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GlaxoSmithKline plc (GSK - Free Report) reported core earnings of 77 cents per American depositary share in the second quarter of 2018, which missed the Zacks Consensus Estimate of 71 cents. However, earnings were up 10% at constant exchange rate (CER) compared with the year-ago figure.
Shares of Glaxo were down almost 1.7% on Apr 25. Moreover, the stock has gained 13.2% so far this year compared with the industry’s 0.9% growth.
Quarterly revenues rose 4% at CER to $9.9 billion (£7.3 billion), driven by a strong performance at the Vaccines segment and higher sales of new respiratory products. The top line beat the Zacks Consensus Estimate of $9.5 billion.
All growth rates mentioned below are on a year-over-year basis and at CER.
Quarterly Highlights
Sales were up 7% in the United States and 3% in the International markets. On the flip side, sales in Europe declined 1% year over year.
Glaxo reports financial figures under three segments: Pharmaceuticals, Vaccines and Consumer Healthcare.
The Pharmaceuticals division registered 1% increase in revenues at CER, driven by HIV drugs and new respiratory disease drugs, namely Nucala and the Ellipta portfolio. This upside was partly offset by a decline in sales of older respiratory products, including Seretide/Advair, Ventolin and Established Pharmaceuticals.
HIV sales increased 11% at CER on the back of 13% and 4% growth in the United States and Europe, respectively. International sales were also up 16% at CER. These encouraging numbers were driven by continued market share growth for both Triumeq and TivicHowever, Sales of another HIV drug named Epzicom/Kivexa tumbled 56% at CER, due to severe generic competition, particularly affecting the European market.
Notably, the company’s latest product from the HIV portfolio is Juluca (dolutegravir + rilpivirine), the first two-drug regimen, once-daily, single pill for HIV. The drug was approved in the United States last November and generated sales of £24 million compared with £5 million registered in the previous quarter.
Respiratory sales were down at 2% CER. Though in the International markets, sales increased 7% and it grew 5% in Europe, the metric declined 9% in the United States during the quarter under review. The sales rise from the Ellipta portfolio and Nucala, were offset by a fall in sales of older products like Seretide/Advair. Ventolin sales dropped 5% at CER.
Sales of new respiratory portfolio grew at 27%, including £26 millionquarterly contribution from the newly launched Trelegy Ellipta (only once-daily single inhaler triple therapy for COPD).
Notably, in April, Trelegy Ellipta gained the FDA approval for an expanded indication. The new indication was for the long-term, once-daily, maintenance treatment of airflow obstruction in patients with COPD, including chronic bronchitis and/or emphysema.
Immuno-inflammation drugs like Benlysta rose 29% in the quarter under discussion.
The new grouping of Established Pharmaceuticals comprises the previous Established Products, Cardiovascular, metabolic and urology plus other Pharma products. Established Pharmaceuticals sales decreased 5% in the quarter under review.
Sales in the Consumer Healthcare segment nudged up 3% at CER, as strong performances in Oral health and Skin health were partly offset by slower growth in the Wellness and Nutrition categories.
Sales from the Vaccines segment were impressive, having increased 16% at CER, primarily driven by higher sales of Shingrix and Hepatitis vaccines. Shingrix recorded sales of £167 million in the reported quarter, driven by higher demand and share gains.
Moreover, the company stated that it is rapidly building a coverage for Shingrix vaccine. Presently, more than 90% patients have access to Shingrix vaccine via both Medicare and commercial channels.
Sales of the meningitis vaccine, Bexsero, decreased 6% in the United States, while Menveo sales decreased 7% at CER, due to supply constraints in European and International markets.
New Deal
Glaxo also announced that it is investing $300 million in a genetic-testing company 23andMe. The company signed a four year collaboration with 23andMe to discover novel drug targets using human genetics as the basis for discovery.
The collaboration will combine 23andMe’s genetic resources and advanced data science skills, with the scientific medical and commercialization expertise of Glaxo.
2018 Outlook
Glaxo revised its outlook for 2018. The company now expects EPS growth of 7-10% at CER in 2018, if no Advair generics are launched this year. However, in the event of introduction of Advair generics in the U.S. market by October, Glaxo expects adjusted EPS of 4-7% at CER. The company earlier expected 4-7% EPS growth at CER in 2018, if no Advair generics are launched in 2018. However, in the probable event of Advair generics being introduced in the U.S. market by mid-2018, Glaxo anticipated its adjusted EPS to be flat to down 3% year over year at CER.
The company also announced a restructuring program aiming to improve competitiveness and cut costs by 400 million pounds annually by 2021.
The three companies, namely Mylan , Hikma Pharmaceuticals and Novartis (NVS - Free Report) , trying to bring a generic version of Advair to the market, have received a complete response letter (CRL) from the FDA. While Mylan and Hikma got a CRL last year, Novartis was forwarded the same this year, delaying the entry of generics in the U.S. market.
GlaxoSmithKline plc Price, Consensus and EPS Surprise
Lilly’s earnings per share estimates have increased from $5.15 to $5.20 for 2018 and from $5.47 to $5.55 for 2019 over the past 30 days. The company delivered a positive earnings surprise in all of the trailing four quarters, with an average beat of 10.15%. The stock has rallied 14.2% so far this year.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Glaxo (GSK) Q2 Earnings & Sales Beat Estimates, '18 View Up
GlaxoSmithKline plc (GSK - Free Report) reported core earnings of 77 cents per American depositary share in the second quarter of 2018, which missed the Zacks Consensus Estimate of 71 cents. However, earnings were up 10% at constant exchange rate (CER) compared with the year-ago figure.
