GSK Raises Annual Forecasts Amid Strong Drug Sales

British pharmaceutical giant GSK has raised its annual earnings and sales forecasts after surpassing second-quarter expectations, driven by robust sales of cancer and HIV treatments. CEO Emma Walmsley's strategic focus on infectious disease drugs like the RSV vaccine Arexvy is mitigating risks from upcoming patent expirations and revenue declines.

British drugmaker GSK announced an increase in its annual earnings and sales forecasts on Wednesday, surpassing second-quarter expectations due to impressive sales of its cancer and HIV treatments. CEO Emma Walmsley's strategic focus on infectious disease drugs and vaccines, including the new RSV vaccine Arexvy, is paying dividends as the company navigates the challenges of looming patent expiries and declining revenues from its current best-sellers.

Although Arexvy captured two-thirds of the U.S. market, its sales fell short of expectations at 62 million pounds ($80 million), compared to the forecasted 70 million pounds. This was exacerbated by a U.S. public health agency's decision to narrow the age recommendation for RSV vaccines and delay its recommendation for adults under 60, which negatively impacted GSK shares, causing a 6% drop.

In response, GSK has adjusted its 2024 vaccine sales forecast, now anticipating low to mid-single-digit percentage growth, as opposed to the earlier projection of high single-digit to low double-digit growth. However, the company expects increased sales of cancer, HIV, and other specialty medications to counterbalance the lower vaccine sales. GSK reported second-quarter core earnings per share of 43.4 pence on sales of 7.88 billion pounds, both exceeding analysts' forecasts. The company has also raised its 2024 profit forecast for the second time this year, now predicting a core EPS increase of 10% to 12%, up from the previous 8% to 10% growth.

Annual sales are now expected to rise between 7% and 9%, an increase from the prior range of 5% to 7% growth.