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GSK’s revenue drops by 18% in Q1 as performance pressures mount

Chief executive Emma Walmsley said results ‘reflect the anticipated impacts of COVID-19’

GSK HQ

GlaxoSmithKline (GSK) has announced that its first quarter sales have slipped by 18%, with the company's chief executive Emma Walmsley maintaining that the results ‘reflect the anticipated impacts of COVID-19’.

Walmsley has come under increasing pressure to improve GSK’s performance ahead of a planned split of the company’s consumer health and pharma divisions, which is “well underway”.

Further tension emerged earlier this month, after it was reported that activist hedge fund Elliott Management had built up a sizeable stake in the British drugmaker.

According to The Guardian, Elliott Management is an ‘aggressive activist’ investor – in the pharma industry, the hedge fund petitioned for the sale of Alexion Pharmaceuticals ahead of its subsequent acquisition by AstraZeneca in December 2020.

Elsewhere in its Q1 results, group revenue dropped by 18% to £7.4bn, while consumer healthcare sales took a hit, slipping by 19% to £2.3bn.

GSK’s pharma division fared only slightly better, with a 12% decrease in sales to a total of £3.9bn, driven primarily by a decrease in immunisations for its shingle vaccine Shingrix.

Walmsley pinned GSK’s growth prospects on the launch of its HIV pill Cabenuva, as well as a potential RSV vaccine, currently in phase 3 trials, and a new long-acting severe asthma treatment.

GSK is confident that sales of Shingrix will increase in the second half of the year, thanks to mass COVID-19 vaccination programmes currently underway in the US and UK.

“We are encouraged by the rate at which COVID-19 vaccinations are being deployed in many countries, particularly the US and UK, which provides support for healthcare systems returning to normal. As a consequence we remain confident in the underlying demand for our vaccine products,” the company commented.

GSK also highlighted its COVID-19 vaccine collaborations as key areas for growth in 2021, which include a partnership with Sanofi on an adjuvanted recombinant protein-based vaccine and a manufacturing agreement to help make Novavax’s vaccine candidate.

Another partnership with Vir Biotech for a COVID-19 monoclonal antibody (mAb) should also begin to yield sales, with the European Medicines Agency currently reviewing the company's VIR-7831 for the early treatment of COVID-19.

Article by
Lucy Parsons

29th April 2021

From: Sales

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