UK drugs giant GlaxoSmithKline (GSK) plunged more than 4% to £13.08 after reporting a 2% fall in revenue in the three months to 31 December 2020 and adjusted earnings per share of 23.3p.
The company, that plans to split into two businesses, also forecast 2021 profit to fall by a mid- to high-single digit percentage.
‘GSKs top-line growth has been muted for several years now and this has left the company falling behind its peer group’, said Sebastian Skeet, senior healthcare analyst at research firm Third Bridge.
SLOW TO ADAPT
In 2020 GSK wasn't able to change course effectively, despite some considerable efforts to rebuild its pipeline. At constant exchange rates and pro-forma basis, top line sales for the pharmaceuticals, vaccines and consumer health division dropped by 1%, 1% and 2% respectively.
‘Whilst this was offset with effective cost control, adjusted EPS declined 4% at with FX effects stripped out, and history is likely to repeat itself in the coming years’ said Skeet.
Key assets such as its shingles vaccine, Shingrix, has seen significantly depressed prescription volumes due to US lockdowns although Q4 volumes have picked up. New launches include the multiple myeloma therapy Blenrep, although sales execution will be impacted by the pandemic and the drug carries concerning ocular toxicity issues which may limit its use.
‘Where others have multiple potential blockbuster drug candidates in the pipeline, GSK's later stage pipeline looks somewhat anaemic. This has been compounded by recent trial disappointments. Most notably would be their Sanofi-partnered Covid-19 vaccine candidate, however in recent weeks we have heard of further trials being dropped’, added the analyst.
PIPELINE PROMISE
There is nevertheless some positive momentum in the pipeline with a number of programmes kicking in. These include further Blenrep trials, the RSV vaccine candidate, otilimab, and some other earlier stage candidates that have promising pan-oncology opportunities.
GSK announced today a new collaboration with CureVac for next generation mRNA vaccines aimed at tackling multiple Covid-19 variant strains in one shot.
