By Yadarisa Shabong
(Reuters) – GSK posted a better-than-expected fourth quarter on Wednesday and lifted its 2031 sales target to nearly $50 billion as the British drugmaker aims to invest heavily in its specialty medicines to offset weakness in vaccines.
GSK’s shares jumped nearly 6% in early trade as the London-listed company also said it would buy back 2 billion pounds ($2.5 billion) worth of shares over the next 18 months.
The fourth quarter beat, outlook and share buyback should be taken as positives by investors, analysts said.
GSK’s fourth-quarter earnings topped estimates as strength in its HIV and oncology portfolio offset a fall in sales of its respiratory syncytial virus (RSV) and shingles shots.
“We are increasing and prioritising R&D investment to promising new long-acting and specialty medicines in Respiratory, Immunology & Inflammation, Oncology and HIV,” CEO Emma Walmsley said in a statement.
GSK’s stock was among the biggest gainers in Europe and set for its best day since December 2022 if gains hold on Wednesday.
Shares in vaccine makers have taken a hit since President Donald Trump nominated Robert F. Kennedy Jr, whose role in the anti-vaccine movement has been criticised, to lead the Department of Health and Human Services.
Kennedy disputes the anti-vaccine characterization and has said he would not prevent Americans from getting inoculations.
Shares in U.S. drugmakers fell further on Tuesday as he moved closer to securing the top health job after winning a senior Republican senator’s backing with pledges to protect existing vaccination programmes.
FOCUS ON CANCER AND INFECTIOUS DISEASES
Walmsley’s bet on blockbuster RSV vaccine, Arexvy, has hit hurdles in the United States, including changes in public health agency recommendations, prioritisation of other vaccinations such as COVID-19 and lower seasonal infections.
Since taking the helm of GSK in 2017, Walmsley has returned the company to growth with a focus on cancer and infectious diseases to counter a combination of patent expiries and declining revenue from its bestsellers by 2030.
GSK expects revenue to grow between 3% and 5% in 2025, a slower pace compared with the 7% growth it reported on Wednesday for 2024. Analysts had expected sales to grow about 3.5% this year, according to a company-compiled consensus.
The British drugmaker lifted its 2031 sales forecast to more than 40 billion pounds ($49.9 billion), from 38 billion pounds it targeted earlier.
The company reported core earnings per share of 23.2 pence on sales of 8.12 billion pounds for the quarter ended Dec. 31, compared with 19 pence on sales of 7.75 billion pounds expected by analysts in an LSEG poll.
Revenue from its vaccine business in 2025 is expected to see a decrease of a “low single-digit per cent”, it said.
($1 = 0.8017 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich, Shri Navaratnam and Emelia Sithole-Matarise)
