£1.5bn swine flu vaccine boost for GSK and Astra - Printable Version
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£1.5bn swine flu vaccine boost for GSK and Astra - --- - 10-28-2009 06:59 AM
£1.5bn swine flu vaccine boost for GSK and Astra
The swine flu pandemic will result in a £1.5bn boost for the UK’s two drug giants, according to analysts’ estimates.
By Jonathan Russell
Published: 8:18PM GMT 25 Oct 2009
A swine flu vaccine being tested
Although the numbers will not be included in third-quarter results due to be released this week, GlaxoSmithKline and AstraZeneca are expected to reap significant financial rewards for vaccines they have been rushing to release over the last few months.
Analysts expect sales of GSK’s Pandemrix to hit £1bn in the fourth quarter, while its anti-viral treatment Relenza could hit £180m.
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AstraZeneca’s nasal spray vaccine could reach £275m of revenue over the last three months of the year.
Although there has been a relative lull in the number of cases of swine flu in the UK in recent months, last week saw a significant increase, with 53,000 reported cases. The number of deaths now exceeds 125.
The onset of colder weather and the usual seasonal increase in the number of flu cases is expected to result in a rapid rise in cases over the next few weeks.
Although the numbers for swine flu vaccines will not be included in third-quarter figures, both companies are expected to post significant increases in revenue and profit, largely down to the weak pound in relation to the dollar.
GSK, which announces its results on Wednesday, is expected to post increased revenue of 15pc to £6.7bn for the third quarter, and profit is expected to rise 29pc to £2.01bn. Although the results will not include sales of swine flu vaccine, they are expected to be boosted by an estimated £130m from sales of GSK’s swine flu antiviral treatment Relenza, a 10-fold increase on the same period last year.
GSK will announce on Wednesday when it expects to start shipping its vaccine Pandemrix.
AstraZeneca, which reports on Thursday, is also expected to update the market on the development of its nasal spray vaccine.
Although the sales of swine flu- related products are set to rise, GSK has not released any figures on its profit margin on its vaccine.
It has, however, said it will be charging individual countries on a sliding scale based on World Bank ratings. The company has invested $2.5bn in the development of the drug over five years.
The impact of competition from generic drug manufacturers is likely to be slightly less when the two companies reveal their results this week.
Jeremy Batstone-Carr, analyst at Charles Stanley, said: “The adverse impact of off-patent issues is lessening, with just Valtrex [a herpes drug] to suffer in December, following which point we expect underlying improvements to emerge.”
The pressure will be on AstraZeneca to show that its drug development pipeline, which has taken a number of recent setbacks, has the potential to boost revenue over the medium to long term.
Positive data about the diabetes drug Onglyza and heart attack treatment Brilinta have offset concerns about the health of AstraZeneca’s pipeline, but investors will be hoping for more good news.