GSK's second-quarter revenue falls 2% as vaccine sales hit by COVID-19 pandemic

Headline results for the second quarter:

  • Prescription drug sales: £4.1 billion ($5.3 billion), down 5%
  • Overall revenue: £7.6 billion ($9.9 billion; forecasts of £7.7 billion), down 2%
  • Profit: £2.4 billion ($3.1 billion), versus £1.1 billion ($1.4 billion) in the prior year         

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"The fundamentals of [our] business remain strong," remarked CEO Emma Walmsley, adding "as expected, our performance this quarter was disrupted by COVID-19, particularly in our vaccines business, as visits to healthcare professionals were limited due to lockdown measures."

GlaxoSmithKline said COVID-19-related customer stock-building in the first quarter, mostly in Europe and the US, have since "broadly reversed, with only a minor [Tivicay] impact in Europe and the US remaining." The company noted that the second quarter also saw lower levels of new patient prescriptions in both regions, as well as reduced market demand for allergy and antibiotic products in international markets and pressure on net prices in the US.

Meanwhile, GlaxoSmithKline explained that its profit for the quarter was helped by booking £1.6 billion ($2.1 billion) in other operating income, compared to expenses of £63 million ($82 million) in the year-ago period.

Other results:

  • Vaccine sales: £1.1 billion ($1.4 billion), down 29%
    • £323 million ($419 million), down 16%, hit by a pandemic-related decrease in wellness visits and vaccination rates in the US, while performance was "strong" in Germany due to underlying demand in post-lockdown conditions  
    • £108 million ($140 million), down 31%, reflecting lower demand across all regions due to vaccinations being de-prioritised during COVID-19
    • £38 million ($49 million), down 39%, also hit by lower demand in all regions due to COVID-19, although it gained market share in the US
    • £15 million ($19 million), down 12%
  • HIV product sales: £1.2 billion ($1.6 billion), down 2%, with sales impacted by customer destocking following stockbuilding in the first quarter due to COVID-19, mainly on Tivicay and Triumeq
    • £586 million ($761 million), down 9%
    • £373 million ($484 million), down 9%
    • £113 million ($147 million), up 35%
    • £68 million ($88 million)
  • New respiratory product sales: £883 million ($1.1 billion), up 17%
    • Ellipta product sales: £642 million ($833 million), up 15%, with growth in AnoroIncruse and Relvar/Breo products, as well as a 62% gain in Trelegy Ellipta, which brought in £194 million ($252 million)
    • £241 million ($313 million), up 24%
  • £177 million ($230 million), up 18%, including sales of £89 million ($116 million) for the subcutaneous formulation
  • £77 million ($100 million), up 35%, with sales comprising £47 million ($61 million) in the US and £30 million ($39 million) in Europe
  • Established pharmaceuticals sales: £1.8 billion ($2.3 billion), down 17%, reflecting destocking and lower demand for antibiotics due to the pandemic
  • Established respiratory product sales: £805 million ($1 billion), down 12%, impacted by generic albuterol substitutes on Ventolin in the US, as well as COVID-19-related destocking in Europe and allergy market contraction in Japan
    • £421 million ($547 million), up 2%
  • Consumer healthcare sales: £2.4 billion ($3.1 billion), up 25%, with China returning to growth as mandated retailer shutdowns were lifted

Looking ahead:

GlaxoSmithKline continues to expect adjusted earnings per share this year to decline in the range of 1% to 4% at constant exchange rates. The company noted that its guidance "is dependent in particular on timing of a recovery in vaccination rates, particularly in the US, which we anticipate in the third quarter." However, it warned that if there was "a delay in this recovery, we could see a significant impact in 2020," with a delay of three months expected to hit adjusted earnings per share by 5 percentage points.

Still, Walmsley indicated that the company has been seeing "good underlying demand for our major products," and it is "confident this will be reflected in future performance when the impact of COVID-19 measures eases."

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