GSK pledges to step up growth as it prepares for consumer unit spin-off

Emma Walmsley, GlaxoSmithKline’s chief executive who has been under pressure from activist investors, has promised a “step change in growth” at the UK drugmaker this year after its quarterly profits beat expectations.

The pledge comes as the FTSE 100 company prepares to spin off its consumer health unit after rejecting Unilever’s £50bn offer late last year for the maker of over-the-counter medicines and vitamins.

GSK predicts sales for the new pharma business will climb between 5 and 7 per cent this year, while adjusted operating profits will grow between 12 and 14 per cent. The new slimmed-down pharma and vaccines business expects milestone data on up to seven late-stage drug candidates.

After taking stakes in GSK, activist investors Elliott Management and Bluebell Capital Partners have pushed the group to revitalise its drug pipeline and pressed it to consider a sale of the consumer health unit, rather than a spin-off.

But Unilever dropped plans to buy the business after its bids were rejected by GSK and Pfizer, which owns a stake in the consumer health unit.

In its fourth-quarter results on Wednesday, GSK reported earnings of 25.6p per share, better than the average analyst estimate of 23.8p. It will pay a dividend of 23p per share for the quarter.

The group’s sales were in line with the consensus forecast, at £9.5bn. Its Covid-19 antibody treatment, developed with Vir Biotechnology, had sales of £958mn in the quarter. Governments signed large contracts during the most recent Covid wave as, unlike some rivals, the drug can tackle the Omicron coronavirus variant.

However, sales of its vaccines fell 7 per cent as the need for Covid jabs continued to reduce demand for other shots, including Shingrix, which prevents shingles. The decline was partly offset by sales of the pandemic adjuvant, which boosts the efficacy of several vaccines in development, including one with Sanofi. Sales for the product came in at £447mn for the full year.

For the full year, GSK reported sales of £34bn, up 5 per cent from a year earlier. Its adjusted earnings per share were up 9 per cent at 113.2p.

Shares in GSK, which have risen 29 per cent in the past year, were flat at 1,648.45p in early morning trading on Wednesday in London.