GSK’s top exec sees ‘good progress’ but drug giant forecasts decline in earnings

RESEARCH TRIANGLE PARK – Drug giant GlaxoSmithKline is “making good progress” as it revamps under CEO Emma Walmsley but earnings will likely take a hit this year due to increased competition for its asthma big seller Advair.

So said Walmsley and the company in its quarterly and 2018 annual financial update early Wednesday in London.

“We are making good progress against our priority to rebuild our pharmaceuticals pipeline, particularly in oncology,” said Walmsley a day after GSK announced a multi-billion-dollar deal with Merck KGaA in Germany to co-develop immunotherapy targeting multiple cancers.

GSK breaks down earnings.

But the good news was offset by a GSK warning on earnings.

“Expect Adjusted EPS to decline -5% to -9% CER [constant exchange rates] reflecting recent approval of a generic competitor to Advair in the US. Guidance also reflects expected impact of Tesaro acquisition and assumes Consumer Healthcare nutrition disposal and Consumer JV with Pfizer close as previously indicated,” the company said.

Walmsley’s strategy for GSK is to split the company with consumer products targeted to combine in a joint venture with Pfizer. She also is selling off some nutrition products.

Overall, Walmsley, who is nearing her second anniversary as CEO of the company in April, was very positive in her remarks.

GSK strikes potential $4B deal for immunotherapy targeting cancer

“Since July, we have doubled the number of oncology assets in clinical development to 16 through the advancement of our internal programmes and with targeted business development including the recently completed acquisition of Tesaro and our new alliance with Merck KGaA that is expected to close in Q1 2019,” she added.

The Tesaro deal, also a multi-billion-dollar transaction, recently closed. It too targets cancer as well as genetics.

Looking ahead, Walmsely noted: “During 2019, we expect to receive pivotal data on three new cancer medicines, all of which have the potential to be launched in the next two years.”

Walmsley touted as well “improved operating performance in 2018 with Group sales growth, strong commercial execution of new product launches, especially Shingrix [shingles vaccine], continued cost discipline and better cash generation.”

GSK acquiring oncology firm Tesaro in $5.1B deal, sells health drinks for $3.7B

“It was also a significant year for the Group strategically, with the launch of a new R&D strategy focused on immunology, genetics and new technologies, together with a series of transactions that support our strategy and reshape of the Group’s portfolio.”

GSK did top analysts’ forecasts for revenue and earnings in the fourth quarter, according to Reuters, with revenue hitting some $10.66 billion and earnings coming in at 41 cents.

Read the full earnings report online.

GSK maintains an R&D in RTP and has a manufacturing plant in Zebulon.