Drugmaker GlaxoSmithKline prepares for life after Covid with new drugs in pipeline

3 February 2021

DRUGS giant GlaxoSmithKline today revealed it has 20 pipeline drugs in late-stage clinical trials as it prepares for life beyond the pandemic.

Total sales rose 1% across 2020 to £34.1 billion, with pre-tax profits up 12% to £6.97 billion, but the resurgence of Covid-19 hit revenue in the final quarter which slipped 2% to £8.74 billion.

The fall was blamed on disruption in day-to-day healthcare which has seen fewer patients visiting doctors.

While Covid-19 saw increased demand for its over-the-counter painkillers, recovery in its non-coronavirus vaccines arm is now not expected before the second half of the year.

This is expected to continue to impact adult and adolescent immunisations, including flagship shingles drug Shingrix.

GSK has also continued to invest in a major restructure which will see its vaccine research and over-the-counter consumer medicines operations split into two separate companies next year.

The mixed-bag of announcements sent its share price down by almost 5% to 1300p this afternoon.

CEO Emma Walmsley said: “2020 was an extraordinary year for all of us, and one of significant progress for GSK. We invested in our pipeline and new launches, readied the company for separation, and had to rapidly mobilise and respond to the pandemic.”

It announced a 23p dividend, taking the full year total to 80p. The group plans to pay the same amount in 2021.

The results came hours after the group announced a 150million Euro tie-up with German biopharma firm CurevVac to both distribute 100 million shots of CureVac’s existing Covid-19 shot and to assist in research for a next-generation one-shot vaccine against emerging strains of the virus.

US-listed shares of CureVac were up 5.26% premarket to $103.89 on the announcement.

The company’s existing partnership with French firm Sanofi continues, but rollout has been delayed until the end of the year after trials showed an “insufficient” response in the over-50s.

It has at least 20 new product launches planned by 2026, of which it expects at least half to produce potential peak annual revenues in excess of $1 billion.

These include the myeloma therapy Blenrep; the RSV vaccine candidate for lower-respiratory tract illnesses; monoclonal antibody otilimab, and long-acting asthma therapeutic anti IL-5.

Nicholas Hyett, analyst at Hargreaves Lansdown, said: “GSK is a company in transition – and by 2022 will be starting life as two separate companies. While we haven’t always supported breaking the business up, we now think the move can’t come soon enough.

“GSK in its current iteration seems to be struggling to set out a clear vision of what it offers investors. Hopefully its successor companies are a little more streamlined.”

Julie Palmer, partner at Begbies Traynor, said: “Although the pharmaceutical giant has been late to the party with its Covid-19 vaccine, research trials are focusing on greater efficacy, while the company has the logistical capacity to manufacture and distribute products globally once the drug is approved.

“For long term protection, it will be companies such as GSK that have the most reliable trials and can mass produce cost-effectively that governments turn to. If the business can get its strategy right, it will be just what the doctor ordered for its investors.”

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