Shares dive up to 7% as weaker vaccine sales unnerve investors at GSK

Shares fall despite stronger results

GSK shares fell on Wednesday even as the British drugmaker reported better-than-expected financial results. Investors were concerned about weaker sales of its respiratory syncytial virus (RSV) and shingles vaccines, along with recently launched medicines.

The shares fell as much as 7% before narrowing the loss to 3.8%. GSK was the second-biggest faller on the FTSE 100, the index of blue-chip businesses.

Quarterly turnover climbs

GSK reported third-quarter turnover of £8.9bn, up 5% from the same period a year earlier. Strong sales of its HIV, cancer and lupus medicines supported the increase.

Vaccine outlook remains in focus

GSK chief executive Miels said the company continued to lead Pfizer in market share for Arexvy, its RSV vaccine, and was receiving good orders outside the US. He said the full picture would become clearer over the coming months.

Miels described Shingrix as “a remarkable product” with “potential to grow next year.” He cited studies examining possible links between the shingles vaccine and reduced dementia risk, as well as effects on major cardiovascular events; data is expected in 2029 and 2027, respectively. UK high street chemists have reported increased demand for the shingles vaccine after studies found a correlation with lower dementia risk. Miels said, “We’re trying to demonstrate causation,” noting that existing studies show correlation.

Cost plan and Belgium changes

Miels said GSK was slightly ahead of its three-year plan to save £1.9bn a year. The plan involves simplifying operations to direct more investment towards research and development, while the restructuring is expected to cost £2.4bn, mostly this year and next.

GSK is reorganising its vaccine business in Belgium, where greater use of digital tools and automation is expected to result in about 1,200 job losses. The country will continue producing most of GSK’s vaccines. The company had nearly 67,000 employees worldwide at the end of last year, according to its annual report.