Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

GSK more upbeat on profits and COVID, investors not sure

07/28/2021 | 10:20am EDT
FILE PHOTO: A GSK logo is seen at the GSK research centre in Stevenage

(Reuters) -GSK forecast 2021 earnings at the better end of its guidance range on Wednesday, buoyed by a recovery in routine visits to doctors and sales of its COVID-19 vaccine booster that helped the drugmaker beat second-quarter profit expectations.

But rising debts, lingering effects of the pandemic and longer-term worries about the British company's drugs pipeline saw its shares hand back initial gains.

Despite being the world's biggest vaccine maker by sales, GSK has fallen behind some rivals in combatting COVID-19, focusing on producing an adjuvant to boost the immune response of others' shots rather than making its own vaccine.

After a project with Sanofi fell short of hopes last year, GSK reported progress in the second quarter, with 258 million pounds ($358 million) in adjuvant sales. The duo's vaccine is now in late-stage trials and they hope for approvals by the end of the year.

GSK and U.S. partner Vir also announced a deal to supply their antibody-based treatment for COVID-19 to the European Union.

The British company, which is spinning off its consumer health arm to focus on improving its pharmaceuticals business with incoming funds, said it was hopeful of the positive momentum running into the second half, pushing full-year earnings towards the better end of its forecast range.

GSK has said it expects adjusted earnings will decline by a mid to high-single digit percentage this year, not including any COVID-related sales.

But some analysts remained concerned about the challenges ahead, with Hargreaves Lansdown's Nicholas Hyett pointing to "poor levels of cash generation" and rising debt.

And while Citi analysts noted "upside potential" to full-year earnings guidance, they said their focus remained on GSK's pipeline of new drugs.

Pressure to show sustainable growth has mounted on Walmsley after years of underperformance at the pharmaceuticals business. GSK has also locked horns with activist investor Elliott over its future after the planned spin-off next year.

GSK shares, which lost a quarter of their value in 2020, were down about 1% at 1,386.2 pence by 1240 GMT, after initially rising as much as 2% on the results.

A 49% jump in vaccine sales to 1.57 billion pounds and growth in newer medicines helped GSK post adjusted quarterly earnings of 28.1 pence per share, blowing past analysts' estimate of 19.9 pence. Overall sales of 8.1 billion pounds were also ahead of a 7.56-billion-pound consensus https://www.gsk.com/en-gb/investors/analyst-consensus/analyst-consensus.

However, GSK forecast revenues from vaccines over the full year would be broadly flat, even as some markets such as the United States open up to routine vaccinations, because COVID-19 inoculation rates are lagging in other parts of the world.

($1 = 0.7208 pounds)

(Reporting by Pushkala Aripaka in Bengaluru and Alistair Smout in LondonEditing by Mark Potter)

By Pushkala Aripaka and Alistair Smout


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
SANOFI 0.61% 82.73 Real-time Quote.5.12%
VIR BIOTECHNOLOGY, INC. -9.86% 45.99 Delayed Quote.71.73%
Latest news "Economy & Forex"
02:51aInvestec says half-year profits could double
RE
02:43aUK appealing to former drivers to tackle shortage, minister says
RE
02:43aDon't panic buy; a winter of discontent isn't looming, UK minister says
RE
02:43aGM invests in Chinese autonomous driving startup Momenta
RE
02:40aBritain discussing rise in gas and electricity price cap - minister
RE
02:33aUK pub operator Mitchells sales top pre-pandemic level on pent-up demand
RE
02:30aCopper slips as Fed hints at tapering plan
RE
02:25aIntel, Apple, carmakers to attend White House meeting on chip shortage
RE
02:17aItaly's Enel spins off new firm for digital grid services - report
RE
02:04aIMF sees Gambia's GDP returning to 4.9% growth this year
RE
Latest news "Economy & Forex"