GSK sales hampered by slump in demand for key vaccine

Drugmaker GSK saw a sharp drop in revenue from its blockbuster Arexvy vaccine in the third quarter, dampening overall sales growth.

Sales of the jab for respiratory syncytial virus (RSV), previously a key driver of vaccine sales which saw an extremely successful launch last year, plunged 72% year-on-year to £188 million, hit by fewer of the shots being given out in the US.

The UK’s second-biggest pharmaceutical firm still saw 2% sales growth across the business after stronger performance from its HIV and cancer treatments, with the latter category nearly doubling in sales versus the same period last year.

But the RSV jab Arexvy was hit by more restrictive recent recommendations from US health officials over administering it to older and more at-risk patients.

A resurgence of Covid-19 infection rates, and a subsequent prioritisation of vaccinations for the virus over other jabs, also caused downward pressure on Arexvy sales.

GSK said that despite the fall in sales, Arexvy still had about a two-thirds share of the retail market, where most of the doses are given.

Chief executive Dame Emma Walmsley said the strong performance in cancer treatments and HIV medicine showed “resilience we have now built into GSK’s portfolio and performance”.

Blenrep, a treatment for cancer, and asthma medicine Depemokimab are among the planned new launches.

Nonetheless, shares in the company fell after it cut its outlook for its annual vaccines sales to a “low single-digit” percentage decrease, also partly driven by a smaller decline in sales for its shingles jab, Shingrix.

Derren Nathan, an analyst at Hargreaves Lansdown, said: “Just as Covid seemed to be a thing of the past, a push to drive up vaccination rates has changed clinical priorities.

“But GSK is showing strength elsewhere in its portfolio with 19% growth in speciality medicines, as the emerging cancer treatment franchise is up over 100% year to date.

“The higher margins in this division have had a positive impact on the bottom line, and full-year targets remain unchanged. New approvals and data in vaccines should see growth return after the current headwinds have been navigated.”

It comes after GSK struck a landmark 2.2 billion US dollar (£1.68 billion) settlement to resolve tens of thousands of lawsuits in the US over its discontinued heartburn drug Zantac earlier in October.