The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
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
Pop goes the BOOOOOMMMM
After all the excitement and all the chatter and the RNS and the conspiracy theories we find ourselves with the SP a little lower than it started the week. Patience is called for. Perhaps when we have the next trading update with an improved sales performance an uptick in the SP will be sustained.
GSK has received a buy recommendation and a healthy price target upgrade from analysts at Deutsche Bank, which has the UK pharma as a top pick in the sector.
Deutsche Bank’s target price for GSK rises to 1850p from 1700p
What was interesting in the RNS from my perspective was the comment from Jeff Needham Chairman of FUM “…as we continue to monetise our key asset, Eroxon…” The company is in play and now it’s a question of when and how much FUM will fetch.
Jeffries suggests GSK is “deeply discounted” as it lifted its recommendation to buy from hold. They estimate that GSK will pay between $3bn-$4bn to settle the Zantac litigation within the coming months. The company’s growth profile is under appreciated and the current share price offers attractive risk reward. Jeffries raises its target price on GSK by 23% to 1900 pence from 1550 pence.
RBC capital markets initiates coverage on 3i with outperform rating and £25.50 price target.
Noting 3i has a healthy track record on total shareholder return, with a compound annual growth rate of 18% over the last ten years. Stating they expect growth in the discount segment plus a strong and proven store expansion strategy to drive multi year growth for Action.
They see good value in 3i at current levels given its growth and strong balance sheet, differentiated long term strategy and defensive asset allocation.
The share price performance of 3i over the last 14 months has been simply stunning. Three to four years ago I started seriously buying significant numbers of shares in 3i due to their excellent CEO, the relentless focus on shareholder returns and the delivery of outstanding sales and profit performance quarter after quarter. Two years ago I sold 90% of my SSE holding, 100% of my National Grid holding and 100% of Vodafone and invested all the proceeds in 3i. What we are now witnessing is the compound effect of the groundwork being done on Action over a decade. The leadership have made 110 times their original investment in Action. They believe they can get 200 times the value of their original investment over the next 2 to 5 years. This would result in the share price rising to just under £30 per share. If the current CEO stays the course I for one won’t be cashing in anytime soon.