GSK Shares Drop as Vaccine Sales Down in Q3

GSK (LON: GSK) shares fell more than 3% in early Wednesday trading after the company reported a decline in vaccine sales during the third quarter of 2024.

While the pharmaceutical giant maintained its overall 2024 outlook, the weaker-than-expected vaccine performance weighed on investor sentiment.

Sales of Shingrix and Arexvy, two key vaccines, were down 7% and 72%, respectively. The decline was attributed to factors such as changes in US vaccination guidelines, prioritisation of COVID-19 vaccinations, and the annualization of Arexvy's launch.

Overall, vaccine sales declined by 15% year-on-year.

Despite the vaccine headwinds, GSK's Specialty Medicines division continued to drive growth, with sales increasing by 19%. The performance was fueled by strength in sales of HIV, Oncology, and Respiratory/Immunology.

Overall, Q3 sales came in at £8 billion, down 2% compared to the previous year at actual exchange rates and up 2% at constant exchange rates.

GSK's total operating profit fell by -86% in the quarter, which was significantly impacted by a £1.8 billion charge related to the Zantac settlement.

However, core operating profit and core earnings per share grew by 5% and 5%, respectively, reflecting the robust performance of Specialty Medicines and effective cost management.

Emma Walmsley, CEO of GSK, stated: “Our pipeline continues to strengthen with 11 positive phase III trials reported so far this year and we are currently planning launches for 5 major new product approval opportunities next year: Blenrep, Depemokimab, Nucala for COPD, Gepotidacin, and our new vaccine to prevent meningitis (MenABCWY). We also resolved the vast majority of Zantac litigation in the quarter, to remove uncertainty and so we can focus forward.”

Looking ahead, GSK said full-year 2024 core operating profit is expected to grow between 11% and 13% at constant exchange rates. Core earnings per share are expected to increase between 10% and 12%.