GlaxoSmithKline has beaten second-quarter profit expectations with the help of strong demand for its shingles vaccine, prompting the drugmaker to forecast a smaller fall in profit this year than originally anticipated.
GSK is a major employer in Munster — it employs around 1,700 people in Dungarvan, Co Waterford, Cork, Dublin, and Sligo, with 90% of the world’s Panadol produced in the Waterford site. GSK also produces Voltarol, Sensodyne and Corsodyl in its consumer health division.
Last year, GSK said it plans to close its Sligo site by 2021, where it manufactures skincare products, with the loss of 165 jobs.
The drugmaker is preparing to fold its consumer business into a joint venture with Pfizer — which includes Pfizer’s Advil painkillers and Centrum vitamins — but GSK doesn’t make consumer products at its Irish sites.
However, the latest results bode well for chief executive Emma Walmsley’s plans to rejuvenate GSK, which has included the spin-off or sale of a number of businesses since she took over in 2017 and began focusing on the company’s pharmaceuticals business. GSK now expects annual earnings for 2019 to decline by between 3% and 5%, an improvement from a previous forecast of a 5% to 9% fall at constant currency.
Shares of the Ftse 100 company edged lower after an initial spurt as Ms Walmsley outlined “another standout quarter” for the Shingrix vaccine, with sales more than doubling. “For at least the second quarter running, pharmaceutical sales were driven by the performance of Shingrix in the US,” said Andy Smith, analyst at Edison Investment research.
Sales of Shingrix soared to £386m (€433m) in the three-month period, above analysts’ expectations, due to continued strong uptake in the US as well as demand in Germany and Canada.
The performance of GSK’s vaccine unit is compensating for crumbling sales of its asthma drug Advair, which faces competition from a generic version of the treatment. Sales from Advair, which has long fuelled the company’s growth, fell 31% to £412m (€462m) in the quarter, missing analysts’ expectations.
“We think these are a solid set of results from GSK, however we aren’t going to get too carried away,” said Charlie Huggins, manager of the HL Select UK Income Shares fund, which holds shares in GSK.