GlaxoSmithKline (GSK) has revealed its first-quarter sales beat expectations and rose 32% to £9.8 billion ignoring the impact of exchange rates.
The results reflected a 40% increase in commercial operations, led by Xevudy sales, and a 14% rise in consumer healthcare sales.
Lastly, GSK’s underlying profit rose 39% to £2.6 billion, also ahead of expectations.
Looking to the future, The group expects full-year underlying revenue growth between 5% and 7% and underlying operating profit growth of 12-14%, in line with previous guidance.
This excludes contributions from Covid 19 solutions, which are expected to reduce operating profit growth by between 5% and 7% as lower margin Xevudy sales make up a greater proportion of sales.
“The end of the pandemic’s been a good thing for GSK as the group’s seen some of the underloved parts of its portfolio start to recover,” Hargreaves Lansdown equity analyst Laura Hoy said.
“Sales of its shingles vaccine are picking up and the market for antibiotics is starting to recover now that we’re all out and about.”
Hoy added: “Xevudy, GSK’s Covid monoclonal antibody treatment contributed to the group’s impressive earnings beat, but its lower-margin sales mean it will hold New GSK profits back by 5-7% in the year ahead.
“Plus, the drug’s been stricken from the approved treatments list in the US, which is sure to be a roadblock moving forward.”
“That doesn’t derail the case for New GSK, though, given that Xevudy is only part of the group’s portfolio. As we continue to exit the pandemic it’s likely to become a smaller focus in the longer term.”