GSK full-year results: where next for the share price?

GlaxoSmithKline (GSK) will unveil its full-year 2019 results on Wednesday, with investors hoping the drug maker will hit its targets after upgrading its guidance in October.

GSK expects full-year earnings per share to be flat year-on-year, up from the 3% - 5% decline that the group previously forecast.

Over the last nine months of trading, the pharmaceutical company has recorded strong sales, with it reporting revenues of £4.5 billon in Q3, up 3% year-on-year.

Sales were driven primarily from vaccines, up 15% to £2.3 billion in Q3, with its consumer healthcare unit also reporting strong growth, with revenues rising 3% to £2.5 billion over the period.

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Major brokerages all upgrade GSK shares in January

Analysts from major investment banks have all upgraded their price targets for GSK in January ahead of its full-year results, with Société Générale the most optimistic at £23.

Credit Suisse upped its price target to £18.60, with JP Morgan, Liberum Capital and UBS at £19, £19.30 and £19.50 respectively.

Based on GSK trading at £18.05 as of 16:25 (GMT) on Monday, analysts believe the stock has a potential upside of anywhere between 3% - 27%.

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GSK joins effort by big pharma to develop Coronavirus vaccine

On Monday, GSK announced that it will join forces with other major pharmaceutical companies around the world to develop vaccines for the new Chinese coronavirus.

The joint effort will see GSK make its established pandemic vaccine adjuvant platform technology available to enhance the development of an effective vaccine against the virus.

An adjuvant is added to some vaccines to enhance the immune response, thereby creating a stronger and longer lasting immunity against infections than the vaccine alone.

The use of an adjuvant is crucial in a pandemic situation since it can reduce the amount of antigen required per dose, allowing more vaccine doses to be produced and made available to more people.

‘Our adjuvant technology has previously been used successfully in the pandemic flu setting,’ GSK chief medical officer Tomas Breuer said.

‘It enables using only small quantities of the vaccine antigen which allows the production of more doses of the vaccine – a crucial advantage in a pandemic.’