Glaxo's Shingles Vaccine Gave Earnings a Shot in the Arm
01 November 2018 - 2:43AM
Dow Jones News
By Denise Roland
LONDON -- GlaxoSmithKline PLC reported a rise in third-quarter
earnings and said full-year profit would come in at the top end of
expectations, mainly thanks to strong demand for its new shingles
vaccine.
Demand for Shingrix, which is aimed at people age 50 and over,
has outpaced Glaxo's expectations since it launched the vaccine
late last year. The company says it now expects sales of GBP700
million to GBP750 million ($893 million to $957 million) this year,
up from previous guidance of GBP600 million to GBP650 million. The
vaccine protects against shingles, a disease that leads to a
painful rash and that is caused by the reactivation of the chicken
pox virus in people whose immune systems have weakened with
age.
Shingrix got a boost when the U.S. Centers for Disease Control
and Prevention last year gave the vaccine favored status over a
rival, Merck & Co's Zostavax. The CDC also recommended that
adults who had previously received Zostavax should still receive
Shingrix.
That has led to some supply shortages. The British
pharmaceutical giant said it had implemented an "allocation
process" to make sure customers can complete the two-dose course.
"We are working extremely hard to improve our capacity for supply,"
Chief Executive Emma Walmsley said.
Shingrix's strong performance helped push Glaxo's third-quarter
revenue to GBP8.1 billion, up 3% from the same period last year.
Glaxo's HIV franchise and new respiratory drugs also contributed to
the higher sales.
Adjusted operating profit, a measure that strips out one-time
items and is closely watched by analysts, rose 2% to GBP2.5
billion. Taking currency fluctuations into account, revenue and
adjusted operating profit both rose 6%. Net profit for the three
months ended Sept. 30 was GBP1.42 billion, compared with GBP1.21
billion in the same period last year.
Glaxo said it now expects full-year adjusted earnings a share to
grow 8% to 10%, taking currency fluctuations into account, having
previously guided to a 7%-to-10% rise.
Glaxo said it expected to hit that guidance regardless of
whether a generic version of its top-selling inhaler Advair hits
the market before the end of the year. Global generic
pharmaceutical company Mylan has said it believes an approval from
the U.S. Food and Drug Administration for its cut-price version of
the blockbuster product is "imminent."
Glaxo also said it would pay a dividend of 19 pence a share for
the quarter and that it still expects the full-year dividend to be
80 pence a share.
The company added that it has continued cutting early-stage
research projects that failed to show enough promise to pour more
money into drug candidates with more potential, as part of Ms.
Walmsley's broader push to revive the company's research pipeline.
"We wanted to be more proactive about intervening earlier to stop
things...so that we can really focus our resources on the big bets
that are going to have meaningful impact on patients," Ms. Walmsley
said.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
October 31, 2018 11:28 ET (15:28 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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