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GSK plc (GSK - Free Report) reported core earnings of $1.09 per American depositary share (“ADS”) in first- quarter 2024, beating the Zacks Consensus Estimate of 94 cents. Core earnings rose 16% year over year on a reported basis and 28% at a constant exchange rate (CER).
Quarterly revenues increased 6% on a reported basis and 10% at CER to $9.34 billion (£7.36 billion), beating the Zacks Consensus Estimate of $8.98 billion. The upside can be attributed to rising HIV and vaccine product sales, which was partially offset by the declining COVID-19 product sales.
GSK reports financial figures under three segments — Specialty Medicines, Vaccines and General Medicines.
All growth rates mentioned below are on a year-over-year basis and at CER.
Segment Discussion
Sales in the Specialty Medicines segment rose 17% despite a steep decline in Xevudy sales. Excluding Xevudy sales, revenues in the Specialty Medicines segment were up 19%. Sales growth of HIV, oncology and respiratory drugs was also strong.
Xevudy generated sales of £1 million in the first quarter compared with £13 million in fourth-quarter 2023. GSK markets Xevudy in collaboration with Vir Biotechnology (VIR - Free Report) . In 2022, the FDA withdrew the emergency use authorization (EUA) granted to GSK/Vir Biotechnology’s Xevudy. The withdrawal decision for the Vir Biotechnology-partnered antibody therapy was based on data that showed that it was unlikely for the Xevudy dose to be effective against the Omicron variant.
HIV sales rose 14% driven by sales of new HIV drugs — Juluca, Dovato, Cabenuva and Apretude.
GSK generates the majority of its HIV sales from its dolutegravir franchise, comprising three-drug regimens — Triumeq and Tivicay — and two-drug regimens — Dovato and J&J (JNJ - Free Report) -partnered Juluca. The launch of the two-drug regimens has been eroding sales and market share of the three-drug regimens following their launch. During the first quarter, GSK and J&J’s Juluca and Dovato contributed around 40% to total HIV sales.
While sales of the dolutegravir franchise were up 5% in the U.S. market, they rose 3% in Europe. In International markets, sales were up 14%.
Sales of Triumeq declined 14%, while Tivicay sales rose 4% during the quarter.
Sales of the immuno-inflammation drug Benlysta were up 8% in the quarter, reflecting growth across all regions, especially in the European and International markets.
Sales of the respiratory drug Nucala were up 13% during the quarter, driven by growth across the ex-U.S. markets.
Oncology sales more than doubled during the quarter, driven by strong patient growth for Zejula, Jemperli and Ojjaara sales. The upside was partially offset by Blenrep sales, which did not generate any sales during the quarter following thedrug’s withdrawal from the U.S. market in 2022.
Sales of Zejula rose 27% in the quarter. Jemperli added £80 million to the top line in the first quarter compared with £60 million in fourth-quarter 2023. The uptick was driven by new patient starts in the United States.
The recently launched blood cancer drug Ojjaara generated £52 million in product sales during the quarter compared with £29 million in fourth-quarter 2023. The FDA approved the drug last September to treat myelofibrosis patients with anemia.
Sales of General Medicines were up 1% during the quarter. This upside was driven by solid sales growth of asthma inhaler Trelegy Ellipta across all regions and the increased demand for antibiotics in the International market. The upside was offset by a decline across the Established Respiratory portfolio following the adverse impact of removing the Average Manufacturer Price (AMP) cap on Medicaid drug prices in the United States.
Trelegy Ellipta sales surged 33% during the quarter, owing to strong growth in all regions. Sales of Anoro Ellipta rose 3%. Key established drug Advair/Seretide sales were down 13%, while sales on Revlar/Breo Ellipta were up 4%.
Vaccine Sales Rise
GSK’s first-quarter vaccine sales increased by 16%, driven by demand for the RSV vaccine Arexvy in the United States and strong uptake for the Shingrix vaccine in ex-U.S. markets. During the quarter, GSK did not record any sales from the COVID-19 booster vaccine co-developed in partnership with Sanofi.
The first approved RSV vaccine for older adults, Arexvy, generated £182 million during the quarter, reflecting strong consumer uptake. Per management, Arexvy maintained around two-thirds of the share of retail vaccinations in the quarter. Though sales fell significantly when compared with fourth-quarter 2023 sales of £529 million, the downside was in line with anticipated seasonality patterns.
Shingrix sales rose 18% during the quarter, driven by strong private uptake and public funding expansion in ex-U.S. markets.
