GSK raises profit forecasts in boost for under-fire Walmsley

GlaxoSmithKline has raised its full-year profit forecast after beating expectations in the third quarter, a fillip for chief executive Emma Walmsley as she battles a growing number of activist investors.

The UK drugmaker now expects adjusted earnings per share to decline between 2 and 4 percentage points, better than its previous prediction of a mid-to-high single-digit drop.

The brighter outlook comes as the group reported a rebound in demand for its shingles vaccine. Sales of Shingrix soared 41 per cent to £502m, as people returned to routine immunisations following a pause around the Covid-19 vaccination programmes.

Walmsley said Shingrix was “firmly on the recovery track” and the company was confident it could double revenues from the jab in the next five years.

For the third quarter, GSK reported overall sales of £9.1bn, up 10 per cent from the year-ago period, and higher than analysts’ forecast of £8.7bn. Its adjusted earnings per share were 36.6p, up 10 per cent on a constant currency basis, and surpassing the consensus forecast of 29.4p. 

Shares in GSK were up 0.9 per cent to 1,445p in early afternoon trading in London.

The results come as Walmsley faces pressure from US hedge fund Elliott Management, which took a multibillion-pound stake earlier this year, and Bluebell Capital Partners, a smaller activist shareholder that revealed its stake last month.

Both have called on the board to reconsider if Walmsley is the best person to lead the pharma company after GSK spins off its consumer health division next year. They have also raised questions about her lack of scientific background, given that the group’s challenge is to revitalise its pipeline of drugs.

Walmsley on Wednesday said the performance in the third quarter “reinforces our confidence in the outlook for a step-change in growth and performance” in 2022.

Earlier this month, Bluebell also called for GSK’s chair Jonathan Symonds to step down, saying it was disappointed by his contributions to an investor meeting,

Walmsley said the board had made its position on the chair “pretty clear”. “What we’re focused on is engaging in constructive dialogue with all of our shareholders and absolutely, whether it’s the board or the executive team, unlocking shareholder value and making progress,” she said on Wednesday.

She refused to comment on whether GSK had received expressions of interest from potential buyers for its consumer health division. Bloomberg previously reported that private equity buyers could be considering a bid

Earlier on Wednesday, GSK announced the appointment of genetics expert Harry C Dietz as non-executive director, as it seeks to address concerns that it does not have enough scientific expertise on its board. In July, Elliott wrote to the company recommending it refresh the board.

Dietz, a professor of genetic medicine at Johns Hopkins University, will join the board and its scientific committee in January, helping steer its strategy that includes using genetics to develop drugs, including in partnerships with direct-to-consumer healthcare company 23andMe and Nobel Prize winner Jennifer Doudna.