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 immunology/respiratory.

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 [e-mail]

(END) Dow Jones Newswires

June 23, 2021 08:17 ET (12:17 GMT)

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