By Bhanvi Satija and Yadarisa Shabong
LONDON (Reuters) -GSK raised its 2025 sales and profit forecasts on Wednesday as its specialist HIV and cancer drugs posted double-digit growth, lifting the British company’s shares almost 7% to their highest level since May 2024.
GSK’s improving outlook comes as Chief Executive Emma Walmsley prepares to hand over to Luke Miels early next year, as the drugmaker navigates US tariffs and looks for new drugs to offset falling revenues as some of its best-selling drugs come off patent.
“We weren’t expecting any improvement in the forecast. These are fantastic numbers,” said Lucy Coutts, chief investment officer at wealth manager JM Finn, which owns shares in GSK, adding that Walmsley was leaving GSK in good shape for Miels.
“Now he has to fulfill the next five-year plan.”
PRESSURE ON VACCINE SALES IN THE US
GSK’s U.S. vaccine business was a rare weak point.
While global vaccine sales reached £2.68bn in the quarter ended September 30, beating analyst forecasts, the growth came mainly outside the US, where GSK reported a 15% drop in sales of its shingles vaccine, Shingrix.
Walmsley said that in the short term, the company remained “cautious regarding the US environment” for vaccines.
US Health Secretary Robert F. Kennedy Jr has targeted vaccines, cutting funding for research and dismissing the director of the Centers for Disease Control and Prevention.
French rival Sanofi last week reported lower sales of its flu vaccines in the United States and noted a “negative buzz” around vaccines in general. GSK said sales of its flu vaccines also declined in the United States due to competition.
Australian biotech CSL on Tuesday delayed plans to spin off its vaccines division, citing “increased volatility” and a bigger-than-expected drop in vaccination rates in the United States.
GSK maintained its 2025 forecast of a single-digit decline to broadly stable vaccine revenue, which accounted for just over a third of third-quarter revenue and, according to Walmsley, remained an important business for GSK in the long term.
FUTURE CHALLENGES FOR THE INCOMING CEO
Investors are counting on Miels to propel GSK to its annual revenue target of more than 40 billion pounds ($54 billion) by 2031. Analysts currently estimate sales at around 34 billion pounds.
“The number 40 is feasible and I support it,” Miels told analysts in a conference call following its results, although he refrained from giving details about his strategic plans for next year.
GSK expects annual revenue to increase between 6% and 7%, and earnings per share to increase between 10% and 12%. GSK said the forecast includes the tariffs enacted so far and the possible impacts of 15% tariffs in Europe.