GSK confirms Arexvy is a blockbuster but says the RSV battle has just begun

Beaten to the punch by Pfizer in developing a vaccine for COVID, GSK has regained some of its lost luster as a vaccine powerhouse with its advancement of respiratory syncytial virus (RSV) shot Arexvy.

Wednesday, when GSK reported its quarterly and annual earnings, it confirmed that Arexvy was blockbuster in its first year on the market. And it took the company just two quarters—or “four months” as CEO Emma Walmsley was quick to point out during a conference call—to accomplish the feat as Arexvy generated sales of 1.2 billion pounds sterling ($1.5 billion).

Making the achievement that much more satisfying for the British pharma major is that it stared down a challenge from Pfizer. A day earlier, Pfizer reported 2023 sales of its RSV vaccine Abrysvo at $890 million. 

While taking its victory lap and predicting a peak sales projection of 3 billion pounds ($3.8 billion) for Arexvy, GSK recognizes that the market is evolving and that its fast start in RSV is no guarantee of continued success.

The company needs to look no further than its fourth-quarter results to see there’s reason for concern as it appears that Pfizer is playing catch up. Fourth-quarter sales of Arexvy came in at 529 million pounds ($671 million), which was a decline from its showing in the third quarter when the shot generated revenue of 709 million pounds ($862 million). Meanwhile, Pfizer’s quarterly tabulation on Abrysvo showed an uptick, from $375 million in the third quarter to $515 million in the fourth quarter.

“We’re very pleased with the launch so far and the 2023 performance but our mindset is, this is the first round of a multi-round fight,” Luke Miels, GSK’s chief commercial officer, said on the call. “And in 2024, of course, we’ve got a third boxer jumping into the ring to make things interesting.”

The new contender is Moderna, which has developed an mRNA vaccine that has shown comparable efficacy in preventing RSV. The mRNA specialist appears set up in the first half of this year to join the battle to vaccinate people 60 and older against the virus.

With most of the RSV sales limited so far to the U.S., the vaccine battle will become more global in the coming years, with much work yet to accomplish.

For example, in the case of Arexvy, of the 39 countries where it is approved, nine have issued recommendations and just four have signed off on reimbursement deals, said Miels. The GSK exec added that “it’s early days” in the launch and that China is a large target for the company.

In the U.S., with just 10% of the eligible population vaccinated against RSV, there’s still lots of ground to plow.

“I think the pie is going to grow," Miels said. "The level of awareness is remarkable already. I think it’s 86% awareness for individuals in the U.S. around RSV. The willingness to prescribe and recommend on the part of doctors is very, very positive. We just don’t know how the other two competitors are going to behave going into the year.”

GSK also is pointing to its attempts to grow the pie by securing an approval to vaccinate at-risk individuals aged 50 to 59.

As for the early RSV battle, GSK has won out so far with superior execution. Third Bridge healthcare analyst Lee Brown said there is little separating Arexvy from Pfizer’s Abrysvo. In the long term, however, he sees Moderna as a growing threat.

“We believe Moderna’s mRNA-1345 will be disadvantaged due to its late market entry, despite having very good safety and efficacy,” Brown wrote. “Moderna can gain market leadership via future combination vaccines. As such, Moderna's technology platform may position it for the most success over the longer term.” 

The success of Arexvy helped GSK’s vaccine division deliver a 25% increase in sales over 2022. Shingles vaccine Shingrix rebounded from a disappointing third-quarter performance (825 million pounds), posting sales of 908 million pounds ($1.15 billion) in the fourth quarter to reach 3.45 billion pounds ($4.4 billion) for the year.

For the year, GSK reported sales of 30.3 billion pounds ($38.5 billion), good for a 5% increase. Taking sales of COVID products out of the equation, it was an increase of 14%.

After delivering its full-year results, GSK touted its long-term prospects, expecting revenue of 38 billion pounds ($48 billion) by 2031, which is up from a previous forecast of 33 billion pounds ($42 billion). Over the next four years, the company expects to launch a dozen products with $2 billion each in peak sales potential.