GlaxoSmithKline’s 1Q17 Estimates: Vaccines Business

GlaxoSmithKline (GSK) is focused on strengthening its Vaccines business. For this, the company acquired the Meningitis and Other Vaccines business from Novartis (NVS) in 2015.

The chart below shows revenues for the Vaccines Segment over the last few quarters. The revenues of the Vaccines segment are expected to increase in 1Q17, mainly due to the strong performance of Rotarix, Boostrix, the meningitis vaccines Menveo and Bexsero, and key vaccines including Infanrix, Pediarix, and Hepatitis vaccines.

The Novartis acquisition has improved sales for GSK’s Vaccines business, mainly driven by the sales of meningitis vaccines Bexsero in Europe and Menveo in the US and Europe.

Revenues for the US markets are expected to increase during 1Q17, driven by increased demand for the drug Bexsero. Also, the lower sales of Fluarix, a flu vaccine, are expected to decline in 1Q17.

Revenues for the European markets and international markets are expected to increase during 1Q17, mainly driven by the strong performance of Bexsero, Synflorix, Boostrix, and Hepatitis A vaccine sales. Also, the vaccine Infanrix/Pediarix is losing market share to its competition.

The major competitor for GSK’s meningitis products like Bexsero is Pfizer’s (PFE) Trumenba. Sanofi Pasteur’s (SNY) meningitis vaccine is Menactra. To gain broad-based exposure to these companies, investors can consider the PowerShares International Dividend Achievers ETF (PID) which holds 2.9% of its total assets in GlaxoSmithKline. The PowerShares International Dividend Achievers ETF (PID) holds 2.4% of its total assets in GlaxoSmithKline.