- GlaxoSmithKline expects earnings for 2018 to come in at the high end of previous forecasts, narrowing its guidance for the year as quickening sales of the pharma's new shingles vaccine and delays to knockoff competitors have raised confidence.
- Sales of the Shingrix vaccine, approved last year, widely beat Wall Street's expectations during the third quarter and GSK now predicts product revenues of between £700 million and £750 million pounds, or between $900 million and nearly $1 billion.
- Analysts, though, remain concerned that competition in HIV and pricing pressures in respiratory disease — two of GSK's core therapeutic areas — could threaten the future course CEO Emma Walmsley has set out for the company.
Shingrix (zoster vaccine, recombinant), one of three assets GSK has touted as near-term salves for declining sales elsewhere, has found rapid commercial success. So quick, in fact, that the British pharma has had trouble keeping up with supply.
Despite that headwind, sales of the vaccine totaled nearly $370 million in the three months from July to September — more than 60% higher than predicted by investment bank Cowen heading into the quarter's end.
That lift helped drive 17% year-over-year growth for GSK's vaccines business overall, outpacing the 3% growth posted by the drugmaker's pharmaceuticals unit.
"For Shingrix, we are on track with good momentum and this is a very large opportunity, but in the near-term our ability to grow sales will be limited by our supply," said Luke Miels, head of global pharmaceuticals at GSK, on a Wednesday earnings call.
The prospects for GSK's two other top priority assets, meanwhile, remain more emerging than realized. Sales of Trelegy Ellipta (fluticasone furoate/umeclidinium/vilanterol) and Juluca (dolutegravir/rilpivirine) are growing yet low. And more broadly, GSK looks to have tougher challenges ahead in both respiratory and HIV.
In respiratory diseases, entry of generic copies to Advair (fluticasone/salmetrol) — while yet to materialize — will arrive soon and weigh on the company in 2019. Even without knockoffs, sales of the former flagship drug are expected to decline 30% in 2018.
Elsewhere in respiratory, AstraZeneca's Fasenra (benralizumab) and now Sanofi's Dupixent (dupilimuab) are challengers to GSK's asthma drug Nucala (mepolizumab).
"This is very much a three-dog fight between us, Fasenra and Dupixent," said GSK's Miels. "In the second half of 2019, I am more optimistic. However, we have to be realistic in the short-term: there will be volume growth but there will also be competitive pressure in terms of patients," he continued.
Meanwhile Gilead's Biktarvy (bictegravir/emtricitabine/tenofovir alafenamide) has quickly established itself and threatens to blunt GSK's own offerings.
Investors, then, are looking to what GSK can bring forward from its pipeline after a year of program culls and a refocusing of resources now led by R&D head Hal Barron.
The process of whittling lower priority assets away from future "winners" appears to be continuing too — the pharma terminated four programs from Phase 2 during the third quarter.
"We are stopping some of these things so that we can focus on the priorities we have organically but we also want to do — and have appointed a new leader to think about — [business development]," said GSK's Walmsley, referring to Kevin Sin, who was brought on from his prior role as Genentech's head of oncology business development.
Next year will bring updates on seven experimental pipeline assets, including one cancer candidate with high expectations attached to it. GSK now has to deliver.