GSK profit misses as vaccine sales disappoint, stockpiling eases

The company said it still expects adjusted earnings per share for the year to decline in the range of 1% to 4%

By Pushkala Aripaka and Ludwig Burger

(Reuters) - Britain's GSK on Wednesday missed second-quarter profit estimates following reduced sales of its existing vaccines and as patients used up treatments stockpiled during coronavirus lockdowns that have eased.

The world's largest vaccine maker also surprised the market with the announcement it did not receive any government funding to produce its efficacy booster technology, which is being used in many potential coronavirus vaccine collaborations, including one with France's Sanofi.

GSK shares traded down, falling 2% at 1,1575 pence as vaccine sales of 1.1 billion pounds ($1.43 billion) fell short of the 1.26 billion pounds consensus https://www.gsk.com/en-gb/investors/analyst-consensus/analyst-consensus.

It had rallied earlier on Wednesday following the announcement of a deal to supply Britain with the potential coronavirus vaccine it is working on with Sanofi.

Rather than developing its own vaccine in the global race to combat the pandemic, GSK has focused on contributing its adjuvant technology to at least seven other global firms.

Lockdowns slowed the take-up of other kinds of immunisation.

GSK said inoculation of children was back to pre-COVID-19 levels, but adolescent and adult vaccination was not.

"In the second quarter, with lockdown measures, we have seen an impact on people's willingness, or being able to access vaccines," Chief Executive Emma Walmsley said on a media call, adding there were early signs the attitude was changing.

Asked about the price agreed in the deal with Britain, Walmsley only said GSK does not expect to profit from the product during the pandemic.

She said any short-term earnings would be partly be reinvested into pandemic preparedness and donated to developing countries.

Revenue from GSK's shingles vaccine, Shingrix, a blockbuster, also fell, but was above analyst expectations, while group turnover and adjusted earnings per share in the three months ended June 30 missed analyst consensus.

For the full year, the company expects annual earnings to decline in the range of 1% to 4%, unchanged from previous forecasts.

Sanofi raised its 2020 earnings forecast on Wednesday after strong second-quarter results.

($1 = 0.7718 pounds)

 

(Reporting by Pushkala Aripaka, Ankur Banerjee in Bengaluru; and Ludwig Burger in Frankfurt; Editing by Bernard Orr and Barbara Lewis)