Shingles vaccine Shingrix has been GlaxoSmithKline’s major growth driver, but during the pandemic, even it couldn’t draw on its full strength.
In 2020, Shingrix brought in sales of £1.99 billion ($2.71 billion). Its 11% year-over-year growth at constant currencies marked a clear slowdown for a product that more than doubled sales in 2019.
COVID-19 lockdowns played a key part in significantly slashing vaccination numbers, and as the pandemic continues to wreak havoc, GSK expects Shingrix disruptions in the U.S. until at least the second half of 2021.
Shingrix sales did tick up in the fourth quarter, with sales up 23% at constant currencies to £645 million ($880 million), reflecting a recovery in doctors’ visits in the U.S. and strong demand in Germany and China, Luke Miels, GSK’s president of pharmaceuticals, told investors on a call Wednesday. But he noted that adult monthly wellness visits in the U.S. were still down 11%.
To make matters worse, governments prioritizing COVID-19 immunization is “likely to have a significant impact on all the adult vaccinations, including Shingrix,” Miels said.
The CDC currently recommends that people leave at least a 14-day interval before and after getting COVID mRNA vaccines with any other vaccines. Combine that with the required dosing window between the two COVID shots, and Shingrix vaccinations could be delayed by several months, Miels said, adding that similar disruptions could also happen in Shingrix’s other main growth markets such as Germany and China.
Nevertheless, Miels stressed that the setback is only a “timing issue,” as the company expects sales to be “deferred, not lost,” he said.
COVID more broadly hurt GSK’s vaccines business, especially for some traditional shots such as those for hepatitis. U.S. back-to-school vaccinations were also disrupted as schools and universities delayed or canceled in-person classes. In 2020, the franchise chalked up sales of £6.98 billion ($9.53 billion), down 2% year over year. In 2021, GSK expects the unit to post flat to low-single-digit growth, assuming vaccination rates pick up in the second half of the year.
Outside of vaccines, GSK’s pharma business saw sales slip 3% to £17.06 billion, even though newer drugs such as respiratory therapies Trelegy and Nucala, as well as HIV two-drug regimens Juluca and Dovato, ginned up growth.
The pandemic hit GSK at a critical time for the company’s operations. The British pharma is in the middle of a two-year transition period—with 2021 being the second half—as it prepares for a separation of the consumer health unit to focus on biopharmaceuticals.
Continued further investment in drug R&D will still be a top priority at GSK to ensure long-term growth, “although the short-term disruption from the pandemic to our vaccine business as COVID immunization is now prioritized has impacted our guidance of 2021,” CEO Emma Walmsley said on the call.
For 2021, the GSK is expecting companywide sales to come in flat or grow by a low-single-digit percentage, and it projects its adjusted earnings per share will drop by a mid- to high-single-digit percentage—which, according to Jefferies, is below expectations. Management plans to provide updates on the roadmap to the post-consumer health era at a June event.