In Meningitis vaccines, Bexsero sales rose 3%, while sales of Menveo rose 41%. Sales of the influenza vaccine, Fluarix, were up 8%. Sales of Established vaccines were up 7% year over year.
Operating Expenses
Core selling, general and administration (SG&A) costs decreased 2% to £1.98 billion. The downside in costs was due to the reversal of the legal provision related to Zejula royalty dispute recorded in the year-ago period.
Core research and development (R&D) expenses rose 14% to £1.36 billion, driven by continued investment by management for pipeline advancement.
2024 Guidance
GSK raised its guidance for 2024. Management expects sales to increase toward the upper end of the previously-announced guidance of 5-7% range (at CER). This upgrade comes after the company won the Zejula royalty dispute appeal and now expects royalty income to be slightly higher for the full year.
Management expects sales of specialty medicines to increase by a low double-digit percentage at CER in 2024, while vaccine sales are expected to grow in high single-digit to low double-digit percentage at CER. However, management expects a mid-single-digit decline in turnover for the General Medicines segment.
Management expects the turnover growth rate in first-half 2024 to be higher than the second half. This is on account of the comparator to second-half 2023, which benefited from newly-launched vaccines and medicines.
The company expects core operating profit growth to increase between 9% to 11% at CER (previously a 7-10% rise). GSK also guided its core EPS, which is anticipated to grow in the range of 8-10% (previously a 6-9% rise).
Share price rose 3% in pre-market trading on May 1, likely due to the guidance raise. The stock has gained 11.8% year to date against the industry’s 9.6% fall.
Image Source: Zacks Investment Research
The above guidance excludes any revenues from its COVID-related products. If management were to add COVID sales, it expects full year growth in sales and core operating profit to be adversely impacted by one and two percentage points, respectively. Management does not expect any further COVID-19-related sales in 2024.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have risen from $4.25 to $4.43. During the same period, EPS estimates for 2025 have improved from $4.83 to $5.04. Year to date, shares of ANIP have risen 19.7%.
Earnings of ANI Pharmaceuticals beat estimates in each of the last four quarters. ANI delivered a four-quarter average earnings surprise of 109.06%.
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GSK Beats Q1 Earnings & Sales Estimates, Ups 2024 Guidance
GSK plc (GSK - Free Report) reported core earnings of $1.09 per American depositary share (“ADS”) in first- quarter 2024, beating the Zacks Consensus Estimate of 94 cents. Core earnings rose 16% year over year on a reported basis and 28% at a constant exchange rate (CER).
Quarterly revenues increased 6% on a reported basis and 10% at CER to $9.34 billion (£7.36 billion), beating the Zacks Consensus Estimate of $8.98 billion. The upside can be attributed to rising HIV and vaccine product sales, which was partially offset by the declining COVID-19 product sales.
GSK reports financial figures under three segments — Specialty Medicines, Vaccines and General Medicines.
All growth rates mentioned below are on a year-over-year basis and at CER.
Segment Discussion
Sales in the Specialty Medicines segment rose 17% despite a steep decline in Xevudy sales. Excluding Xevudy sales, revenues in the Specialty Medicines segment were up 19%. Sales growth of HIV, oncology and respiratory drugs was also strong.
Xevudy generated sales of £1 million in the first quarter compared with £13 million in fourth-quarter 2023. GSK markets Xevudy in collaboration with Vir Biotechnology (VIR - Free Report) . In 2022, the FDA withdrew the emergency use authorization (EUA) granted to GSK/Vir Biotechnology’s Xevudy. The withdrawal decision for the Vir Biotechnology-partnered antibody therapy was based on data that showed that it was unlikely for the Xevudy dose to be effective against the Omicron variant.
HIV sales rose 14% driven by sales of new HIV drugs — Juluca, Dovato, Cabenuva and Apretude.
GSK generates the majority of its HIV sales from its dolutegravir franchise, comprising three-drug regimens — Triumeq and Tivicay — and two-drug regimens — Dovato and J&J (JNJ - Free Report) -partnered Juluca. The launch of the two-drug regimens has been eroding sales and market share of the three-drug regimens following their launch. During the first quarter, GSK and J&J’s Juluca and Dovato contributed around 40% to total HIV sales.
While sales of the dolutegravir franchise were up 5% in the U.S. market, they rose 3% in Europe. In International markets, sales were up 14%.
Sales of Triumeq declined 14%, while Tivicay sales rose 4% during the quarter.
