LONDON, Nov 2 — GSK beat third-quarter earnings forecasts today and raised its 2022 estimate for the second time in four months, continuing its strong start as a standalone prescription medicine business since spinning off its consumer health brands.

After years of underperformance relative to its peers and missing on the lucrative market for the first set of Covid-19 vaccines, GSK has delivered a string of strong results, with the latest led by its blockbuster shingles vaccine Shingrix.

Shingrix generated sales of £760 million (RM4 billion) compared with the GSK-compiled analyst consensus forecast for £685 million.

Although demand for the vaccine suffered as adult immunisations took a hit during the first pandemic years, sales have rebounded as Covid pressures have eased.

The British drugmaker now expects 2022 sales to rise between 8 per cent and 10 per cent and adjusted operating profit to increase by 15 per cent to 17 per cent, excluding any contributions from its Covid-19 solutions business. It is the second hike to the company’s initial full-year forecasts issued in February.

GSK’s robust results, coupled with positive pipeline developments, provide some encouragement on the underlying business performance, Citi analysts wrote in a note.

On Wednesday, GSK said it had secured priority regulatory review in the United States for its RSV vaccine, with a decision expected by early May.

GSK is among a handful of drugmakers racing to develop a vaccine for the respiratory virus, which causes thousands of hospitalisations and deaths each year.

If approved, the shots are expected to generate billions in sales for their makers, given the complex molecular structure of the virus and safety concerns have stymied protracted efforts to develop a vaccine.

GSK shares hit a 2-1/2 month high of 1,470.2 pence in early trade and were last up 1 per cent at 1,461.3 pence.

Zantac

Having survived a revolt by activist investors Elliott and Bluebell last year, GSK’s prospects since splitting off its consumer arm earlier this year have been boosted by clinical trial success and acquisitions, though concerns around US litigation over heartburn drug Zantac have spooked investors.

GSK said it had incurred a charge of £45 million in the third quarter, primarily reflecting provisions for increased legal fees related Zantac. Thousands of cases have been filed in the United States against a variety of drugmakers over allegations the compound contains a probable carcinogen.

Originally marketed by a forerunner of GSK, Zantac has been sold by companies including Pfizer, Boehringer Ingelheim and Sanofi, as well as many generic drugmakers.

Shareholders fear a worst-case scenario where costs run into billions of dollars, as happened in cases involving Merck & Co’s painkiller Vioxx and Bayer’s glyphosate-based weedkiller.

GSK reported a third-quarter adjusted profit of 46.9 pence per share on sales of about £7.83 billion, topping analysts’ forecasts for 40.1 pence and £7.32 billion. — Reuters