GlaxoSmithKline's sales soar thanks to Shingrix, COVID-19 antibody but oncology lags

Ever since the pandemic started holding back GlaxoSmithKline’s Shingrix, the company has repeatedly said its flagship shingles vaccine will return to growth. Now, the British pharma giant has gotten a taste of what that rebound will look like—even though CEO Emma Walmsley still warns of speed bumps ahead.

Shingrix and Glaxo's Vir Biotechnology-partnered COVID antibody drug Xevudy gave the drugmaker a huge revenue boost in the first quarter. Shingrix more than doubled sales year over year to 698 million pounds ($877 million) and easily topped Wall Street expectations by 32%. Xevudy, with sales of 1.31 billion pounds ($1.64 billion), contributed 25 percentage points to GSK’s total 32% quarterly sales growth.

But as GSK pointed out, these gains likely won’t last for all of 2022.

Looking ahead, Shringrix could still see some “bumpy quarters” just like it did last year, Walmsley told reporters during a press call Wednesday. 

“But on the fundamentals of underlying demand, we have seen the shingles vaccine bump up to being the second-recommended vaccine after COVID,” she said.

Shingrix’s strong showing was mainly the result of a large order from a U.S. retail pharmacy chain, GSK chief commercial officer Luke Miels told investors during a separate call. After the stocking, U.S. retailers had an inventory of about 1.2 million doses of Shingrix at the end of the first quarter, up from 1.1 million doses at the end of 2021. Increased uptake in Germany and geographic expansion also helped, he said.

The increased stocking reflects an underlying demand as retail pharmacy chains are good at judging Shingrix’s demand during the pandemic, Miels said. 

“They ordered it, because they think they can sell it,” he said.

But Shingrix is “not out of the woods yet,” Miels said. COVID cases are going up again in some parts of the U.S., and the FDA’s March authorizations of mRNA COVID vaccines as second boosters for people ages 50 and older could bump shingles vaccination off the priority list.

The company still expects Shingrix to deliver double-digit sales growth and reach record sales for 2022.

As for Xevudy, the FDA has recently restricted the drug’s use and the U.S. federal government has halted its distribution because it’s not active against the omicron subvariant BA.2. As a result, GSK expects Xevudy sales to mostly stop for the rest of the year. 

GSK's projection for Xevudy mirrors Roche, which is warning a slowdown for its COVID products, including Regeneron-partnered COVID antibody. Johnson & Johnson also stopped giving COVID vaccine guidance because of waning sales.

Elsewhere in GSK's portfolio, its oncology franchise remains under pressure. PARP inhibitor Zejula brought in 98 million pounds, a decline from the 108 million pounds it got in the fourth quarter and 11% below consensus.

In Zejula’s main use of ovarian cancer, diagnosis rates remain depressed and are down about 29% compared with pre-COVID levels, Miels said. U.S. initiation of PARP inhibitors across all lines of treatment has dropped from 1,629 in the first quarter of 2020 to 1,198 in the fourth quarter of 2021, Miels noted, citing IQVIA data.

“I frankly thought we would’ve seen a recovery by now just because of the underlying biology and the symptoms, but that’s still lagging,” Miels said. He now believes the diagnosis might recover in the second half of the year at the earliest.

But the good news is that among patients who do start on a PARP drug, Zejula is getting roughly every one out of two patients in a tie with AstraZeneca and Merck & Co.’s Lynparza, Miels said.

There could soon be another competitor. Clovis Oncology recently reported positive data for its PARP underdog Rubraca in a broad population of ovarian cancer patients regardless of biomarker status in the first-line maintenance setting.

All told, GSK’s first-quarter haul came in at 9.78 billion pounds, including 7.15 billion pounds from the biopharma franchise, which will form the “new GSK” after the expected consumer health spinoff mid-year. Excluding any contributions from COVID products, GSK expects sales to grow between 5% to 7% at constant currencies in 2022.