GSK Q3 Profit Falls 19% to £1.9bn as Vaccine Revenue Slips

GSK reported a 19% decline in pre-tax profit to £1.9bn for the third quarter, ending in September. The British pharmaceutical firm’s shares fell 3.8% on Wednesday, making it the second-largest decliner on the FTSE 100 index. The stock dropped as much as 7% during trading before recovering some value.

The profit drop coincided with a 2% decrease in vaccine sales to £2.6bn. Arexvy, the company’s respiratory syncytial virus vaccine, saw revenue fall by 24%. Shingrix, the shingles vaccine, recorded a 5% decline. These figures disappointed investors despite the company’s overall revenue rising 5% to £8.9bn.

Core operating profit increased by 5%, while core earnings per share grew by 1%. Both metrics exceeded analyst expectations. The company booked £318m in restructuring charges, with additional costs anticipated in the coming periods.

Revenue from GSK’s HIV, cancer, and lupus treatments supported the top-line growth. In contrast, sales of Exdensur, a new asthma medication, underperformed forecasts. Meningitis vaccine sales rose by 12%, providing a partial offset to the weakness in other immunization products.

Chief Executive Luke Miels defended the position of Arexvy. He stated that the company maintains market share leadership compared to Pfizer. Miels noted strong order flow outside the United States and suggested the full impact would become clearer over the next few months.

Miels, who assumed the CEO role from Emma Walmsley in January, has pursued several strategic moves. These include a £7.9bn acquisition of a US cancer specialist and a cost-saving program launched in July. The program aims to accelerate drug development by simplifying operations.

The restructuring plan will cost £2.4bn, with most expenses falling in this year and the next. The company targets annual savings of £1.9bn within three years. Miels indicated that the company is slightly ahead of schedule on this goal.

Headquarters roles in London, Poland, and India will be affected by the restructuring. Support functions such as human resources and procurement are included in the changes. Miels stated he wants more personnel focused on laboratory research rather than administrative roles.

GSK is also reorganizing its vaccine operations in Belgium. The shift toward digital tools and automation will result in approximately 1,200 job losses. Belgium will continue to manufacture the majority of the company’s vaccines. The firm employed nearly 67,000 people worldwide at the end of last year.

Investors are watching the upcoming loss of patent protection for dolutegravir, a blockbuster HIV drug, toward the end of the decade. This change will allow competitors to sell generic versions. GSK has set a target for annual revenue exceeding £40bn by 2031 as it expands its cancer portfolio.

The company maintained its annual financial forecasts. Research and development spending is expected to outpace sales growth. GSK plans to initiate 22 late-stage studies of new medicines by year-end.

Two large clinical studies are examining whether Shingrix reduces the risk of dementia and major cardiovascular events. Initial data from these trials is due in 2027 and 2029. Miels described the potential outcomes as transformative. UK chemists have reported increased demand for the shingles vaccine following studies linking it to lower dementia risk. Miels said the company is working to prove causation beyond the observed correlations.