GSK and AstraZeneca reveal Covid-19 breakthrough ahead of Q1 results

GlaxoSmithKline (GSK) and AstraZeneca recently revealed major breakthroughs in the fight against the Covid-19 crisis, helping to support their respective share prices ahead of their first quarter (Q1) results next week.

Earlier this month, AstraZeneca said it was fast-tracking a clinical trial for its blood cancer drug Calquence, with the drug maker hoping that it will improve severely ill patients chances of surviving the coronavirus.

Meanwhile, its rival GSK announced a partnership with French drug maker Sanofi, with the pair working together to manufacture a Covid-19 vaccine.

If successful, the pair’s capacity will allow them to manufacture hundreds of millions of doses that are likely to be required worldwide.

Sanofi will contribute its S-protein Covid-19 antigen, which is based on recombinant DNA technology, while GSK will contribute its proven pandemic adjuvant technology to the collaboration.

The use of an adjuvant can be of particular importance in a pandemic situation since it may reduce the amount of vaccine protein required per dose, allowing more vaccine doses to be produced and therefore contributing to protect more people.

‘By combining our science and our technologies, we believe we can help accelerate the global effort to develop a vaccine to protect as many people as possible from Covid-19,’ GSK CEO Emma Walmsley said.

Clinical trials for the vaccine are expected to begin later this year.

GSK and AstraZeneca shares rally ahead of Q1 results

Since hitting a low of £13.74 a share on 23 March, GSK shares have shown signs of recovery, with the stock climbing 21% over the last five weeks to trade at £16.80 a share as of 12:30 (GMT) on Thursday.

Meanwhile, AstraZeneca has climbed more than 18% over the same period, with the stock up 5% on a year-to-date basis, outperforming the broader market with the FTSE 100 24% down since the start of the year.

Both drug makers will unveil their Q1 results on Wednesday 29 April, with their performance in 2020 heavily dependent on the severity of the economic fallout from the Covid-19 pandemic.

AstraZeneca is looking to increase its total revenue by a ‘high single-digit to a low double-digit percentage’ and its core earnings per share (EPS) is forecast to increase by a ‘mid- to high-teens percentage’, according to its previous guidance.

GSK is expecting adjusted EPS to decline by -1% to -4% CER and is targeting a dividend pay-out of 80p per share in 2020.

Investors will be interested to see the impact of the coronavirus on both drug markers performance over their first three months of trading, though most companies guidance this year is heavily weighted towards the latter half of 2020.

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