GSK shares fall 5.5% despite revenue growth — The Guardian
In the United Kingdom, shares in pharmaceutical company GSK fell 5.5% on October 28 after the publication of its third-quarter financial results. During trading, the decline reached 7%, and GSK became the biggest laggard in the FTSE 100 index. As The Guardian reports, investors were concerned by weaker vaccine sales, restructuring costs and the company’s overall outlook.
Profit declined, revenue increased
GSK’s pre-tax profit in July–September fell by 19% to £1.9 billion. At the same time, revenue, calculated at constant exchange rates, rose by 5% to £8.9 billion. Growth was driven by sales of medicines for HIV, cancer and lupus.
Vaccine sales decreased by 2% to £2.6 billion. Sales of the shingles vaccine Shingrix fell by 5%, while sales of the respiratory syncytial virus vaccine Arexvy dropped by 24%. Meanwhile, sales of meningitis vaccines rose by 12%.
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Restructuring and patent risks
The company recorded £318 million in restructuring costs in the third quarter. Total restructuring costs will amount to £2.4 billion, with most of these expenses falling in the current and following years. GSK expects to save £1.9 billion annually under a three-year plan that provides for simplifying its operating structure and increasing investment in research and development.
Chief executive Luke Miels said the impact of the programme on the United Kingdom would be relatively limited: cuts would affect certain support-function employees at the central office in London. In Belgium, GSK is reorganising its vaccine division, making greater use of digital tools and automation; this could result in approximately 1,200 job cuts.
Investors are also concerned about the future loss of patent protection for the HIV treatment dolutegravir at the end of the decade. After that, other manufacturers will be able to produce cheaper generic versions of the drug. At the same time, GSK confirmed its annual forecast and set a target of generating more than £40 billion in annual revenue by 2031.
