Drug Heavyweights GSK, Roche Topple As Covid Weighs On Sales Growth

GSK and Roche, two European pharmaceutical giants, relied on their respective vaccine and pharma sales to offset the massive declines in Covid. GSK and Roche stocks both fell on Tuesday.

GSK's Covid Treatment Xevudy sales plummeted by 98%, to 31 million British Pounds (roughly $38,6 million). The Food and Drug Administration revoked its approval for sotrovimab, a monoclonal antigen also known as Xevudy last year because it could not handle new variants. Roche's Diagnostics division also saw a 28% drop in sales, excluding exchange rate effects.

GSK's overall sales grew by 8%, or 6.95 billion pounds, in constant currency, which is about $8.67billion at today's rate of exchange. This easily beat the analysts' forecast of $8.07 billion. FactSet reported that adjusted profit was 92 cents per share. Analysts had predicted GSK earnings at 83 cents.

GSK's stock fell 2.6% in morning trading today, trading at around 36.

GSK Stock: Shingrix Sales Rise

GSK's revenue from vaccines increased by 15% in the first quarter, even if you exclude the effect of exchange rates. It reached about $2.54billion. Analysts at GSK predicted $2.37 billion in revenue from the business. The decline in Xevudy impacted specialty medicine sales by 33%. General medicine sales grew 9%.

Shingrix is the company's most profitable vaccine, and it aims to protect against shingles. Shingrix's first-quarter sales grew 11%, or $1.04 billion, in constant currency. HIV treatments at GSK grew 15% in the Specialty Medicines Unit to $1.83 billion. Trelegy, GSK's respiratory inhaler, also saw strong growth. Sales increased by 28%, to $580 million.

GSK has confirmed its outlook through 2023. GSK expects its sales to grow 6%-8%, and adjusted earnings to rise 12%-15%.

Covid weighs on Roche Stock

Roche also reported that demand for Covid tests fell in the quarter ending March, resulting in a total of 3% drop in sales, or 15.32 billion Swiss Francs, which is about $17.2 billion. Analysts who cover Roche's stock had expected sales of $16.57 billion.

The pharmaceutical sales increased by 9%, to $13.14 billion. Diagnostic sales, however, fell by 28% and reached around $4.07 Billion.

Roche anticipates a decline in sales by a single-digit percentage for the full year due to a drop of Covid sales, which fell sharply to $5.6 billion. Roche's pharmaceuticals and diagnostics segments are expected to grow "solidly" without this.

Roche shares fell 3% to 38.70 - below their 200-day moving median. According to MarketSmith.com's 50-day line, shares are forming a base cup with a buying point at 43.42.