GSK and AstraZeneca reveal COVID-19 breakthrough ahead of Q1 results
Britain’s largest drug makers revealed major breakthroughs in the fight against Covid-19 earlier this month, supporting their share prices ahead of their Q1 results next week.
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 chief executive officer (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 H2 of 2020.
How to trade stocks with IG
Looking to trade GSK and other stocks? Open a live or demo account with IG and buy (long) or sell (short) the asset using derivatives like CFDs in a few easy steps:
Create an IG trading account or log in to your existing account
Enter ‘Metro Bank’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
