GSK Posts 19% Profit Drop as Vaccine Sales Slip

British workers in the pharmaceutical sector face a shift in employment structure as GSK announced it will cut approximately 1,200 jobs at its vaccine facilities in Belgium. The company, the second-largest drugmaker in Britain, reported a 19% decline in pre-tax profit for the third quarter, landing at 1.9 billion pounds. This drop occurred despite core operating profit rising by 5% and core earnings per share increasing by 1%, both of which exceeded analyst expectations.

The financial pressure stems primarily from softer sales in the vaccine division. Total turnover for the July to September period reached 8.9 billion pounds, a 5% increase over the same period last year. This growth was driven by strong performance in HIV, cancer, and lupus medicines. However, vaccine revenue fell by 2% to 2.6 billion pounds. The shingles vaccine Shingrix saw a 5% decline, while the respiratory syncytial virus vaccine Arexvy dropped by 24%. This decrease for Arexvy was partly attributed to difficult comparisons with the previous year's figures. In contrast, meningitis vaccine sales increased by 12%.

GSK recorded 318 million pounds in restructuring charges for the quarter, with further costs expected in the coming years. The total cost of the restructuring program is estimated at 2.4 billion pounds, with the majority of expenses falling due in 2026 and 2027. Chief Executive Luke Miels stated that the company is slightly ahead of its three-year plan to save 1.9 billion pounds annually. These savings are intended to redirect funds toward research and development. Miels noted that the impact on the United Kingdom would be relatively limited, affecting support roles in human resources and procurement at the London headquarters as well as hubs in Poland and India.

In the Belgian reorganization, the company plans to increase the use of digital tools and automation. Belgium will continue to produce the majority of the company's vaccines. GSK employed nearly 67,000 people worldwide at the end of the previous year. Miels defended the market position of Arexvy, stating that the company maintains leadership in market share against competitor Pfizer. He indicated that order volumes outside the United States remain strong and suggested that the next few months would provide a clearer picture of sales trends.

Investors also expressed concern regarding the upcoming loss of patent protection for dolutegravir, a major HIV drug. This change toward the end of the decade will allow competitors to introduce cheaper generic versions. GSK has set a target to achieve annual revenue exceeding 40 billion pounds by 2031. The company aims to rebuild its cancer business as part of this expansion. Miels announced several acquisitions since taking over from Emma Walmsley in January, including a 7.9 billion pound purchase of a US-based cancer specialist. A cost-saving program launched in July is also designed to accelerate drug development.

The company maintained its annual forecasts, with research and development spending projected to grow faster than overall sales. GSK expects to initiate 22 late-stage studies of new medicines by the end of the year. Miels described Shingrix as a remarkable product with the potential for growth in the coming year. Two large studies are currently examining whether the vaccine reduces the risk of dementia and major cardiovascular events, such as heart attacks and strokes. First data from the cardiovascular study is due in 2027, while dementia study results are expected in 2029. Miels characterized both potential outcomes as transformative. High street chemists in Britain have reported increased demand for the shingles vaccine following studies linking it to a lower dementia risk. Miels noted that while many studies show a correlation, the company is working to demonstrate causation.