GSK profit gets shingles vaccine boost in CEO’s first quarter

By Bhanvi Satija

LONDON, April 29 (Reuters) – GSK got a boost from its shingles vaccine to beat first-quarter profit and sales expectations on Wednesday, as pharmacies and hospitals stocked up on its pre-filled form.

But GSK shares slid 8.2% and were the top faller on the broader FTSE 100 index, on concerns about the “one-off” nature of the results, the first full quarter under new CEO Luke Miels. Shares were trading at 1,860.5 pence apiece at 1331 GMT.

James Eugene, research analyst at Verso Investment Management, said the fall was likely due to “quality concerns around the earnings beat (that) will be in question given that they were driven by one-off factors”.

The stock price has gained around a third since Miels was named in September and some 9% since he formally took over. Wednesday’s decline could wipe off a chunk of this year’s gains.

Miels was hired to convince investors that GSK can hit 2031 sales targets, boost its drug pipeline and navigate the looming 2028 patent expiration for its HIV medicine dolutegravir.

LONG-TERM REVENUE TARGET

Miels, who was previously chief commercial officer, is under pressure to show GSK’s research and development can deliver a long-term revenue target of over 40 billion pounds ($54 billion) by 2031. Analysts expect 35 billion pounds in sales that year.

GSK’s first-quarter revenue was 7.6 billion pounds, broadly in line with expectations.

Sales of GSK’s specialty medicines, which include its HIV business and cancer treatments, were also in line with estimates at 3.23 billion pounds.

Miels said he hopes to broaden the view of GSK beyond its HIV business and stressed the drugmaker is speeding up development of medicines, with 10 planned late-stage trials across its portfolio for this year.

Of those, five are trials of targeted cancer therapies licensed from China’s Hansoh Pharma, after strong early-stage data.

“To simplify how we work, we’re matching our best people and resources to the opportunities in front of us, and we’re employing AI to accelerate this,” Miels said.

GSK has carried out a granular review of more than 50 late-stage programmes that met certain thresholds, spanning oncology, HIV, and other parts of its portfolio that showed value for speeding up or expansion, he said.

A shortlist of selected programmes and the rationale behind them is planned to be shared in the second quarter.

Under Miels, GSK has increased bolt-on acquisitions, agreeing to buy U.S. biotech RAPT Therapeutics, which he said reflects the type of deal the company prefers.

GSK maintained its full-year forecast of 3% to 5% sales growth and core operating profit growth of 7% to 9%.

RECORD QUARTER FOR SHINGRIX

Eugene, whose firm holds GSK shares, said that Shingrix was the “standout performer” with 1.03 billion pounds in quarterly sales, compared with expectations of 851 million pounds.

Sales were helped by higher demand in European markets and the launch of the new pre-filled, more convenient format of the shot in the U.S. Barclays estimated stocking provided a benefit of 100 million pounds.

Miels said GSK has shifted its Shingrix strategy to focus on patients with other co-morbidities such as diabetes or heart conditions.

GSK posted core earnings per share of 46.5 pence for the three months ended March 31, compared with analyst expectations of 43.3 pence.

($1 = 0.7405 pounds)

(Reporting by Bhanvi Satija in London; Editing by Andrew Heavens, Louise Heavens, Barbara Lewis and Alexander Smith)