GSK predicts smaller fall in 2019 profit after standout quarter for Shingrix

GSK predicts smaller fall in 2019 profit after standout quarter for Shingrix
FILE PHOTO: The GlaxoSmithKline (GSK) logo is seen on top of GSK Asia House in Singapore, March 21, 2018. REUTERS/Loriene Perera/File Photo   -  Copyright  Loriene Perera(Reuters)
By Reuters

(Reuters) – GlaxoSmithKline Plc <GSK.L> on Wednesday forecast a smaller than previously estimated fall in full-year profit after the British drugmaker beat profit consensus for the second quarter due to demand for its fast-growing Shingles vaccine.

Shares of the FTSE-100 member were up 2% at 1,698 pence Chief Executive Officer Emma Walmsley outlined “another standout quarter” for the vaccine, with sales more than doubling.

The quarter bode well for Walmsley’s plans to rejuvenate GSK’s operations, which has included the spin off or sale of a number of units since she took over in 2017 to focus on the company’s core pharmaceuticals business.

Sales of shingles vaccine Shingrix soared to 386 million pounds in the three-month period, above analysts’ expectations of 366 million pounds.

Shingrix was launched in 2017 and the British drugmaker predicts sales of the vaccine will be “significantly” more than 1 billion pounds in 2019.

GSK now expects annual earnings for 2019 to decline by between 3% and 5%, an improvement from a previous forecast of a 5% to 9% fall at constant currency.

The new forecast reflects improved operating performance, as well as lower interest expense, the company said.

GSK’s turnover rose 5% to 7.81 billion pounds in the second quarter ended June 30, compared with analysts’ expectation of 7.65 billion pounds.

Adjusted earnings were 30.5 pence per share in the second quarter. Analysts on average had expected earnings of 25.8 pence, according to a company-compiled consensus of 10 analysts.

The company earlier on Wednesday appointed HSBC’s <HSBA.L> Jonathan Symonds to succeed Philip Hampton as non-executive chairman, ending a six month search as the drugmaker prepares to split its businesses into two.

Symonds was formerly finance chief at GSK rivals Novartis <NOVN.S> and AstraZeneca <AZN.L>.

(Reporting by Pushkala Aripaka in Bengaluru; editing by Patrick Graham)

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