GSK narrows earnings guidance after Shingrix boost

GSK says it now expects full-year earnings at the upper end of its guidance after continued sales growth during the third quarter and the delay to generic competition for one of its key products.

The drug giant said it is now expects 2018 adjusted earnings per share (EPS) growth of 8% to 10% at constant exchange rates (CER), regardless of whether a substitutable generic competitor to respiratory drug Advair (salmeterol/fluticasone) is now launched in the US during the remainder of the year.

"GSK has made further good progress this quarter with CER sales growth in all three businesses, improvements in the Group operating margin at CER and adjusted earnings per share growth of 14% (CER)," said chief executive Emma Walmsley.

"Strong commercial execution for key products and new launches, notably Shingrix, together with an effective focus on cost control is driving this improved performance.

"Looking further ahead, we remain confident in our ability to deliver the Group outlooks for sales and EPS growth we previously set for the period 2016-2020."

GSK also reported group sales of £8.1 billion for the third quarter, with pharmaceuticals contributing £4.2 billion (+3% CER), vaccines £1.9 billion (+17% CER) and consumer healthcare £1.9 billion (+3% CER).

Driving sales in pharmaceuticals, total new respiratory product sales hit £645 million, leaping 40% (CER) from the year-ago period, while HIV drugs Tivicay (dolutegravir) and Triumeq (abacavir, dolutegravir, and lamivudine) revenues came in a £1.1 billion, up 13% (CER).

In the vaccines division, Shingrix pulled in £286 million for the quarter, leading GSK to increase its full-year sales expectation to £700-750 million from the £600-£650 million forecast in its second quarter results.

Also of note, the company’s recent cost-control programme helped raise total operating profit 2% to £1.9 billion, while pretax profits were £1.7 billion.

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