GSK’s shares took a hit, dropping as much as 7% following a U.S. public health agency‘s change in recommendation for the use of respiratory syncytial virus (RSV) vaccines. This change directly affects the drugmaker’s new blockbuster medicine, Arexvy, which was introduced in the United States last summer. The recommendation by the U.S. Centers for Disease Control and Prevention (CDC) has not only impacted GSK but also impacted rival Pfizer, and other companies like Moderna who have launched RSV vaccines.
The narrowing of the age recommendation for RSV vaccines in older adults by the CDC comes as a blow to GSK’s ambitions for Arexvy. This new recommendation reduces the market size for RSV shots in the upcoming flu season, affecting the potential sales and revenue projections for the vaccine. Not only did GSK’s shares plummet to their lowest since January, but Pfizer and Moderna also experienced a dip in their share prices following the announcement.
Revenue Projections
Arexvy was projected to be GSK’s new blockbuster medicine, generating significant sales since its launch last year. The vaccine had a strong start, surpassing rival Pfizer’s vaccine in terms of sales. However, with the change in recommendation and the limited use in certain age groups, revenue projections for Arexvy may need to be revised. GSK forecasts that the vaccine will reach peak annual sales of over £3 billion, but this projection may be impacted by the recent CDC recommendation.
Despite the setback, analysts believe that as more real-world safety data accumulates, the age recommendation for RSV vaccines may be expanded in the future. The successful launch of Arexvy had initially boosted investor confidence in GSK’s pipeline of drugs, especially after the company’s focus on vaccines and infectious diseases following the spin-off of its consumer healthcare business. However, the revised recommendation has raised concerns about the vaccine’s market potential and long-term growth prospects.
The impact of the U.S. public health agency’s recommendation on GSK’s shares highlights the volatility and uncertainty in the pharmaceutical industry. While GSK’s Arexvy was poised to be a game-changer in the RSV vaccine market, the recent change in recommendation has significantly impacted the company’s revenue projections and market performance. Moving forward, GSK will need to reassess its strategy for Arexvy and navigate the evolving landscape of vaccine development and distribution to sustain its position in the market.