Sales of the immuno-inflammation drug Benlysta were up 8% in the quarter, reflecting growth across all regions, especially in the European and International markets.
Sales of the respiratory drug Nucala were up 13% during the quarter, driven by growth across the ex-U.S. markets.
Oncology sales more than doubled during the quarter, driven by strong patient growth for Zejula, Jemperli and Ojjaara sales. The upside was partially offset by Blenrep sales, which did not generate any sales during the quarter following thedrug’s withdrawal from the U.S. market in 2022.
Sales of Zejula rose 27% in the quarter. Jemperli added £80 million to the top line in the first quarter compared with £60 million in fourth-quarter 2023. The uptick was driven by new patient starts in the United States.
The recently launched blood cancer drug Ojjaara generated £52 million in product sales during the quarter compared with £29 million in fourth-quarter 2023. The FDA approved the drug last September to treat myelofibrosis patients with anemia.
Sales of General Medicines were up 1% during the quarter. This upside was driven by solid sales growth of asthma inhaler Trelegy Ellipta across all regions and the increased demand for antibiotics in the International market. The upside was offset by a decline across the Established Respiratory portfolio following the adverse impact of removing the Average Manufacturer Price (AMP) cap on Medicaid drug prices in the United States.
Trelegy Ellipta sales surged 33% during the quarter, owing to strong growth in all regions. Sales of Anoro Ellipta rose 3%. Key established drug Advair/Seretide sales were down 13%, while sales on Revlar/Breo Ellipta were up 4%.
Vaccine Sales Rise
GSK’s first-quarter vaccine sales increased by 16%, driven by demand for the RSV vaccine Arexvy in the United States and strong uptake for the Shingrix vaccine in ex-U.S. markets. During the quarter, GSK did not record any sales from the COVID-19 booster vaccine co-developed in partnership with Sanofi.
The first approved RSV vaccine for older adults, Arexvy, generated £182 million during the quarter, reflecting strong consumer uptake. Per management, Arexvy maintained around two-thirds of the share of retail vaccinations in the quarter. Though sales fell significantly when compared with fourth-quarter 2023 sales of £529 million, the downside was in line with anticipated seasonality patterns.
Shingrix sales rose 18% during the quarter, driven by strong private uptake and public funding expansion in ex-U.S. markets.
In Meningitis vaccines, Bexsero sales rose 3%, while sales of Menveo rose 41%. Sales of the influenza vaccine, Fluarix, were up 8%. Sales of Established vaccines were up 7% year over year.
Operating Expenses
Core selling, general and administration (SG&A) costs decreased 2% to £1.98 billion. The downside in costs was due to the reversal of the legal provision related to Zejula royalty dispute recorded in the year-ago period.
Core research and development (R&D) expenses rose 14% to £1.36 billion, driven by continued investment by management for pipeline advancement.
2024 Guidance
GSK raised its guidance for 2024. Management expects sales to increase toward the upper end of the previously-announced guidance of 5-7% range (at CER). This upgrade comes after the company won the Zejula royalty dispute appeal and now expects royalty income to be slightly higher for the full year.
Management expects sales of specialty medicines to increase by a low double-digit percentage at CER in 2024, while vaccine sales are expected to grow in high single-digit to low double-digit percentage at CER. However, management expects a mid-single-digit decline in turnover for the General Medicines segment.
Management expects the turnover growth rate in first-half 2024 to be higher than the second half. This is on account of the comparator to second-half 2023, which benefited from newly-launched vaccines and medicines.
The company expects core operating profit growth to increase between 9% to 11% at CER (previously a 7-10% rise). GSK also guided its core EPS, which is anticipated to grow in the range of 8-10% (previously a 6-9% rise).
Share price rose 3% in pre-market trading on May 1, likely due to the guidance raise. The stock has gained 11.8% year to date against the industry’s 9.6% fall.
Image Source: Zacks Investment Research
The above guidance excludes any revenues from its COVID-related products. If management were to add COVID sales, it expects full year growth in sales and core operating profit to be adversely impacted by one and two percentage points, respectively. Management does not expect any further COVID-19-related sales in 2024.
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Zacks Rank & Key Pick
GSK currently has a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is ANI Pharmaceuticals (ANIP - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have risen from $4.25 to $4.43. During the same period, EPS estimates for 2025 have improved from $4.83 to $5.04. Year to date, shares of ANIP have risen 19.7%.
Earnings of ANI Pharmaceuticals beat estimates in each of the last four quarters. ANI delivered a four-quarter average earnings surprise of 109.06%.