GSK GSK plc

By Denise Roland 

LONDON -- GlaxoSmithKline PLC reported a rise in third-quarter earnings and said full-year profit would come in at the top end of expectations, mainly thanks to strong demand for its new shingles vaccine.

Demand for Shingrix, which is aimed at people age 50 and over, has outpaced Glaxo's expectations since it launched the vaccine late last year. The company says it now expects sales of GBP700 million to GBP750 million ($893 million to $957 million) this year, up from previous guidance of GBP600 million to GBP650 million. The vaccine protects against shingles, a disease that leads to a painful rash and that is caused by the reactivation of the chicken pox virus in people whose immune systems have weakened with age.

Shingrix got a boost when the U.S. Centers for Disease Control and Prevention last year gave the vaccine favored status over a rival, Merck & Co's Zostavax. The CDC also recommended that adults who had previously received Zostavax should still receive Shingrix.

That has led to some supply shortages. The British pharmaceutical giant said it had implemented an "allocation process" to make sure customers can complete the two-dose course. "We are working extremely hard to improve our capacity for supply," Chief Executive Emma Walmsley said.

Shingrix's strong performance helped push Glaxo's third-quarter revenue to GBP8.1 billion, up 3% from the same period last year. Glaxo's HIV franchise and new respiratory drugs also contributed to the higher sales.

Adjusted operating profit, a measure that strips out one-time items and is closely watched by analysts, rose 2% to GBP2.5 billion. Taking currency fluctuations into account, revenue and adjusted operating profit both rose 6%. Net profit for the three months ended Sept. 30 was GBP1.42 billion, compared with GBP1.21 billion in the same period last year.

Glaxo said it now expects full-year adjusted earnings a share to grow 8% to 10%, taking currency fluctuations into account, having previously guided to a 7%-to-10% rise.

Glaxo said it expected to hit that guidance regardless of whether a generic version of its top-selling inhaler Advair hits the market before the end of the year. Global generic pharmaceutical company Mylan has said it believes an approval from the U.S. Food and Drug Administration for its cut-price version of the blockbuster product is "imminent."

Glaxo also said it would pay a dividend of 19 pence a share for the quarter and that it still expects the full-year dividend to be 80 pence a share.

The company added that it has continued cutting early-stage research projects that failed to show enough promise to pour more money into drug candidates with more potential, as part of Ms. Walmsley's broader push to revive the company's research pipeline. "We wanted to be more proactive about intervening earlier to stop things...so that we can really focus our resources on the big bets that are going to have meaningful impact on patients," Ms. Walmsley said.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

October 31, 2018 11:28 ET (15:28 GMT)

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