GSK shares up on vaccine hopes

Shares in GlaxoSmithKline rose 2% after the pharmaceutical giant unveiled solid full-year results. Turnover for the year rose by 5% at constant exchange rates to £30.3 billion – up 14% excluding the decline of Covid-related product sales. Meanwhile, profits increased by 9% to £6.1 billion (£5.6 billion in 2022).

Vaccines sales rose by 25% for the full year to £9.9 billion - 24% excluding Covid-related sales – while full-year sales of shingles vaccine Shingrix increased by 17% to £3.4 billion. Indeed, Shringrix sales grew by 23% to £908 million in the fourth quarter, delivering its highest ever level of sales. New respiratory vaccine Arexvy generated revenues of £1.2 billion in the full year. Arexvy is performing well since launch - already outselling rival Pfizer’s product Abrysvo and expected to hit blockbuster status. The product delivered £709mn of sales in the third quarter of 2023 alone. Analysts think this product alone could deliver a turnaround in the company’s fortunes.

Glaxo: 12 new product launches from 2025

Meanwhile, the development pipeline at Glaxo is ramping up at an impressive pace, with 71 vaccines in its development stable and more than 10 major products set to launch from 2025.

“GSK delivered excellent performance in 2023, with clear highlights being the exceptional launch of Arexvy and continued progress in our pipeline,” Emma Walmsley, chief executive officer at GSK told investors. “We are now planning for at least 12 major launches from 2025, with new vaccines and specialty medicines for infectious diseases, HIV, respiratory and oncology.”

“As a result of this progress and momentum, we expect to deliver another year of meaningful sales and earnings growth in 2024, and we are upgrading our growth outlooks for 2026 and 2031. We remain focused on delivering this potential - and more - to prevent and change the course of disease for millions of people.”

Glaxo hikes its long-term earnings guidance

GSK reiterated its near-term earnings expectations of 2024 turnover growth of 5% to 7%; adjusted operating growth of between 7 to 10% and adjusted EPS growth of 6% to 9%. However, the company has also increased its earnings guidance for the longer term. Management now expects a compound annual growth rate in sales of more than 7% and a CAGR of more than 11% in adjusted operating profits between 2021 to 2026. GSK has also raised its forecasts for sales in 2031 to over £38 billion. The guidance is at constant exchange rates and excludes Covid-19 related products.

The shares are up 12% this year to 1586p but have largely underperformed rival AstraZeneca’s, which had more success with its Covid vaccine. However, with a strong pipeline and its respiratory and shingles vaccines delivering decent sales, Glaxo stock could be worth watching. Analysts at broker Berenberg currently have a price target of 1,650p.

Past performance is not a guide to future performance