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Vaccines, management in focus as GSK, AstraZeneca report

imageStock Markets1 hour ago (Apr 26, 2021 07:15AM ET)

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(C) Reuters. FILE PHOTO: Company logo of pharmaceutical company GlaxoSmithKline is seen at their Stevenage facility

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By Pushkala Aripaka

(Reuters) – GlaxoSmithKline (NYSE:GSK) Plc and AstraZeneca (NASDAQ:AZN) Plc publish quarterly results this week, with Britain’s two biggest drugmakers both facing pressure from different quarters.

AstraZeneca was one of the leaders in the global race to develop a COVID-19 vaccine but has faced a series of controversies.

GSK has fallen behind in the vaccines race and will be certain to face questions about its broader strategy after a report that U.S. activist investor Elliott had built up a multi-billion pound stake.

GSK reports on Wednesday, with AstraZeneca due on Friday.

VACCINE FOCUS

AstraZeneca will for the first time break out sales from its coronavirus vaccine, Vaxzevria, which it is working on with Oxford University.

Use began early this year, and AstraZeneca has said it will not profit from the vaccine while COVID-19 is being treated as a pandemic.

Johnson & Johnson (NYSE:JNJ) last week reported $100 million in sales for its shot.

The two vaccines are embroiled in controversies over possible links to rare blood clots. For AstraZeneca, these events add to a list of problems that have dogged its shot, including doubts over dosing, manufacturing delays and supply cuts.

“Despite vaccine headwinds and headlines, (AstraZeneca) remains a top pick,” Leerink analysts said in a note.

AstraZeneca Chief Executive Pascal Soriot and his management’s updates on production and safety will overshadow financial results, which are seen beating expectations on wide offerings and a boost from divestments, JPMorgan (NYSE:JPM) analysts said.

For its part, GSK, the world’s biggest vaccines maker by sales, has focused on supplying its vaccine booster to other COVID-19 shot developers and helping to produce their jabs. Rather than making its own coronavirus vaccine, it is also working on potential treatments.

Updates on GSK’s efforts with French partner Sanofi (NASDAQ:SNY) are highly anticipated, after the duo suffered setbacks, delaying their potential vaccine’s launch.

CORE BUSINESS

AstraZeneca has said it expects 2021 revenue to rise by a low teens percentage and core earnings to grow to $4.75- $5.00 per share.

GSK has predicted earnings will fall by mid-to-high single digits this year.

This time last year, AstraZeneca and GSK’s first quarters benefited from stockpiling.

Updates on AstraZeneca’s $39 billion buyout of Alexion (NASDAQ:ALXN), announced in December, will also be sought, as will details on anaemia treatment roxadustat which is under regulatory review for broader use.

GSK has warned of a lower dividend after it splits up next year into two separate companies, one focusing on pharmaceuticals and another on consumer products.

The separation was spearheaded by boss Emma Walmsley to simplify operations. A former head of GSK’s consumer business, Walmsley took the top job in 2017 https://www.reuters.com/article/us-gsk-ceo-idUSKCN11Q0IC despite some investor pressure to name an outsider to the role.

Shareholder pressure may increase with the involvement of Elliott. Barclays (LON:BARC) analysts said in a note that since a split is under way, it was “unclear what incremental steps Elliott may want”.

FORECASTS VS EXPECTATIONS

COMPANY PERIOD FORECAST ANALYST REPORTING

EXPECTATIONS

GSK Q1 N/A 7.83 BLN POUNDS APRIL 28

TURNOVER, EPS

21.9 PENCE

(COMPANY

COMPILED)

ASTRAZENECA Q1 N/A $7.01 BLN SALES, APRIL 30

EPS $1.48

(REFINITIV EIKON)

GSK FY EARNINGS TO 33.58 BLN POUNDS N/A

FALL BY TURNOVER, EPS

MID-TO-HIGH 100.5 PENCE

SINGLE DIGITS (COMPANY

COMPILED)

ASTRAZENECA FY REVENUE TO $31.16 BLN SALES, N/A

RISE BY A LOW EPS $5.10

TEENS (REFINITIV EIKON)

PERCENTAGE,

EPS OF $4.75

TO $5.00

Vaccines, management in focus as GSK, AstraZeneca report