The driver for the increased second quarter guidance was the increased sales of Shingrix (recombinant zoster vaccine), a vaccine to prevent shingles and post-herpetic neuralgia. GSK outlined how sales of the product doubled to £731m ($882m), after Shingrix had experienced supply shortages due to the COVID-19 vaccination programs.
Overall, the Q2 results showed the company recorded total sales of £6.9bn ($8.4bn), representing growth of 19% on Q2 2021 figures. The sales were attributed to £2.7bn in speciality medicines sales, £1.7bn in vaccines, and £2.5bn in general medicines. However, total operating profit was down from £1.2bn in Q2 2021 to £1bn in this quarter.
In a statement on the results, Emma Walmsley, CEO of GSK, called attention to the efforts made to strengthen the company’s pipeline to deliver long-term growth.
“These improvements in R&D and operating performance, together with a strengthened post-demerger balance sheet, create new capacity and flexibility for GSK to invest in growth and innovation for patients and shareholder,” Walmsley said.
An example of the investment in growth was provided through the company’s acquisition of Affinivax, which could cost a total of $3.3bn, should milestones be hit. Affinivax will strengthen GSK’s pipeline of vaccines and add an advanced pneumococcal vaccine candidate through AFX3772.
AFX3772 is expected to start Phase III trials in the short-term and could set up GSK to rival Pfizer’s Prevnar franchise in the pneumococcal space, should it succeed in trials and gain approval.
Managing demerger
The biggest news for GSK and the biggest European stock listing for a decade occurred in mid-July, after the company spun-out its consumer health business, which is now known as Haleon. The new business will focus exclusively on consumer healthcare products, such as its Sensodyne, Panadol and Advil brands.
Haleon has a market capitalization of approximately £29bn and GSK will retain an aggregate ownership of 13.5%, as well as receiving a £7.1bn dividend payment from the demerger process.
As previously mentioned, Walmsley hinted that GSK’s post-demerger balance sheet would provide the company ‘new capacity’ and ‘flexibility’ to invest in growth and innovation, as a now dedicated drug maker.
COVID tailwinds falter
Similar to many other pharma companies that achieved success through the marketing of COVID-19 vaccines or treatment, GSK confirmed that sales due to the pandemic would fall and that the bulk of sales expected in 2022 had already been achieved in the first half of the year.
GSK’s Xevudy (sotrovimab) was approved at the end of last year for the early treatment of COVID-19 and managed to achieve sales of £446m in Q2; however, full year guidance excludes impact from further sales of the product.
