(Alliance News) - GSK PLC on Wednesday raised its long-term sales guidance and announced a GBP2 billion share buyback, reflecting optimism about its late-stage drug pipeline.
The London-based pharmaceutical maker now expects revenue to top GBP40 billion by 2031, the outlook raised from GBP38 billion.
Alongside the share buyback, GSK reported growth in annual revenue, but a decline in profit, with its bottom line hurt by a Zantac litigation settlement charge.
In response, shares in GSK were up 5.9% to 1,461.42 pence in London on Wednesday morning. By contrast, the wider FTSE 100 index was marginally lower.
GSK said pretax profit in 2024 fell 43% to GBP3.48 billion from GBP6.06 billion a year prior, though revenue increased 3.5% to GBP31.38 billion from GBP30.33 billion, ahead of the GBP31.05 billion company compiled consensus.
GSK said its profit decline was "largely driven by" a GBP1.8 billion charge relating to the settlement of Zantac litigation.
GSK also noted higher contingent consideration liabilities charges, amid "improved longer term HIV prospects" and some unfavourable foreign currency moves hurt profit.
Core pretax profit rose 6% to GBP8.61 billion, rising 13% at constant currency, and ahead of the GBP8.47 billion company-compiled consensus.
GSK maintained its final quarter dividend at 16 pence per share. Its annual dividend of 61p is up 5.2% from 58p for 2023. For this year, it expects a total payout of 65p per share.
"GSK delivered another year of excellent performance in 2024, with strong sales and core profit growth driven by accelerating momentum of our specialty medicines portfolio. This, together with outstanding phase III pipeline progress, means we expect another year of profitable growth in 2025," Chief Executive Officer Emma Walmsley said.
In 2024, Specialty Medicines sales rose 19%. HIV sales rose 13%. Oncology sales leapt 98%. Respiratory/Immunology and Other sales increased by 13%.
Vaccines sales dropped 4%, with sales of shingles treatment Shingrix up 1% but those of respiratory syncytial virus product Arexvy down 51%. General Medicines sales climbed 6%, with sales of chronic obstructive pulmonary disease drug Trelegy up 27%.
For 2025, GSK expects top-line growth between 3% and 5% at constant currency. Revenue rose 7% at constant currency in 2024.
Core operating profit is expected to increase by between 6% to 8%, as is core earnings per share. In 2024, core operating profit rose 11% and core EPS rose 10%.
GSK expects Specialty Medicines sales to increase by a low double-digit per cent. Vaccines sales are expected to fall by a low single-digit per cent. General Medicines sales are expected to be broadly stable.
Looking further ahead, GSK now expects 2031 sales of over GBP40 billion, its outlook raised from over GBP38 billion. This reflects "late-stage pipeline progress".
GSK said the increase reflects the inclusion of cancer drug Blenrep, the significant phase III progress since last year and multiple launch opportunities in the 2025 to 2031 period.
"As before, we have further upside potential from our early-stage pipeline and prospective business development," GSK added.
CEO Walmsley added: "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, as well as the opportunity to enhance shareholder returns through our progressive dividend and the share buyback programme which we have set out today."
By Jeremy Cutler, Alliance News reporter
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