GSK lifts long-term sales outlook on strong Specialty Medicines growth

Investing.com -- GSK (LON:GSK) on Wednesday raised its long-term sales outlook, now expecting annual revenue to exceed £40 billion by 2031, an upward revision from the previous projection of £38 billion. 

This increase reflects the company’s confidence in its expanding portfolio of specialty medicines, a strong late-stage pipeline, and anticipated success of new product launches over the coming years.

The pharmaceutical company reported a solid financial performance for 2024, with total sales reaching £31.4 billion, representing a 7% increase at constant exchange rates. 

Growth was largely driven by a surge in specialty medicines, which saw a 19% rise in sales. Oncology treatments nearly doubled in revenue, while HIV and respiratory medicines also delivered double-digit gains. 

However, the vaccines segment struggled, posting a 4% decline, with Arexvy, its respiratory syncytial virus vaccine, falling 51% in sales. 

General medicines saw moderate growth of 6%, with Trelegy, a key respiratory drug, posting a strong 27% increase.

Despite strong revenue expansion, total operating profit fell by 33%, largely due to a £1.8 billion charge related to Zantac litigation settlements. 

However, the company’s core operations remained strong, with core operating profit growing by 11%. 

The earnings per share figures reflected this divide, with total EPS declining by 40% to 63.2p, while core EPS increased by 10% to 159.3p. 

The company’s cash flow position remained solid, generating £8 billion from operations and ending the year with a reduced net debt of £13.1 billion, down from £15 billion.

GSK’s global performance showed strength across key markets. Sales in the United States reached £16.4 billion, up 6% at constant exchange rates, while Europe posted £6.7 billion in revenue, a 4% increase. 

International markets led regional growth, climbing 11% to £8.3 billion. The company’s expansion in specialty medicines has been instrumental in this upward trajectory, with strong demand for its HIV treatments, respiratory therapies, and growing oncology presence.

The company’s research and development efforts continue to shape its future outlook. Currently, 71 specialty medicines and vaccines are in clinical development, with 19 in late-stage trials or under regulatory review. 

Five major product approvals are expected in 2025, including Blenrep for multiple myeloma and depemokimab for severe asthma. Key late-stage trials in oncology, respiratory diseases, and HIV are also expected to be catalysts for long-term growth.

“In particular, we are increasing and prioritising R&D investment to promising new long-acting and specialty medicines in Respiratory, Immunology & Inflammation, Oncology and HIV. Our outperformance and stronger balance sheet support these investments and others planned in R&D,” said Emma Walmsley, chief executive at GSK in a statement.

By 2025, GSK expects turnover to grow between 3% and 5%. Core operating profit and core earnings per share are expected to grow between 6% and 8%. 

A £2 billion share buyback program is set to be implemented over the next 18 months by the firm, a move that signals confidence in its long-term strategy. 

Dividends are expected to increase to 64p per share in 2025, which is an increase from 61p per share in 2024.