Glaxo’s Caution on Vaccination Rate Recovery Raises Concern

(Bloomberg) -- GlaxoSmithKline Plc, the British pharmaceutical giant, said its 2020 earnings forecast is at risk if routine vaccination rates fail to recover after lockdowns caused by Covid-19.

The shares slipped as much as 2.8% in London after the drugmaker said on Wednesday that any delay in the recovery of those vaccination levels could have a significant impact this year. The company earlier this year said it expected earnings per share, excluding some costs, to decline as much as 4%.

Glaxo is among large pharma companies wrestling with disruption from the pandemic. The London-based company’s vaccines unit was hit especially hard as the crisis hindered visits to health workers. Glaxo said its forecast depends on rates returning in the U.S., which it expects in the third quarter.

While pediatric vaccinations have returned to pre-Covid levels, adolescent and adult routine shots have been slower to resume, Glaxo Chief Executive Officer Emma Walmsley said on a call with reporters. A three-month delay in the vaccination rate recovery could affect earnings per share by up to 5 percentage points, as an example, the company said.

“With lockdown measures, we have seen an impact as people’s confidence, or willingness, in being able to access vaccines slowed a bit,” she said. “We are very clearly dealing here with a question of when, not if” rates return.

Glaxo and Sanofi, partners in an experimental coronavirus vaccine, signed a deal earlier Wednesday to supply the U.K. government with as many as 60 million doses of the shot. Sanofi said it expects to gain regulatory approval for the jab in the first half of 2021.

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