British pharmaceuticals giant GSK beat analyst expectations for its first-quarter results on Wednesday and stood by its 2022 forecasts, after buoyant sales of its COVID-19 treatment which has now been withdrawn from the US market.
The earnings beat, with lifted GSK's shares more than 1% in early trade, comes ahead of the July listing of its consumer healthcare venture with Pfizer, christened Haleon, which has put GSK's future in focus.
Emma Walmsley, chief executive faces pressure from activist investor Elliot to shore up its pipeline.
This month, GSK agreed to buy Sierra Oncology for $1.9 billion.
Turnover in the three months to 31 March was boosted by £1.3 billion ($1.64 billion) in sales from its COVID-19 antibody treatment, Xevudy, developed with Vir Biotechnology, as well as sales of its shingles vaccine, Shingrix.
Xevudy sales beat analysts' expectations for £1.1 billion and were in line with what the treatment made in the whole of 2021, with the majority of sales expected from GSK's 'COVID-19 solutions' recorded in quarter.
Xevudy, known chemically as sotrovimab, was shown to have worked against the Omicron variant, but recent data suggested it was unlikely effective against the BA.2 subvariant dominant in the United States, the treatment's biggest buyer.
US regulators have pulled Xevudy off the market because of its lack of effectiveness against the subvariant.
"Our results reflect further good momentum across specialty medicines and vaccines," Walmsley said in a statement.
"We also continue to see very good momentum in Consumer Healthcare, demonstrating strong potential of this business ahead of its proposed demerger in July," she said.
The London-listed company, which rejected Unilever's £50 billion bid for its consumer unit in December, said the division was expected to post annual organic revenue growth of 4%-6%.
'Resurgence In Demand'
Shingrix, GSK's top selling vaccine, saw a resurgence in demand after a disruption to adult immunisations at the height of the pandemic.
It generated £698 million in sales, handsomely beating analyst estimates of £528 million.
"Key revenue driver Shingrix's performance was encouraging ... although recent data points to prescription levels still significantly below pre-pandemic volumes. Longer term, mRNA vaccines pose a threat," Sebastian Skeet, analyst, Third Bridge said.
GSK's adjusted earnings stood at 32.8 pence per share for the first quarter, while turnover rose 32% to £9.78 billion.
Analysts had expected earnings of 30 pence per share on revenues of £9.15 billion.
GSK has ploughed on with its Haleon spin off, even though many companies have delayed or abandoned listing plans amid market jitters over the Ukraine crisis.
The company, whose business in Russia and Ukraine accounts for less than 1% of sales, saw an increase in costs in the quarter, partly due to provisions it set aside for the crisis.
GSK did not give a breakdown of how much that was.