GSK plc (NYSE: GSK) inches up in pre trading session on Wednesday as GSK began 2023 with a quarterly performance that above analyst forecasts, continuing a string of solid results driven by robust sales of its vaccines, HIV and respiratory treatments.
It confirmed its 2023 projection, stating that it expects adjusted operating profit growth to be greater in the second half of the year but lower in the first half, when projected medication launches will boost expenses.
The British pharmaceutical established its consumer health business Haleon last year and has begun to reverse years of underperformance relative to rivals and from basically losing out on the market for COVID-19 vaccines in recent quarters.
Even after excluding one-time items, the underlying sales and profits beat remain a reasonable 3% and 4%, respectively, according to Citi analyst Andrew Baum in a note.
He said that there was minimal meaningful risk to GSK’s near-term profitability, while investors are concerned about a Zantac study in California, which claimants allege is connected to cancer.
Some of those concerns were allayed in December when a federal judge in the United States rejected around 50,000 claims. This has no bearing on the tens of thousands of identical lawsuits pending in state courts, and the July trial will be the first test of how Zantac cancer allegations fair in front of a jury.
Investors are particularly concerned about GSK’s long-term prospects, owing to the upcoming loss of patent protection for one of the company’s HIV drugs and setbacks in its commercial oncology portfolio.
As a result, the business has announced a number of buyout agreements, including those with Bellus Health, Affinivax, and Sierra Oncology. GSK is also banking on its potentially blockbuster RSV vaccine, which causes thousands of hospitalizations and deaths each year.
It expects to deploy the vaccine in the United States and Europe later this year, pending regulatory approval, as does competitor Pfizer.
