GSK, touting its post-spinoff future, talks up innovation and vaccine business

In GSK’s second-quarter earnings discussions, the company presented itself as a “new focused biopharma company.” It’s the first call since the July 18 demerger of its consumer health unit, now dubbed Haleon.  

When GSK separated from its consumer health unit, analysts and investors wondered whether the company would turn to M&A to up its momentum. While the company did point to two such deals in an earnings call with the press, CEO Emma Walmsley went on to stress the importance of innovation and in particular its phase 3 RSV candidate. In fact, Walmsley calls the overall vaccines business a “real strategic strength.”

During the press call, Walmsley said the company has been “extremely focused” on the demerger and subsequent transformation of GSK since 2017 and is confident on the outlook for both companies over the next five years. The company said in its media presentation that the demerger allows execs to “unlock the potential” of the company.

And the potential from the demerger was largely delivered. The company achieved sales growth of 13%, hitting 6.9 billion pounds sterling. The specialty medicines segment grew 35% to 2.7 billion pounds, thanks to HIV meds Dovato and Cabenuva. Vaccines were up 3% and 24% with the exclusion of COVID-19 vaccines. Shingrix was the star of the quarter, delivering record sales of more than 731 million pounds.

Demand for vaccines led the company to increase its sales growth outlook from between 5% and 7% to between 6% and 8%.

In terms of M&A activity, the company reiterated in its media presentation the recent proposed acquisition of Affinivax, a Boston-based vaccine company, and its recent acquisition of Sierra Oncology.

But innovation is what Walmsley was most excited about, namely its RSV vaccine for older adults. The company was the first to announce positive results in a phase 3 trial for the respiratory virus.

“The world has been waiting for more than 50 years for an RSV vaccine, so this is a very significant scientific achievement, which will have a huge impact on human health,” the company said in its presentation. 

“The scale of the unmet need here means that analysts do view this as a multibillion-pound opportunity for the market, there is no question on that,” Walmsley said on the earnings call, adding that the company is engaging with regulators and plans to present detailed results at next summer’s Advisory Committee on Immunization Practices meeting.

Walmsley called the company's overall vaccines business a “real strategic strength,” including Shingrix, the RSV in adults vaccine and the pneumococcal portfolio. However, the flu vaccine is “quite a small part of our business,” Walmsley said.

GSK recently agreed to supply Canada with as many as 80 million doses of its adjuvanted pandemic flu vaccine, Arepanrix, plus at least 4 million yearly doses of seasonal prophylactic Flulaval Tetra as part of its 20-year flu season partnership with the country.