GlaxoSmithKline Plc expects to make regulatory filings for three new oncology drugs by the end of 2019, all of which reported positive data in the third quarter. The regulatory plans were highlighted by Emma Walmsley, the chief executive, in a teleconference on 30 October where she also announced an upgrade of the company’s earnings guidance.
Adjusted earnings per share, which exclude amortisations and impairments, are expected to be flat at constant exchange rates, rather than down. The dividend is expected to be unchanged at 80 pence per share.
Ms Walmsley said that GSK had made “good progress” in the quarter across its three businesses while strengthening its pipeline, particularly in oncology. After positive late-stage data, the company plans to make regulatory filings for the PARP inhibitor Zejula (niraparib) as a maintenance therapy for ovarian cancer; the antibody-drug conjugate belantamab mafodotin for multiple myeloma, and the checkpoint antibody dostarlimab for endometrial cancer. Both Zejula and dostarlimab were developed by Tesaro Inc, which was acquired by GSK in 2018 as part of its strategy to rebuild its pipeline.
The third quarter also saw the completion of GSK’s consumer healthcare deal with Pfizer Inc under which the two companies created a joint venture with GSK as the controlling shareholder. The goal is to demerge the venture in three years and list the entity on the UK equity market.
GSK reported group sales of £9.4 billion for the third quarter, up by 11% at constant exchange rates from a year earlier. The figure includes two months of the merged consumer business. On a pro-forma basis, the increase was 6%.
Group operating profit was £2.14 billion, up by 3% at constant exchange rates. Using adjusted figures, the operating margin was down by 1.5 percentage points compared with a year earlier, which reflected the loss of patent protection for the asthma drug Advair and higher R&D spending, particularly in oncology. This was partly offset by higher sales of vaccine products and a tight control of costs across the company’s three businesses.
Pharmaceuticals represented nearly half of group revenue in the third quarter with sales of £4.5 billion, up by 7% from a year earlier. Vaccines represented 25% of total revenue at £2.3 billion, up by 20%, and consumer healthcare was 27% of the total at £2.5 billion, up by 30%. On a pro-forma basis, consumer healthcare was up by 3% at constant exchange rates.
Vaccine sales were led by Shingrix, the company’s new vaccine to protect against shingles. Separately, GSK announced that its candidate vaccine for tuberculosis showed efficacy in a trial of HIV-negative adults with latent TB infection. The results were published in The New England Journal of Medicine on 29 October 2019
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