GlaxoSmithKline Expects Long-Term Sales, Profit Growth, Driven by Vaccines and Specialty Medicines -- Update
--GlaxoSmithKline expects sales, profit growth in the next five
years, driven by new vaccines and specialty medicines
--The company expects its late-stage pipeline to underpin sales
in the longer term, until 2031
--R&D and commercial investment in vaccines and specialty
medicines will be priorities when the company spins off its
consumer healthcare business in 2022
By Cecilia Butini
GlaxoSmithKline PLC said Wednesday that it expects growth in
sales and adjusted operating profit over the next five years to be
underpinned by new vaccines and specialty medicines, as it set
targets for the medium and long term following the planned 2022
demerger of its consumer healthcare business.
The British pharmaceutical major said it expects to deliver
sales growth of more than 5% and adjusted operating profit of more
than 10% for 2021 to 2026, adding that these targets exclude
contributions from coronavirus-related revenue.
Adjusted operating margin is seen improving from the mid-20s% in
2021 to more than 30% by 2026, GSK said.
In the longer term, up to 2031, the company said it aims to
deliver sales of more than 33 billion pounds ($46.04 billion) at
constant exchange rates, which will be achieved by the commercial
execution of the company's late-stage pipeline.
GlaxoSmithKline said that, in formulating the outlooks until
2026 and then up to 2031, it took into account challenges in the
healthcare industry, which are expected to drag on in the coming
years, with continued covid-related uncertainty. Nonetheless, the
company said it expects volume demand for its products to increase,
particularly for its shingles vaccine Shingrix in the U.S., as
healthcare systems return to normal post-pandemic.
After the planned spinoff of its consumer-healthcare business,
the company--which management refers to as New GSK-- will
prioritize research and development and commercial investment in
vaccines and specialty medicines, GSK said. These areas are
expected to grow to around three-quarters of company sales by 2026,
it said. In terms of therapeutic areas, the company said it will
remain focused on infectious diseases, HIV, oncology and
The separation of the consumer-healthcare business, which is
still subject to shareholder approval, is set to take place by way
of a demerger of at least 80% of the company's 68% holding in the
unit to GSK shareholders. New GSK will retain up to 20% of the
former company's holding in the new consumer healthcare company, it
said. Following the separation, the two entities will have two
independent boards, GlaxoSmithKline said, adding that a process has
begun to form a board of directors for New GSK.
Write to Cecilia Butini at firstname.lastname@example.org
(END) Dow Jones Newswires
June 23, 2021 08:17 ET (12:17 GMT)
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