GSK bullish on 2023 as earnings surpass expectations

GSK posted robust quarterly earnings that beat expectations on the back of sales of its shingles vaccine and said it was bullish on this year despite a decline in turnover from coronavirus-related products.

The UK drugmaker, which has solely focused on drugs and vaccines since spinning off its consumer healthcare division last year, posted fourth-quarter sales of £7.4bn, a decline of 3 per cent at constant exchange rates.

For the full year, however, sales rose 13 per cent to £29.3bn. Adjusted quarterly profit was 25.8p per share. This compares with GSK-compiled fourth-quarter consensus estimates of £7.1bn for sales and 21.2p earnings per share.

GSK forecasts group sales to increase between 6 and 8 per cent in 2023 and earnings per share to rise between 12 and 15 per cent, the company said in a statement on Wednesday.

Emma Walmsley, chief executive, said 2022 was a “landmark year” for the company. “We enter 2023 with good momentum, underpinning confidence in our ambitious sales and profit outlooks for 2026.”

Life sciences companies have complained over a planned increase in UK clawback payments for the procurement of branded drugs, with two US drugmakers pulling out of the scheme altogether. GSK remains part of the scheme, and Walmsley, on a call with reporters, declined to be drawn over whether the government should abandon those plans.

She said GSK understood “the financial and short-term operational pressures the NHS is under” but that the strategy for the coming years should continue to support innovation.

“GSK remains committed to this country,” she said, but stressed the next reimbursement programme, from 2024, “should get the balance right for manufacturers to continue to want to launch and invest here as a priority, because there are options for investment around the world”.

Yearly sales were boosted by speciality medicines, with double-digit growth in treatments for disease areas including HIV and immuno-inflammation. Vaccines grew 11 per cent at constant currencies, helping offset much slower growth for other legacy products.

London-listed shares ticked 1 per cent lower in midday trading on Wednesday.

The group expects no “significant” Covid-19-related profits in 2023 as governments step back from large-scale procurement of drugs and vaccines to tackle the pandemic.

The drugmaker, which posted £2.4bn in pandemic-related sales in the past year, said on Wednesday it expected falling demand for Covid products to reduce turnover growth in 2023 by approximately 9 per cent.