GSK Q3 Earnings Top, Stock Down on Lowered '24 View for Vaccine Sales

Core Viewpoint - GSK reported third-quarter 2024 core earnings of $1.27 per American depositary share (ADS), exceeding the Zacks Consensus Estimate of $1.16, although core earnings declined 1% year over year on a reported basis but rose 5% at a constant exchange rate (CER) [1] - Quarterly revenues fell 2% on a reported basis but rose 2% at CER to $10.42 billion (£8.01 billion), missing the Zacks Consensus Estimate of $10.65 billion due to lower sales of RSV and shingles vaccines in the United States [1] Segment Performance - GSK operates under three segments: General Medicines, Specialty Medicines, and Vaccines. Sales in Specialty Medicines and General Medicines rose 19% and 7%, respectively, while vaccine sales declined 15% [3] Specialty Medicines - HIV sales increased by 12%, driven by strong demand for two-drug regimens Dovato and Juluca, and long-acting medications Apretude and Cabenuva, which together contributed nearly 60% to total HIV sales [4] - Sales of Dovato rose 23%, while Juluca fell 1%. Sales of Triumeq declined 10%, and Tivicay rose 2%. Apretude and Cabenuva saw significant increases of 95% and 40%, respectively [5] - Sales of the respiratory drug Nucala increased by 12%, and Benlysta sales rose by 16% due to strong demand across all regions [6] Oncology - Oncology sales surged by 94%, driven by demand for Jemperli, Ojjaara, and Zejula. Jemperli contributed £130 million, while Ojjaara generated £98 million in sales [7] General Medicines - Growth in General Medicines was primarily due to strong sales of asthma inhaler Trelegy Ellipta, which surged 16%. Sales of Anoro Ellipta, Advair/Seretide, and Revlar/Breo Ellipta also improved [9] Vaccine Sales - Vaccine sales declined mainly due to a 72% drop in RSV vaccine Arexvy sales, attributed to restrictive CDC recommendations. Shingrix sales fell 7%, partially offset by rising international sales [11] - Meningitis vaccine sales increased, with Bexsero and Menveo rising by 30% and 7%, respectively, while influenza vaccine sales fell by 22% [12] Operating Expenses - Core SG&A costs decreased by 2% to £2.07 billion, attributed to disciplined investments for global market expansion. Core R&D expenses rose by 3% to £1.43 billion due to continued investment in pipeline advancement [13] 2024 Guidance - Management expects overall revenues to increase by 7-9% at CER for the full year but has revised segment-level revenue guidance. Specialty Medicines are expected to grow in the high teens percentage at CER, while General Medicines are expected to see mid-single digit growth [14][15] - Vaccine sales are now expected to decline by a low-single digit percentage at CER, a revision from previous growth expectations [16] - Core operating profit is still expected to grow between 11% and 13% at CER, with core EPS growth projected at 10-12% at CER [17]