Bexsero gains propel GSK's vaccines unit to pharma-beating 16% growth in Q1

With a new captain at the helm, GlaxoSmithKline maintained its vaccines momentum in the first quarter with 16% growth for the unit, thanks to standout sales from meningitis shots picked up in its Novartis deal. And a new plant and forthcoming launch could keep the growth coming.

Former Novartis vaccines Bexsero and Menveo grew 79% and 17% in the first quarter, respectively, as GSK moves to make the most out of its decision to bet on vaccines. The British drugmaker also reported (PDF) that flu shots Fluarix and FluLaval grew 11% on the period, thanks to early deliveries around the world, and that established vaccines benefited from CDC and wholesaler stocking.

All told, GSK’s vaccines generated £1.15 billion ($1.25 billion) for the drugmaker in the first quarter. The unit’s 16% growth rate outperformed GSK’s first-quarter pharma sales growth of 4% and consumer health’s increase of 2%, all at constant exchange rates.

Looking forward, GSK execs have several reasons to be optimistic for the future in vaccines. Sensing potential for Bexsero, GSK just last month announced it’s building a $175 million plant in Germany to boost capacity of its star meningococcal B shot.

U.S. and European drug regulators are expected to act on a pipeline vaccine, Shingrix, in the fourth quarter of this year, and so GSK is making moves to ready the launch of a shot expected to reach $1 billion in sales. On the market, the shingles vaccine would take on Merck’s Zostavax.

Speaking to analysts on the first-quarter call, new GSK CEO Emma Walmsley said the company’s "immediate focus" is to "deliver excellent commercial execution" on three drug launches, Shingrix included.

She also talked down any remaining hopes that GSK might split, reiterating GSK’s commitment to focus on pharma, vaccines and healthcare. Due to "uncertainty and volatility" in pharma, she said the management team likes "to have more certainty in terms of reliable cash flows both from vaccines and consumer [health]."

Former GSK CEO Andrew Witty bucked the pharma trend back in 2014 when he inked the massive Novartis asset swap, doubling down in low margin business and shipping away pricey cancer meds. In his final year as CEO, the company’s vaccines unit outgrew any other business at the U.K. drug giant.