2017 revenue: $39.24 billion (£30.19 billion)
2016 revenue: $37.93 billion (£27.89 billion)
Headquarters: London, United Kingdom
It was something of a rebuilding year for GlaxoSmithKline in 2017. It was CEO Emma Walmsley's first at the helm, and under her direction the company turned over top management, tapped new execs and narrowed its R&D focus. It also won three blockbuster approvals for shingles vaccine Shingrix, COPD med Trelegy and HIV drug Juluca—drugs that GSK needs to pay off in the years to come.
Along the way, GSK generated £30.19 billion ($39.24 billion) last year, or 3% above 2016's sales at constant exchange rates. Pharmaceutical sales grew 3%, compared to 2% for consumer healthcare and 7% for vaccines. A respectable showing, yes, but it depended in part on other drugmakers' failures—specifically, their failures to win approval for a generic version of GSK's respiratory stalwart Advair.
And now, it'll be up to the London drugmaker to make the most of those three key launches and keep its other franchises in gear as Advair comes under continued pricing pressure and, potentially this year, generic competition.
Meanwhile, Walmsley said GSK would streamline on the R&D side to put the spotlight on its strengths and re-commit to a field it had previously decided to downplay. The company said it would offload 30 R&D programs to focus in on respiratory meds, HIV, inflammation and, in a U-turn from GSK's previous route, oncology. The cancer push comes just a couple years after former CEO Andrew Witty decided to trade away GSK's marketed cancer drugs to Novartis in exchange for that company's vaccine assets.
Walmsley also shook up corporate leadership by replacing dozens of top managers, promoting from within and hiring from the outside. Walmsley poached Luke Miels from AstraZeneca to head GSK's pharma business—a hire that riled AZ enough to sue—and recruited Hal Barron, formerly Roche's R&D chief, from the Alphabet-funded anti-aging venture Calico to head up GSK's own R&D efforts.
The shake-ups won kudos from GSK-watchers, but the company has a ways to go in persuading skeptical investors. Execs may have tried to focus attention on the new launches, but investors didn't fully buy into their excitement. GSK's share price slipped 15% over the course of 2017, a bigger decline than any other stock in Big Pharma, according to a report from EP Vantage.
But at the same time, the company also climbed to the top of the vaccine industry with $7.1 billion in global sales, outpacing Merck's $6.5 billion, Sanofi's $6.25 billion and Pfizer's $6 billion. That's without much contribution yet from Shingrix, which analysts believe will grow to blockbuster sales in the coming years.
Already, just a few months after its launch, prescription data demonstrate a strong rollout, according to a recent Deutsche Bank note, and Shingrix eclipsed sales estimates in the first quarter of 2018. Meningitis shot Bexsero is another key vaccine expected to keep chipping in growth for the unit.
Looking forward, the Advair situation continues to play an important—if uncertain—role at GSK. Multiple generic companies are gunning for the chance to launch the first copycat to that drug, which generated $4.4 billion around the world last year. Hikma recently suffered a high-profile rejection, but Mylan maintains that it expects FDA approval later this year. Glaxo has set out forecasts both with and without an Advair generics launch in 2018: Core earnings per share growth of 4% to 7% without a launch, and flat to a negative 3% with the copies.
Another showdown looms in HIV. With a new approval for Juluca, GSK will face off against Gilead Sciences' new Biktarvy, a med analysts have pegged to bring in $6 billion to $10 billion at peak and one that also snagged a 2017 approval.