Following the U.S. public health agency’s decision to narrow its age recommendation for the use of respiratory syncytial virus (RSV) vaccines, GSK’s shares plummeted by as much as 7% on Thursday. The decision dealt a significant blow to the drugmaker’s hopes for its new blockbuster medicine, Arexvy. This move by the U.S. Centers for Disease Control and Prevention to limit the recommendation for RSV vaccines in older adults has created a negative outlook for GSK, as it diminishes the potential market for the vaccine in the upcoming flu season.
The repercussions of the narrowed age recommendation were immediately felt in the stock market, with GSK’s shares touching their lowest point since January on Thursday. The stock was listed among the poorest performers in the FTSE 100 index and Europe’s STOXX 600. On the other hand, Pfizer’s shares also saw a decline of approximately 2% on Wednesday but managed to trade slightly higher in U.S. pre-market trading on Thursday. Moderna, which recently received U.S. regulatory approval for its RSV vaccine, witnessed a marginal fall in its share price as well.
Arexvy: GSK’s New Blockbuster Medicine
Arexvy is a crucial addition to GSK’s portfolio as the company navigates patent expiries and decreasing revenues from its existing bestsellers in the coming years. The vaccine, which raked in 1.2 billion pounds ($1.5 billion) in sales last year, quickly surged ahead of Pfizer’s competing vaccine. Despite facing some setbacks with the narrowed age recommendation, GSK remains optimistic about Arexvy’s potential to reach peak annual sales exceeding 3 billion pounds ($3.79 billion).
Industry analysts have expressed their concerns about the impact of the CDC’s decision on GSK’s revenue expectations. The revision in the age recommendation, coupled with increased competition from Moderna’s RSV vaccine, is expected to alter the earnings forecasts for Arexvy. JPMorgan analysts highlighted the need for adjustments in consensus Arexvy forecasts to align with the evolving market dynamics.
Despite the setback caused by the narrowed age recommendation, the successful launch of Arexvy and its positive reception in the market indicate a promising future for GSK. The company’s strategic pivot towards vaccines and infectious diseases post the spin-off of its consumer healthcare business has demonstrated a strong commitment to innovation and growth. The renewed focus has not only reassured investors but also instilled confidence in analysts regarding the company’s drug development pipeline.
While the recent regulatory decision may have momentarily dented GSK’s stock performance, the company’s resilience and strategic vision position it well to overcome short-term challenges and continue its trajectory towards long-term success in the pharmaceutical industry.