How GlaxoSmithKline’s Revenues Are Trending in Fiscal 2019

Revenue trends

In the first-quarter earnings press release, GlaxoSmithKline (GSK) reaffirmed its guidance of a low-to-mid single digit revenue CAGR (compounded average growth rate) from fiscal 2016 to fiscal 2020 at exchange rates prevalent when this guidance was first provided in May 2015. The company reported revenues of $9.97 billion, a YoY decline of 0.71%.

In the first-quarter earnings investor presentation, GlaxoSmithKline guided for a YoY low single-digit percentage revenue decline for its Pharmaceuticals business and Consumer Healthcare business in fiscal 2019. The company expects first-quarter revenue performance of the Shingrix vaccine to be indicative of the quarterly revenue run rate of its vaccines business.

Analysts expect GlaxoSmithKline’s revenues to rise YoY by 0.81% to $41.42 billion in fiscal 2019, 9.38% to $45.31 billion in fiscal 2020, and 2.73% to $46.54 billion in fiscal 2021. Analysts also expect the company’s revenues to change YoY by -0.79% to $9.86 billion in the second quarter, -0.03% to $10.54 billion in the third quarter, and 2.04% to $10.76 billion in the fourth quarter of fiscal 2019. While these forecasts are in dollar terms, GlaxoSmithKline’s presentation currency is Pounds Sterling.

Headwinds

The launch of Mylan’s Wixela Inhub, the generic version of Advair, was a key factor driving down GlaxoSmithKline’s Established Pharmaceuticals revenues YoY by 5% on a reported basis and 6% on a CER (constant exchange rate) basis to 2.24 billion pounds in the first quarter despite the positive impact of the launch of authorized generic versions of Advair and Ventolin.

The generic Advair also had a negative impact on pricing and revenue performance of another ICS/LABA therapy, Revlar/Breo. GlaxoSmithKline expects Revlar/Breo revenues to decline in the US in fiscal 2019. Although the company expects strong revenue performance for Revlar/Breo in ex-U.S. markets, the drug is expected to report a slight decline in the drug’s global sales in fiscal 2019.