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GSK shares fall as vaccine sales drop 2% in third quarter despite higher profits

GSK shares fell on 28 October after it reported a 2% drop in third-quarter vaccine sales to £2.6bn, even though group sales and core operating profit rose. The two outlets differ on the size of the share fall and of the drop in Arexvy sales.

2 outlets · 0L · 1C · 1R First reported Account updated
Image: City A.M.
Image: Evening Standard

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The story, neutrally told

Mixed · 2GSK shares fell sharply in early trading on Wednesday 28 October after the company reported that vaccine sales fell 2% to £2.6bn in the third quarter, the three months to 30 September. Mixed · 2City A.M. said the shares slumped by up to 5%, their steepest fall since April, while the Evening Standard put the fall at 7% in morning trading. Mixed · 2The fall came despite results that beat expectations: City A.M. reported turnover of £8.9bn, 5% higher than a year earlier and 1% above analyst forecasts, and the Evening Standard reported core operating profit up 5% to £3.08bn against £2.93bn expected.

Centre · 1Pre-tax profit was lower, at £1.94bn against £2.5bn a year earlier, according to the Evening Standard. Mixed · 2Growth came from specialty medicines and cancer drugs. City A.M. said injectable HIV and oncology drugs each grew by double digits, and the Evening Standard said specialty medicines rose 15% and cancer treatments 23%. Mixed · 2Sales of the RSV vaccine Arexvy fell sharply, by 14% to £0.2bn according to City A.M. and by 24% amid lower US sales according to the Evening Standard; the Standard also reported a 5% fall in shingles vaccine Shingrix, while City A.M. noted a 12% rise in meningitis vaccine sales.

Mixed · 2Chief executive Luke Miels said GSK had delivered another strong quarter, with key growth drivers and new launches performing well, and that it remained focused on operational delivery, execution and accelerating R&D. Mixed · 2Analysts were cautious. Chris Beauchamp of IG said vaccine weakness points to tougher trading in the coming quarters and that £18 looks like the share price floor for now; Dan Coatsworth of AJ Bell said Miels must build a pipeline of new drugs before the loss of exclusivity on dolutegravir, adding that the update shows he still has plenty of work to do. Shore Capital, which rates the stock a buy, said GSK is shedding its reputation as a perennial disappointment. Mixed · 2In July GSK announced £1.9bn of cost savings over three years to fund investment and R&D and offset the dolutegravir patent expiry, and a plan to close its Stevenage R&D hub and open a new site in Cambridge; City A.M. put the Cambridge campus at £400m.

Centre · 1The Evening Standard added that GSK confirmed in February that around 350 R&D jobs in the US and UK were going, and that some support roles were affected by cost cutting in July.

Every sentence links to the reporting it rests on. The pill in front of each says where its sources sit: Left, Centre or Right when one side supplies at least half of them, Mixed when they are evenly split. The number is how many outlets it cites.

Left0 outlets

No left outlet in our sources has covered this story yet.

Centre1 outlet

Framing
Presents falling vaccine sales as taking the shine off an otherwise better-than-forecast set of results, with attention on pressure on the new chief executive.
Emphasis
Profit figures including lower pre-tax profit, Shingrix and Arexvy declines, the dolutegravir patent cliff and job cuts.
Leaves out or plays down
Does not mention the Cambridge campus cost, the 12% meningitis vaccine rise or the share price's year-to-date level.
Charged language
“take shine off earnings”“tumbled”
For example
“falling vaccine sales overshadowed a better-than-forecast rise in quarterly profits” — Evening Standard
“the latest update is a reminder Miels still has plenty of work to do” — Evening Standard

Right1 outlet

Framing
Leads on the share price slump and what it means for investors, with analyst views on the stock's outlook and GSK's ambitions against AstraZeneca.
Emphasis
Market reaction, revenue beat, the IG and Shore Capital analyst views, the Cambridge campus and catching up with AstraZeneca.
Leaves out or plays down
Does not mention core operating profit, lower pre-tax profit, the Shingrix decline or the dolutegravir patent expiry.
Charged language
“medicines titan”“slumped”“mega-campus”“pharma giant”
For example
“GSK shares have fallen the steepest since April” — City A.M.
“as it races to catch up with Astrazeneca and its US peers” — City A.M.

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