GSK shares fell as much as five per cent in early trading on Wednesday after the British pharmaceuticals giant reported a decline in vaccine sales, overshadowing better-than-expected revenue figures.
The FTSE 100 company recorded £8.9bn turnover in the third quarter, five per cent up on last year and one per cent above analyst forecasts. However, a two per cent fall in vaccine revenue to £2.6bn weighed on the results.
Speciality medicines drive growth
GSK's speciality medicines are propelling revenue growth, with injectable HIV treatments and oncology drugs each delivering double-digit expansion. Sales of Arexvy, the firm's vaccine for respiratory tract disease, dropped 14 per cent to £0.2bn, counterbalancing a 12 per cent rise in meningitis vaccine sales.
Chris Beauchamp, chief market analyst at investment platform IG, said weakness in GSK's vaccine business "is pointing towards tougher trading in the coming quarters".
Share price impact
Wednesday morning's share price decline erased some of the stock's advances in the first half of October, leaving GSK flat year-to-date at £18.33. Beauchamp said: "£18 still seems to be the floor for now, but GSK has to come up with some good news on core products, and soon, if it is to avoid giving back more of the 2025 share price gains."
Analysts at Shore Capital, which maintains a 'buy' rating on the stock, said GSK remains the stockbroker's preferred asset in the UK's pharmaceutical sector, ahead of rival AstraZeneca. "We believe GSK is shedding legacy perceptions of being a perennial disappointment, and it is becoming increasingly difficult to dismiss its longer-term growth ambitions given the progress that has been made since the CHC demerger," they said.
Company outlook
Chief executive Luke Miels said: "GSK has delivered another strong quarter, with our key growth drivers and new launches performing well. We remain focused on operational delivery, execution and accelerating R&D."
In July, GSK unveiled substantial redundancies to help finance a new £400m mega-campus in Cambridge. The company said it would need to secure £1.9bn in savings to fund this new facility. Cambridge is set to become the company's new research and development headquarters, currently situated in Stevenage. Miels hopes this relocation will provide GSK with fresh impetus as it strives to narrow the gap with AstraZeneca and its US rivals.
