GSK warns COVID-19 will dent full-year earnings

Britain's GSK cautioned full-year earnings would likely come in at the lower end of its forecast range after the COVID-19 pandemic took a toll on its vaccines unit, with people in the United States shunning visits to their physician for their shots.

GSK shares were down 1% at 1,347.2 pence after the drugmaker's shingles vaccine Shingrix, the biggest driver of sales growth last year, saw quarterly revenue fall 30% from a year earlier to 374 million pounds ($487 million), some 18.5% below market expectations.

While the pandemic has hit its businesses during the first nine months of 2020, GSK said on Wednesday it had lately seen a recovery in vaccination rates, with adult immunisations in the United States returning to prior-year levels towards the end of the quarter.

"What we saw through the quarter ... were definitely lower vaccination rates in July and August," GSK CEO Emma Walmsley said on a media call. "In September and indeed through the early weeks of October, however, we are back at pre-pandemic levels."

For the drug industry as a whole the effects of COVID-19 on vaccination behaviour has been at times erratic and difficult to forecast. Pfizer for instance said on Tuesday that while many people missed shots of its best-selling Prevnar 13 vaccine (against pneumonia-causing bacteria) during the second quarter, there had been a catch-up trend during the third quarter.

Merck & Co, for its part, said demand for its pneumonia vaccine Pneumovax 23 had increased during the COVID-19 pandemic.

GSK is one of many drugmakers involved in a race to develop a vaccine for COVID-19 but lags behind frontrunners like AstraZeneca and Pfizer.

GSK is collaborating with Sanofi to develop a vaccine, with late-stage trials expected to start in December.

The two companies have struck a deal to will supply 200 million doses of their COVID-19 candidate vaccine to a global inoculation scheme backed by the World Health Organization.

For the quarter, GSK reported adjusted earnings of 35.6 pence per share and sales of 8.67 billion pounds.

Analysts on average had expected adjusted earnings of 30.4 pence per share and sales of 8.77 billion pounds, according to a company-compiled consensus of 16 analysts.

GSK said it expects 2020 profit to be at the lower end of its previous forecast of a drop of between 1% and 4%, which did not include any potential impact from the coronavirus crisis.