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GSK became the latest pharmaceutical group to raise its outlook for the year thanks to strong sales of its cancer and HIV drugs, even as it cut expectations for its vaccines business.
The UK pharmaceutical group reported turnover of £7.9bn in the first quarter of 2024, up by 10 per cent and ahead of analysts’ estimates. Core operating profit rose by 16 per cent year on year to £2.5bn.
The group’s HIV drugs and small number of oncology medicines performed well, making it the latest European pharma company to raise guidance in this reporting cycle, thanks to strong sales of innovative medicines. AstraZeneca, Novartis, Roche and Sanofi have also boosted forecasts.
“Sales grew in all areas, with specialty medicines in particular benefitting from new product launches in oncology and HIV,” said chief executive Emma Walmsley.
However, the British drugmaker reported lower than expected sales of its new respiratory syncytial virus vaccine, due to the seasonal nature of the cold-like virus. It is also expecting fewer sales of the RSV vaccine Arexvy this year, following a decision by public health officials in June to narrow the age recommendation for the drug.
The vaccine for the flu-like virus quickly made more than $1bn in revenue to reach blockbuster status after its launch last year. But last month a US health committee recommended more limited use of the vaccines than expected for the next winter season, in a blow to GSK.
The drugmaker now expects its vaccines business to grow by a low-to-mid single-digit percentage, from an earlier expectation of high single-digit to low double-digit percentage growth. Shares fell 2 per cent in early trading in London on Wednesday.
GSK said it expected sales of speciality medicines such as HIV drugs and its general medicines to “more than offset” lower vaccine sales.
It now expects revenue to grow by 7 to 9 per cent this year, up from previous guidance of 5 to 7 per cent. Core operating profit is set to rise by 11 to 13 per cent, compared with a previous forecast of 9 to 11 per cent.
The company has also suffered a recent blow from litigation linked to Zantac, its allegedly carcinogenic heartburn drug launched in the 1980s.
A court in Delaware admitted scientific experts to testify that there was a link between plaintiffs’ cancer and the drug, wiping 10 per cent off shares in June.
GSK has struck a string of undisclosed settlements with plaintiffs and raised its funds for legal costs from £267mn at the end of 2023 to £454mn at the end of June.
