Gsk Share Discussion Threads

[alphorn] 08/10/2020 11:05

Clever contract. Is this an isolated agreement or a template for others, eg GSK???

AstraZeneca PLC (NYSE: AZN) has pledged that it will not profit from its COVID-19 vaccine until the pandemic is over; a timeline that may be a lot shorter than most people anticipated.

AZN has the right to declare an end to the pandemic as soon as July 2021, clearing the way for it to start collecting profits.

(Source FT).

[montyhedge] 08/10/2020 09:53

No way would GSK cut the dividend, CEO would be sacked.Pay day today 19p, every 13 weeks, I like to Feb final dividend of 23p.

[spud] 08/10/2020 09:30

The dividend is one of the few positives here - Cut it and toss it into the black hole that is R&D and watch the price tank as income funds drop this quicker than Phil Tufnell on the boundary does a dolly...spud

[mo123] 08/10/2020 09:05

Would cutting the div and investing more in R&D be seen by the mkt as a positive?
It should, a few years on, have more drugs in the pipeline and thus become more of a growth Co. like AZ.

[montyhedge] 08/10/2020 07:43

Spin offs are good for companies, Woodford wanted GSK to do it for years, they wouldn't. Will be the best thing ever.ICI spun off Astra.

[essentialinvestor] 07/10/2020 23:04

The GSK yield is only there until demerger,
it is also a factor in their £25 Billion net debt.

We are on the cusp of negative rates in the UK.
A 3% sustainable yield looks generous in that context.

Hopefully the spin of creates value, they often do.

[spud] 07/10/2020 22:14

Now that would be hindsight!

I would suggest that currently AZN is fully valued and has a yield circa 40% below GSK.

Providing management doesn’t choke, we have a good opportunity to at least double from here and collect a superior dividend over the next 5 years to boot imo.

spud

[tim 3] 07/10/2020 21:57

AZN has doubled in 3 years where as GSK has barely moved you have to ask questions about the management here and indeed my poor judgement buying these over AZN!

[essentialinvestor] 07/10/2020 20:00

rik, would agree.

Novartis transaction also expanded GSK's consumer product business through
a JV, GSK ultimately buying Novartis out - so vaccines and an
increased consumer product footprint.

On selling their oncology assets the rational given was these
were older technologies and GSK could rebuild their pipeline through oncology
R&D - that may be proving more challenging and expensive than envisaged by Andwew when CEO. The transaction was also supposed to reduce operational risk by creating a broader based, more diversified group.

It's fair to say that without the incredible success of ViiV, things might look very bleak by now.

If the wider pharma side performed in line with the ViiV JV, GSK holders would be rich. And there in lies another challenge- we are arguably near peak ViiV profitability. The pipeline needs to deliver.

[rikky72] 07/10/2020 19:38

As a bit of background. GSK hived off its fledgling onco business to Novartis in 2015 as the then CEO believed this was a sacrifice worth making for Novartis' vaccine business and a joint share in consumer. Fair to say oncology has exploded since then so having to build up this again from nothing hasn't helped them. Hal B is ex-Genentech who were at the forefront of many cancer immunotherapies and is trying to get GSK on the same level. If he achieves this great, if not then the pharma business could be in for a rough ride

[ianood] 07/10/2020 18:28

Surely the sum of the parts at "spin off" will equal the whole. How you choose to invest afterwards is entirely optional and driven entirely by your investment appetite / age?

[porsche1945] 07/10/2020 15:50

@jade

i do have an interest in gsk, much larger than yours i would imagine, i have shorts open with IG and Plus. 1945 is the door code to my holiday aptm in Portugal, axxhole.

[essentialinvestor] 07/10/2020 15:41

So atm you have a company in trasition preparing for a large spin off.

Heavy investment in to immunology and as that's still early stage the jury
is out.

Throw in reduced vaccine earnings, the wall off money they are throwing at COVID research
with no guarantees of a viable product, then you can see the bearish case.


Question of when that is in the price, it may be near current levels,
but has a look of sub £14.


Positive news on the COVID vaccine front would at least give sentiment a boost.
And they also have a treatment option in phase 3 on that.

And hopefully some advancements on the wider pharma and vaccine pipeline to come.

There is unlikely to be shortage of existing vaccines for a time!, with current lower uptake.
That's a medium term positive - the exception being the seasonal flu jab.

[essentialinvestor] 07/10/2020 15:34

There may also be some positioning before 31/12.

If we manage to secure any type of deal then GBP takes a leap v USD.

With heavy $ earnings that's a hit to the P&L.

[tim 3] 07/10/2020 15:31

Geez that charts not looking good!

[essentialinvestor] 07/10/2020 15:27

Might be best to close your eyes then.

[tradermichael] 07/10/2020 13:42

I'm not looking at sub-1400!

I'm looking for 1950 to 2250....... ;0)

[tradermichael] 07/10/2020 13:40

The % dividend simply appears high because the share price is low. p/e is significantly below the sector average. Therefore, if the share price was higher, (to match the p/e for the sector) then the dividend would fall as a number.

[spoole5] 07/10/2020 13:03

Look at pzc, cut the dividend to invest in the business, share price went up

[essentialinvestor] 07/10/2020 12:26

Debt point is valid.

As the dividend will be completely rebased come the split,
it should be less of an issue.

Would also expect circa £5/6 Billion in net debt to be hived off
to the consumer products division spin off.

New dividend policy for the remaining pharma group will target around 3% - best guess.

The days of 5% plus yields are largely coming to a close, tobacco will be the next sector to cut.

[geckotheglorious] 07/10/2020 11:37

Jade,

Certainly isnt his IQ :)

[jadeticl3] 07/10/2020 11:34

Why is somebody with no interest in GSK issuing so many posts? PS. Is 1945 indicative of your date of birth?

[porsche1945] 07/10/2020 10:55

2 amaretto

Just stagger your buys going in

Why buy in??

Stick to growth companies. Unless gsk cuts it’s monster debts it will never make headway. Drug pipeline not that great either. Current management is poor, needs a change and fast and to re base the dividend.

[essentialinvestor] 07/10/2020 09:46

Michael * vaccine division impacted by Covid-19 restrictions,
and consumer products to a lesser extent.

GSK was never going to trade in line with wider pharma as a result.

[tradermichael] 07/10/2020 09:39

“Billionaires did extremely well during the Covid crisis — not only [did] they ride the storm to the downside, but also gained up on the upside as stock markets rebounded,” said Josef Stadler, the head of UBS’s global family office department.

The biggest gains during the pandemic were made by billionaire entrepreneurs in the technology, healthcare and industrial sectors, which all saw a surge in demand during the crisis.

UBS said the pandemic had accelerated a growing divide between those billionaires and other business people focused on less dynamic sectors such as property, entertainment and financial services. 

GSK holders didn't do nearly so well ..... ;0)