Global biopharma company GSK (GSK) delivered better-than-expected fourth-quarter sales and profit growth and raised its long-term guidance.

A strong finish means full-year performance came in at the upper end of upgraded guidance given at the end of the third quarter.

The market shrugged off the ‘beat and raise’ with the shares falling 1% in early trading, perhaps reflecting a strong performance over the last six months where the shares have gained 10% compared with a flat FTSE 100.

HOW DID THE COMPANY PERFORM?

Sales excluding Covid products increased 17% in the final quarter, pushing full-year sales up 14% to £30.1 billion in constant currencies.

Full-year adjusted operating profit increased 12% to £8.78 billion equating to a margin on sales of 29%, up 1.8 percentage points on the prior year.

Adjusted earnings per share increased 16% to 155.1p, beating analysts’ consensus forecast of 152p.

Chief executive Emma Walmsley commented: ‘GSK delivered excellent performance in 2023, with clear highlights being the exceptional launch of Arexvy and continued progress in our pipeline.

‘We are now planning for at least 12 major launches from 2025, with new Vaccines and Specialty Medicines for infectious diseases, HIV, respiratory and oncology.’

RAISED GUIDANCE

GSK said it expects to deliver another strong year of growth in 2024 with sales growth in the range of 5% to 7% and adjusted operating profit growth between 7% and 10%.

Shore Capital’s healthcare analyst Sean Conroy reckons the guidance is ahead of the current consensus which implies small upgrades.

Looking further out, GSK expects sales growth to average more than 7% per year from 2021 to 2026 (up from 5%) and to deliver 2031 sales of more than £38 billion, an upgrade of £5 billion from the guidance it gave two years ago.

Adjusted operating profit growth is now expected to average more than 11% per year compared with 10% previously for the 2021 to 2026 period.

Conroy commented: ‘Whilst questions remain around the pipeline, we sense the outlook has improved during 2023 and believe GSK has momentum in the portfolio and pipeline to deliver long term growth.

‘No material change on Zantac noted in the release but we should expect an update from Delaware hearings during Q1 2024’ added Conroy.

LEARN MORE ABOUT GSK

FRESH RECORD FOR NOVO NORDISK

Shares in the world’s leading diabetes and weight-loss treatment company Novo Nordisk (NOVO-B:CPH) gained as much as 4% to register a fresh all-time high after its fourth-quarter earnings beat analysts’ estimates.

Should you invest in the company fighting obesity?

Over the last five years, Novo shares are up 373% on excitement around its popular weight-loss treatment Wegovy which is leading the field in a market which analysts estimate could be worth more than $100 billion.

The company forecasts 2024 sales growth of 18% to 26% and operating profit growth between 21% and 29%.

The firm expects the price of Wegovy to fall as volumes ramp up and as new competition from Eli Lilly’s (LLY:NYSE) rival therapy Zepbound enters the market.

Chief executive Lars Fruergaard Jorgensen said he expects Novo Nordisk to more than double the amount of lower doses of Wegovy available in the US compared with recent months.

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