GSK PLC (GSK) Q3 2024 Earnings Call Highlights: Strong Specialty Medicines Growth Amid Vaccine ...

GuruFocus News
3 min read

In This Article:

  • Sales Growth: 9% year-to-date, 2% for the quarter excluding COVID.

  • Specialty Medicines Growth: 19% year-to-date, with double-digit growth in HIV, respiratory immunology, and oncology.

  • General Medicines Growth: 7% for the quarter.

  • Vaccines Sales Decline: 15% for the quarter due to lower sales of Arexvy and Shingrix.

  • Core Operating Profit Growth: 5% excluding COVID.

  • Core EPS Growth: 5% excluding COVID.

  • Cash Generated from Operations: GBP5.3 billion year-to-date.

  • Dividend: 15p, up 7% for the quarter.

  • Net Debt: GBP13 billion, a reduction of GBP2 billion compared to December 2023.

  • Full Year 2024 Guidance: 7% to 9% sales growth, 11% to 13% profit growth.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • GSK PLC (NYSE:GSK) reported a 9% sales growth and 19% profit growth year-to-date, reflecting strong performance in Specialty Medicines.

  • The company has made significant progress in its pipeline, with 11 positive Phase III readouts and plans for five major new product approvals next year.

  • GSK PLC (NYSE:GSK) successfully resolved the majority of Zantac litigation, removing a significant perceived risk.

  • Specialty Medicines, particularly in HIV, respiratory immunology, and oncology, showed strong double-digit growth.

  • The company reported improvements in cash flow, with GBP5.3 billion generated from operations year-to-date, supporting pipeline investment and shareholder returns.

Negative Points

  • Total Vaccines sales were down due to lower sales of Arexvy and Shingrix, impacted by recent guideline changes and prioritization of COVID vaccines in the US.

  • The US Inflation Reduction Act is expected to impact GSK PLC (NYSE:GSK) with an estimated GBP400 million to GBP500 million effect, including on HIV sales.

  • The company faces challenges in the Chinese market due to tighter POB budgets and macroeconomic pressures affecting vaccine sales.

  • There is uncertainty around the revaccination and cohort expansion for Arexvy, which could limit growth potential in the near term.

  • GSK PLC (NYSE:GSK) experienced a significant decrease in Gardasil royalties, impacting profit growth by minus 8% in the quarter.

Q & A Highlights

Q: What is the latest update on the Affinivax product, and how does it relate to competitor data? A: Tony Wood, Chief Scientific Officer, explained that GSK is prioritizing a 30-plus valent adult vaccine proposition due to its superior antigen coverage without diminishing immunogenicity. The company expects to start a first-in-human study next year and is developing both 24 and 30-plus vaccines for pediatric use, confident in their competitive setting.

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