GlaxoSmithKline's Shingrix zooms toward blockbuster status despite tight supply

GlaxoSmithKline is expecting £700 million to £750 million in Shingrix sales this year in the early stages of a launch. (GSK)

GlaxoSmithKline has several new drugs beefing up its top line as Advair generics march inexorably toward market. But no rollout has compared to Shingrix, the new shingles vaccine that’s trounced expectations and quickly leapt onto a blockbuster trajectory. 

Shingrix sales of £286 million for the quarter blew past analyst expectations of £203 million, according to a note from Jefferies analyst Ian Hilliker, bringing its top-line contribution to £563 million so far this year. Thanks to that outperformance, GSK hiked its sales forecast for the vaccine to £700 million to £750 million this year.

And that, in turn, was the biggest reason why GSK pumped up its 2018 earnings expectations, regardless of whether the company faces Advair generics this year.

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Other new drugs, Juluca to treat HIV and Trelegy for COPD, brought in £37 million and £42 million for the quarter, respectively. Overall, GSK brought in £8.1 billion in sales, up 3%, and earnings amounted to 28.8 cents per share. Its new, higher earnings outlook calls for EPS growth of 8% to 10% at constant exchange rates.

RELATED: GSK's Shingrix blows past sales projections, pushing 2018 estimates to $600M

Looking ahead, however, all is not rosy for Shingrix. Glaxo executives warned on Wednesday that supply constraints will limit its sales growth in the near term. Shingrix has only launched in the U.S. and Canada, and the company is in the process of building capacity to support rollouts in other markets.

About 7 million doses have been administered to 4.5 million adults in the U.S., the company said. On Wednesday’s conference call, Luke Miels, global pharmaceuticals president, noted that the strong performance comes ahead of any direct-to-consumer advertising and “on the back of tight supply.” 

“We need to get the supply expanded as fast as possible, because we can pretty much sell anything that we can make now in the U.S.," he said.

RELATED: GlaxoSmithKline mulls respiratory exit to support big bet on cancer R&D 

But GSK's positive numbers came at the same time as some pipeline setbacks. On Wednesday, the company reported three trial failures in its respiratory unit, and an R&D executive told S&P Global Market Intelligence the company is mulling an exit in the field to focus on cancer.

That would be quite a turnabout for the company, which has long emphasized its respiratory business, including Advair follow-ups Breo, Anoro and Nucala, plus its three-in-one inhaler, Trelegy, approved late last year. Plus, GSK traded away its marketed cancer drugs to Novartis in 2014, though it held on to some pipeline assets.

In the third quarter, Shingrix was joined in the growth category by several new respiratory offerings. The company's Ellipta portfolio posted third-quarter sales of £500 million, up 34% at constant exchange rates, while sales for Nucala grew 62% to £145 million.

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