Shares of Glaxo were down almost 1.7% on Apr 25. Moreover, the stock has gained 13.2% so far this year compared with the industry’s 0.9% growth.
Quarterly revenues rose 4% at CER to $9.9 billion (£7.3 billion), driven by a strong performance at the Vaccines segment and higher sales of new respiratory products. The top line beat the Zacks Consensus Estimate of $9.5 billion.
All growth rates mentioned below are on a year-over-year basis and at CER.
Quarterly Highlights
Sales were up 7% in the United States and 3% in the International markets. On the flip side, sales in Europe declined 1% year over year.
Glaxo reports financial figures under three segments: Pharmaceuticals, Vaccines and Consumer Healthcare.
The Pharmaceuticals division registered 1% increase in revenues at CER, driven by HIV drugs and new respiratory disease drugs, namely Nucala and the Ellipta portfolio. This upside was partly offset by a decline in sales of older respiratory products, including Seretide/Advair, Ventolin and Established Pharmaceuticals.
HIV sales increased 11% at CER on the back of 13% and 4% growth in the United States and Europe, respectively. International sales were also up 16% at CER. These encouraging numbers were driven by continued market share growth for both Triumeq and TivicHowever, Sales of another HIV drug named Epzicom/Kivexa tumbled 56% at CER, due to severe generic competition, particularly affecting the European market.
Notably, the company’s latest product from the HIV portfolio is Juluca (dolutegravir + rilpivirine), the first two-drug regimen, once-daily, single pill for HIV. The drug was approved in the United States last November and generated sales of £24 million compared with £5 million registered in the previous quarter.
Respiratory sales were down at 2% CER. Though in the International markets, sales increased 7% and it grew 5% in Europe, the metric declined 9% in the United States during the quarter under review. The sales rise from the Ellipta portfolio and Nucala, were offset by a fall in sales of older products like Seretide/Advair. Ventolin sales dropped 5% at CER.
Sales of new respiratory portfolio grew at 27%, including £26 millionquarterly contribution from the newly launched Trelegy Ellipta (only once-daily single inhaler triple therapy for COPD).
Notably, in April, Trelegy Ellipta gained the FDA approval for an expanded indication. The new indication was for the long-term, once-daily, maintenance treatment of airflow obstruction in patients with COPD, including chronic bronchitis and/or emphysema.
Immuno-inflammation drugs like Benlysta rose 29% in the quarter under discussion.
The new grouping of Established Pharmaceuticals comprises the previous Established Products, Cardiovascular, metabolic and urology plus other Pharma products. Established Pharmaceuticals sales decreased 5% in the quarter under review.
Sales in the Consumer Healthcare segment nudged up 3% at CER, as strong performances in Oral health and Skin health were partly offset by slower growth in the Wellness and Nutrition categories.
Sales from the Vaccines segment were impressive, having increased 16% at CER, primarily driven by higher sales of Shingrix and Hepatitis vaccines. Shingrix recorded sales of £167 million in the reported quarter, driven by higher demand and share gains.
Moreover, the company stated that it is rapidly building a coverage for Shingrix vaccine. Presently, more than 90% patients have access to Shingrix vaccine via both Medicare and commercial channels.
Sales of the meningitis vaccine, Bexsero, decreased 6% in the United States, while Menveo sales decreased 7% at CER, due to supply constraints in European and International markets.
New Deal
Glaxo also announced that it is investing $300 million in a genetic-testing company 23andMe. The company signed a four year collaboration with 23andMe to discover novel drug targets using human genetics as the basis for discovery.
The collaboration will combine 23andMe’s genetic resources and advanced data science skills, with the scientific medical and commercialization expertise of Glaxo.
2018 Outlook
Glaxo revised its outlook for 2018. The company now expects EPS growth of 7-10% at CER in 2018, if no Advair generics are launched this year. However, in the event of introduction of Advair generics in the U.S. market by October, Glaxo expects adjusted EPS of 4-7% at CER. The company earlier expected 4-7% EPS growth at CER in 2018, if no Advair generics are launched in 2018. However, in the probable event of Advair generics being introduced in the U.S. market by mid-2018, Glaxo anticipated its adjusted EPS to be flat to down 3% year over year at CER.
The company also announced a restructuring program aiming to improve competitiveness and cut costs by 400 million pounds annually by 2021.
The three companies, namely Mylan , Hikma Pharmaceuticals and Novartis (NVS - Free Report) , trying to bring a generic version of Advair to the market, have received a complete response letter (CRL) from the FDA. While Mylan and Hikma got a CRL last year, Novartis was forwarded the same this year, delaying the entry of generics in the U.S. market.
GlaxoSmithKline plc Price, Consensus and EPS Surprise
GlaxoSmithKline plc Price, Consensus and EPS Surprise | GlaxoSmithKline plc Quote
Zacks Rank and Stock to Consider
Glaxo carries a Zacks Rank #3 (Hold).
A better-ranked stock from the same space is Eli Lilly and Company (LLY - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilly’s earnings per share estimates have increased from $5.15 to $5.20 for 2018 and from $5.47 to $5.55 for 2019 over the past 30 days. The company delivered a positive earnings surprise in all of the trailing four quarters, with an average beat of 10.15%. The stock has rallied 14.2% so far this year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>