK leadership believe Depe will have sales the size of Shingrix and if approved will start rolling in next year. At peak this is forecast to be selling £1 billion a quarter 😳 We have won a Zantac case in Chicago. This is a big deal. I’m sure if we had lost this case the SP would have moved considerably more than it did today.

GLA 😊

Clearly SP reaction today was disappointing but not surprising, we saw the same response three months ago (at the announcement in Jan 24) only for the valuation to subsequently power higher.

1. Action is still going great guns with value growth of £3609m. Management said they have made 125X their initial investment. Assuming they still think they can get to 200X their original investment (highlighted in Nov CMD) that means the net asset value with rise by £106m x 75 or a cool £7.95bn over the next 2 to 5 years or £8.18 a share.

2. Royal Saunders is a keeper. This business is going to drive value for years to come, it increased in value by £256m last year.

3. European Bakery Group is beginning to show potential with value growth of £161m in last 12 months.

4. ten23health is also beginning to show potential with £60m value growth in last 12 months.

5. There were 9 value drainers should showed a value decline of over £20m each totalling an eye watering £452m decline. These need to be turned around or preferably sold.

GLA 😊

Reviewing actual sales £m vs consensus

Shingrix. 945. +40

Arexvy. 182. -9

Cabenuva. 213. -3

Dovato. 483. +11

Benlysta. 260. -31

Apretude. 54. -5

Nucala. 374. -18

Ojjaara. 52. +15

Jemperli. 80. +17

Top 9. 2643. +17

Shingrix beat due to public funding expansion and early supply to Zhifel

Dovato growing at 27% and leading oral 2DR

Ojjaara beat due to strong US launch and launched in UK and Germany in Q1 2024

Jemperli beat because it is growing >100% with continued strong momentum and growth.

Overall well received results and guidance increased 😊

I know I’m ever the optimist but I have a hunch it’s going to be a good quarter with a strong start to the year. If we also get any positive news on Zantac litigation or pipeline progress, particularly on Depemokimab or Camlipixant that would be icing on the cake.

GLA

Consensus estimates are out for Q1 24 for the top 9 products which will drive growth for the next two years. £m

Shingrix. 905

Arexvy. 191

Cabenuva. 216

Dovato. 472

Benlysta. 291

Apretude. 59

Nucala. 392

Ojjaara. 37

Jemperli. 63

Top 9. 2626

In Q1 last year the top 9 sold £1991m so growth of £635m (31.9%) is expected across these products. It’ll be interesting to see what next week brings.

GLA

The consensus forecast just published shows the sales growth expected for the top 9 GSK products by top analysts in 2024:

£m

Shingrix. 500

Arexvy. 372

Cabenuva. 339

Dovato. 332

Benlysta. 165

Apretude. 164

Nucala. 156

Ojjaara. 134

Jemperli. 128

Top 9. 2290

These products are also the biggest sales growth drivers in 2025 as well so achieving or exceeding the sales growth targets this year will be critical for the SP. In addition Camlipixant and Depemokimab are expected to launch in 2025 so pipeline progress on these assets this year will also be important for investor confidence.

An indication of the well received Capital Markets Day to investors last week is when it leads to broker upgrades :

UBS raises 3i Group price target to 3200 (2800) pence - ‘buy’

Bank of America raises 3i Group price target to 3055 (2850) pence - ‘buy’

Great to see broker forecasts start with a 3 😊

Another very well received Capital Markets Day (CMD) with the SP up a stunning £2.20 today. Outperforming peers, new growth markets in Italy, Spain, Slovakia and Portugal. Current trading 21% ahead of last year with 9.6% LfL sales growth for first 11 weeks of 2024. The store expansion plan is on track with 32 stores added year to date. Cash and cash equivalents at €1.1bn. A strong business with favourable economics driven by a strong management team. The estimate of delivering a 200X return on the initial Action investment mentioned in the November CMD is still on track. This would imply a NAV of £29.67. The 3i Action juggernaut continues to roll…

The Blenrep phase 3 DREAMM-8 trial met its primary endpoint of progression free survival with the regimen shown to significantly extend the time to disease progression or death versus the existing standard of care. The dataset has been unblinded early on the advice of its independent data monitoring committee. The readout comes just one month after GSK announced positive results from the DREAMM-7 trial. Armed with successes on two phase 3 trials GSK will be in discussion with the FDA about the reintroduction of the drug in the US.

Analysts at Citi anticipate risk adjusted Blenrep sales of £2.5bn in 2035.

No wonder GSK shares are up over 18% since the beginning of the year.

Citi upgrade is based not only on Blenrep’s under appreciated revenue potential of £2.5bn peak year sales but also the Zantac liability outlook RSV/Shingrix astute business development, increasingly positive ViiV outlook and GSK’s recent commercial and pipeline wins. As well as upgrading its rating from neutral to buy Citi upped its price target to 2100p from 1700p.

Moderna’s shares were falling after the biotech revealed data that might hurt its vaccines competitive position.

In a note that appears to have shaken investor confidence in the product on Thursday TD Cowen analyst Tyler Van Buren wrote the data suggests the efficacy of Moderna’s RSV vaccine may fall off more quickly over time than those of its competitors.

It “could negatively affect mRNA-1345’s profile if confirmed with additional data” Van Buren wrote.

Moderna’s shares dropped 5.7% on Thursday and were down another 6.4% Friday.

Perhaps we are witnessing a dose of buy on rumour, sell the news today with profit taking after the Q3 update. While there are a number of items in the update to keep investors wary (the wall of worry!) “some 2500 prices were reduced… macroeconomic conditions and global uncertainty are likely to have an impact… Action is carefully monitoring the situation in the Red Sea…” the results were impressive overall and the strength of the business is clear. Barclays who have had an excellent record in forecasting the 3i share price the last 2 years believe we will see the SP move appreciably higher to £28.10 and management called out 3 months ago the strength of Action business can get the SP to just under £30 in the next 2-5 years. Given what they have achieved over the last decade a great number of investor will hang on for the ride.

Top percentage gainer on the FTSE 100 after Barclays raises price target to 2810p. The performance of this share over the last 15 months from 1080p to 2494p has been STUNNING.

Citi raised its target price on GSK from 1535p to 1700p. The bank has now increased its core earnings per share estimates for 2030 to 2035 by between 19% and 43%. They particularly like the recent Bellus and Aiolos respiratory deals addressing de-risked targets in a core therapeutic area of competence for GSK. Citi has also raised its forecasts for ViiV - “assuming the next generation therapies with larger dosing windows translate into higher adoption rates”.

UBS raises GSK to ‘buy’ rating from ‘sell’ and increase price target from 1310p to 1860p

UBS cuts AstraZeneca to ‘sell’ rating from buy reducing its price target from 13000p to 10700p.

Ahead of GSK’s full year results, the stock trades at nine times earnings, compared with sector peers who trade at a multiple of 15. They continue to view the current discount to peers as unwarranted and largely attributable to misguided assumptions on the potential cost of Zantac litigation. This has disproportionately overshadowed the improved and increasingly attractive growth story GSK delivered in 2023.

The broker has lifted its target price from 1850p to 2000p and kept a ‘buy’ rating