Shingles vaccine boosts GSK as generic Advair bites

GSK’s first quarter sales beat estimates, helped along by shingles vaccine Shingrix and partly offsetting the effect of declining Advair sales.

Shingrix’s sales were £357 million, continuing the strong start for a vaccine that analysts have tipped to be a potential $1 billion+ blockbuster.

Shingrix is challenging Merck & Co.’s Zostavax to become the shingles vaccine of choice in the US and beyond. Trials have suggested that Shingrix can offer more protection than Zostavax and, importantly, could protect older adults who had already received Zostavax, the effects of which are known to diminish over time.

Sales of asthma treatment Advair, which has now lost patent protection in the US, fell 15% to £486 million, continuing the downward trend seen last year.

GSK has already been cutting the price of its brand to try to minimise the impact, but nevertheless said earlier this year that it expects profits could be hit by up to £800 million in 2019.

The company also expects profits to take a dent from its $5.1 billion takeover of cancer company Tesaro and its $4.2 billion licensing deal for a Merck KGaA cancer immunotherapy asset.

This has led GSK to stick to its previous estimates of a 5-9% decrease in earnings per share for the year.

Nevertheless, overall pharmaceutical sales were up 4% in the first quarter, aided again by respiratory and HIV.

Total new respiratory product sales were £631 million, an increase of 19%. This includes £87 million for COPD triple therapy Trelegy and £152 million for severe asthma drug Nucala.

Meanwhile, total HIV sales grew 7% to £1.1 billion, including sales for Juluca of £70 million.

CEO Emma Walmsley said: “We have made a strong start to 2019, which is an important year of execution for GSK, with growth in sales, operating margins and earnings per share in Q1, in line with our expectations.

“Strengthening our pipeline remains our number one priority and we reported positive data for several potential new medicines in HIV and Oncology during the quarter. I am also pleased to report that integration planning for our new proposed Consumer Healthcare business is going well and, subject to relevant approvals, we continue to expect to complete this transaction in the second half of the year. We look forward to building on the progress made this quarter.”