GSK Anticipates Sales Upturn In 2022 After Quarterly Beat – Cryptovibes.com – Daily Cryptocurrency and FX News
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After racking up 1.4 billion pounds ($1.9 billion) in COVID-related sales in 2021, Britain’s GSK (GSK.L) forecast growth in 2022, beating quarterly forecasts in its first earnings report since rejecting Unilever’s (ULVR.L) bid for its consumer’s arm.
After it failed to bring a vaccine to the market so far, the results underscore a comeback for GSK in the race to help fight the COVID-19 pandemic. As boss Emma Walmsley faces pressure from activist investors, the spin-off of the consumer venture with Pfizer (PFE.N) has also put the future in focus.
Walmsley said:
“We have ended the year strongly, with another quarter of excellent performance … and we enter 2022 with good momentum. This is going to be a landmark year for GSK.”
After turning down Unilever’s 50 billion pound buyout offer for the unit in December, the drug maker is pressing on with the spin-off of its consumer’s arm, home to brands such as Advil painkiller and Sensodyne toothpaste.
GSK had been called upon by some activist investors to give more consideration to a potential sale of the unit. The ability of top management to boost the success rate of drug development, where GSK has long lagged peers, has also been questioned by the activist investors.
After the consumer unit spin-off, the company said adjusted operating profit was forecast to rise 12% to 14% and sales in 2022 were expected to grow 5% to 7%. The boost from a settlement with Gilead (GILD.O) also, however, not sales of its COVID-19 products.
On sales of 36.28 billion pounds, analysts had forecast group earnings of 120.8 pence per share or a rise of about 8% from 2021. Pandemic-related sales in 2022 were expected by the company to be at similar levels to 2021. However, due to lower margins on its antibody treatment, knocking off profit by 5% to 7%, these would contribute less to profit at “New GSK”.
PANDEMIC AND BEYOND
Morgan Stanley analysts said that except the Gilead deal, which secured royalty payments from an HIV drug, from the 2022 outlook “suggests a modest trim to consensus underlying operating profit, albeit management’s guidance at the beginning of the year is likely to include a degree of conservatism.”
Spurring demand is one of the few COVID-19 treatments shown to have worked against the fast-spreading Omicron variant, GSK’s sotrovimab, developed with Vir Biotechnology (VIR.O). In 2021, it was amongst GSK’s top-selling offerings.
Orders for 1.7 million doses of sotrovimab, including from the United States, Canada, and the European Union have been secured by GSK. In the fourth quarter, sales of sotrovimab, branded Xevudy, stood at 828 million pounds, up from 114 million in the third quarter and above market expectations of 774 million pounds.
Revenue from shingles vaccine Shingrix, a key earnings driver over past quarters, still surpassed consensus of 548 million pounds despite slipping 7% to 597 million pounds. While turnover rose 13% to 9.53 billion pounds at constant currency rates, topping a consensus of 23.8 pence apiece on sales of 9.49 billion pounds, adjusted earnings for the group stood at 25.6 pence per share for the three months to December 31.
Before the end of June, key trial results in 2022 were expected by GSK to go on up to seven future growth drivers including a long-awaited read-out on a vaccine for the elderly against the common respiratory syncytial virus.
This year, the consumer arm’s performance was expected to be in line with the previously stated medium-term target for annual currency-adjusted sales growth of 4% to 6%, Walmseley told a media call. At a Feb. 28 investor event, GSK will unveil more details.
($1 = 0.7378 pounds)
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