Picture: REUTERS
Picture: REUTERS

Bengaluru — GlaxoSmithKline on Wednesday raised its annual profit forecast for the second time in 2019 as sales of its shingles vaccine beat expectations and older medicines, including HIV/AIDS treatments, continued to sell well.

The British drugmaker’s shares rose as much as 3% to a more than a six-year high after the company said it now expected profit to be roughly flat at constant currency for the year, compared with a previous forecast of a fall of 3%-5%.

CEO Emma Walmsley has embarked on a plan to rejuvenate Glaxo, which has included the spin off or sale of a number of businesses since she took over in 2017. The company has formed a joint venture with Pfizer’s consumer health division for over the counter products.

Glaxo’s leaner structure has also helped the company focus more on its pharmaceuticals business and build a newer pool of treatments, including its shingles vaccine, Shingrix.

Walmsley said she was delighted with the vaccine’s performance, which had exceeded the drugmaker’s expectations.

“Shingrix will be a material contributor to the company’s growth for some time,” she told reporters.

Glaxo has at times struggled to keep up with demand.

“Obviously [Shingrix] has performed ahead of our initial expectations, which is why we have been working extremely hard on improving and accelerating our supply,” Walmsley said.

Sales of the vaccine, launched in 2017, jumped 76% to £535m, zooming past analysts’ estimate of £464m, driven by sales in the US where doctors are recommending immunisation more often for patients.

That performance helped sales at Glaxo’s vaccines business to increase 15% to £2.31bn in the third quarter, above consensus.

Shingrix sales have already reached £1.24bn in the first nine months of 2019 and it looks on course to exceed analysts’ £1.52bn sales forecast for 2019.

The company said its new profit forecast also reflected operating performance, increased investment in research and development as well as a lower expected effective tax rate of about 17% for the year.

Glaxo’s joint venture with Pfizer reported sales of £2.53bn, boosted by US drugmaker Pfizer’s older brands.

On Brexit, the British drugmaker said it had been preparing for a no-deal divorce between the UK and the EU for some time now.

“Any difference between the preparation for the risk of a no-deal scenario and an ordered planned one in January is de minimis because that all happened over the last couple of years,” Walmsley said.

Total group sales of £9.39bn surpassed a company-compiled consensus of £9.02bn. This is the drugmaker’s sixth consecutive quarterly sales beat, according to Refinitiv Eikon data.

Glaxo shares were up 1.7% at 1,769p at 1.17pm GMT.

Reuters