GlaxoSmithKline's Shingrix beats expectations again in Q2 despite supply constraint

shingrix
GlaxoSmithKline launched Shingrix in the U.S. in late 2017. (GSK)

GlaxoSmithKline's hot shingles vaccine Shingrix has routinely beaten expectations since its U.S. rollout, and its second-quarter performance was no different. The vaccine bested Street sales estimates by 43% despite warnings from the company that supply has had trouble keeping up with demand. 

In the second quarter, Shingrix pulled in £167 million ($219 million) in sales, soaring past analyst estimates of £117 million. With the performance, GSK raised its full-year guidance for the shot to between £600 million and £650 million, up from a previous estimate that the shot would generate about £450 million this year.

The performance comes despite warnings by the company and CDC that supplies have been tight due to higher than expected demand. Last month, a company spokesman said healthcare providers are vaccinating against shingles "at a rate many times that of prior years." Due to the "unprecedented" demand, Glaxo boosted its U.S. supply, he said; the company also put limits on orders and delayed shipments to manage inventory.

On Wednesday, GSK CEO Emma Walmsley confirmed that GSK has enough stock to meet its £600 million to £650 million guidance range. She said GSK expects Shingrix sales to keep growing "through next year and for it to be a very material contributor to growth for the company." What's more, because of all of the press the shot has generated, the company hasn't yet kicked off DTC advertising for the vaccine, global pharma president Luke Miels said on the conference call.

Glaxo is investing to boost capacity for both the shingles vaccine and for its meningitis portfolio. 

As the U.S. rollout gains steam, the company has introduced Shingrix in Canada and kicked off a limited launch in Germany, Miels told analysts. The company has allocated some supply for a limited launch in Japan, as well.

In all, Glaxo's vaccines business outgrew both pharmaceuticals and consumer health, posting a year-over-year revenue increase of 16% at constant exchange rates, compared with 1% for pharma and 3% for consumer health. While Shingrix posted impressive sales figures, the company's meningitis and influenza vaccines posted year-over-year sales declines of 3% and 14%, respectively. 

Looking ahead, GSK CFO Simon Dingemans said that GSK's vaccine "momentum ... continues to give us confidence in the mid to high single digit outlook" for annual growth in the over the next several years. This year, however, the unit will likely post higher growth figure due to Shingrix's rollout.