GlaxoSmithKline shares rose 2% after the pharmaceutical giant reported strong annual results. Revenue for the year rose 5% in consistent currencies to £30. 3 billion, representing a 14% decline in sales of Covid-related products. Meanwhile, profits rose 9% to £6. 1 billion (£5. 6 billion in 2022).
Full-year vaccine sales rose 25% to £9. 9 billion (24% excluding Covid-related sales) while full-year sales of the shingles vaccine, Shingrix, rose 17% to £3. 4 billion. In fact, Shringrix’s sales rose 23% to £908 million in the fourth quarter, providing its highest selling point on record. The new respiratory vaccine Arexvy generated profits of £1. 2 billion for the full year. Arexvy has done well since its launch: it already outsells rival Pfizer’s Abrysvo product and is expected to succeed in blockbuster status. The product generated £709 million in sales in the third quarter of 2023 alone. Analysts believe that this product alone can change the company’s fortunes.
Meanwhile, the progression process at Glaxo is accelerating at an impressive pace: 71 vaccines in progress and more than 10 primary vaccines are expected to be rolled out starting in 2025.
“GSK delivered functionality in 2023, with the highlights of Arexvy’s exceptional launch and the continued progress of our portfolio,” Emma Walmsley, lead executive at GSK, told investors. “We now expect at least 12 primary launches starting in 2025, with new vaccines and specialty drugs for infectious diseases, HIV, respiratory diseases and oncology. “
“With this progress and momentum, we expect to achieve another year of significant sales and profit expansion in 2024, and we have our prospects for expansion for 2026 and 2031. We remain focused on learning this perspective, and more, to save you and replace the course of disease for millions of people.
GSK reiterated its near-term earnings expectations of a 2024 earnings expansion of between 5% and 7%; adjusted operating expansion of 7% to 10% and adjusted EPS expansion of 6% to 9%. However, the company also raised its long-term profit forecast. Management now expects a compound rate of annual sales expansion of more than 7% and a CAGR of more than 11% in adjusted operating profit between 2021 and 2026. GSK also raised its 2031 sales forecast to more than £38 billion. Forecasts are based on consistent exchange rates and exclude Covid-19-like rates.
Shares are up 12% this year at 1586 pence but have underperformed rival AstraZeneca, which has had more good luck with its Covid vaccine. However, with a strong product portfolio and decent sales of its respiratory and shingles vaccines, Glaxo’s inventory is worth watching. Analysts at Berenberg broker currently have a price target of 1,650 pence.
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