GlaxoSmithKline's third-quarter earnings were lifted by demand for its new shingles vaccine on Wednesday, but the British drugs firm's shares slipped despite an improved outlook as analysts focussed on some drugs missing forecasts.
GSK beat market a company-compiled analyst forecast with a 14% rise in adjusted earnings per share to 35.5 pence, on sales of £8.09 billion ($10 billion), which were up 6% on a constant exchange rate basis.
Although GSK's shares initially rose on the results, they were down 2% to 1,522 pence by 1500 GMT.
Analysts at Liberum, who have a "hold" rating on the stock, said a 1% beat on the top line translated to about 6.5 % on the bottom, driven by lower tax, higher royalties, and underlying margin improvement.
But they said the mix was less encouraging, with the newer respiratory products mostly missing forecasts, although on the positive side HIV performed broadly in line with expectations, despite new competition.
Chief Executive Emma Walmsley, who is trying to reinvigorate GSK's pharmaceutical business, its largest division which has lagged rivals in producing new blockbuster drugs, said stronger commercial execution, new launches, notably shingles vaccine Shingrix, and better cost control was driving GSK's growth.
"The performance of our new launches is encouraging and this is where we continue to focus our resources," she said.
"Shingrix continues to have a remarkable start and we have now administered nearly 7 million doses worldwide since launch."
GSK now expects Shingrix sales of £700-£750 million this year, up £100 million from the target given in July.
Led by new R&D chief Hal Barron, GSK is investing where it see results and ending research when data disappoints.
"We are focusing our pipeline better behind priority assets and intervening earlier, including on interim data to stop things that we don't believe have the bigger chances of success," Walmsley said.
It halted the development of three products in its pipeline for respiratory, an area in which it leads the market, in the quarter after analysing data.
But Walmsley said GSK had launched six new medicines in recent years to help to replace its blockbuster Advair, which awaits the arrival of generic competition, and it still had assets in the respiratory pipeline.
And she said she was very pleased to see progress in oncology and immuno-inflammation programmes, including new drug candidates for multiple myeloma and rheumatoid arthritis.
The company narrowed its forecast for full-year adjusted earnings growth to 8-10% from 7-10% previously, whether or not a generic competitor to its respiratory blockbuster Advair is launched in the United States this year.
GSK declared a 19 pence dividend for the quarter and said it continued to expect 80 pence for the full year.