GlaxoSmithKline Q1 Profit, Sales Decline As COVID-19 Vaccination Delay Other Treatments; Backs 2021 Outlook

GlaxoSmithKline Plc GSK Q1 revenue fell 18% in the first quarter, as the COVID-19 vaccination program delayed sales of its Shingrix shot for shingles.

Earnings: The company reported sales of £7.4 billion, down from £9.1 billion a year ago, as the COVID-19 pandemic hit all the operating segments.

Vaccines turnover declined 32% to £1,224 million, and sales of Established Pharmaceuticals declined 20% to £1,942 million.

Pharmaceuticals turnover slipped 12% at £3.9 billion, reflecting the continued impact of the COVID-19 pandemic, including the stock build in Q1 2020 and lower demand for antibiotic products in Q1 2021.

Posted net profit of £1.07 billion, down from £1.57 billion in the last year. Adjusted earnings per share stood at 22.9 pence in the period, compared with 37.70 pence the year prior.

Emma Walmsley, GSK's chief executive, said the results were in line with the company's expectations and "reflect the anticipated impacts of COVID-19. We continue to expect a significant improvement in performance over the remainder of the year and reconfirm our guidance for 2021 and 2022 outlook."

She added that the company is strengthening its growth prospects by launching an HIV drug (Cabenuva), starting a late-stage trial for a vaccine for the respiratory disease RSV, and a new long-acting treatment for severe asthma.

The board declared a dividend of 19 pence for the quarter and continues to expect 80 pence a share for the full year.

GSK confirmed plans to split in two were "well underway", and would provide details on June 23.

Guidance: GSK expects a decline of mid to high single-digit percentage points in adjusted earnings per share for the full year, at constant exchange rates.

Drugs: GlaxoSmithKline is calling time on two Phase 1 assets in oncology and rare, fatal disease in young children because of "portfolio prioritization."

First up is the Immunocore-partnered GSK3537142 (NYESO-ImmTAC), an anti-CD3 bispecific targeting NY-ESO, testing in solid tumors and synovial sarcoma.

It also culled Duchenne muscular dystrophy hopeful in GSK3439171, which worked as a hematopoietic prostaglandin D2 synthase inhibitor. 

See the Q1 earnings presentation here.

Price Action: GSK shares are up 0.11% at $37.77 on the last check Wednesday.

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