GSK (LSE:GSK) completed its 2024 fiscal year with significant developments, marked by strong results and an outlook upgrade, culminating in market optimism reflected by a notable rise of its stock price. The pharmaceutical giant's shares surged over 5% following the release of their impressive fourth-quarter and full-year results on February 5. Though GSK had battled challenges throughout 2024, including concerns surrounding the litigation of its heartburn drug Zantac, the firm managed to showcase resilience.
For the year, GSK reported total revenues of £31.4 billion, translating to a 7% increase based on constant currency rates—impressive enough to beat broker expectations by approximately £300 million. Overall turnover rose by 4% when calculated using actual exchange rates. Chief Executive Emma Walmsley expressed her satisfaction with the results, stating, "GSK delivered another year of excellent performance in 2024, with strong sales and core profit growth driven by accelerating momentum of our specialty medicines portfolio.”
The standout performers within GSK's portfolio were its specialty medicines, which saw sales swell by 19% at stable currencies to reach £11.8 billion. The oncology segment particularly thrived, with nearly double the revenues compared to the previous year, marking up by 98%. This was pivotal for GSK as it helped offset declines faced within its vaccines division, which struggled with regulatory challenges, leading to a 4% drop overall, including Arexvy's severe sales decline of 51% due to new age restrictions for respiratory syncytial virus treatments.
Though total operating profit faced setbacks dropping by 33% to £4 billion, largely attributed to the £1.8 billion charge for Zantac litigations, GSK's core operating profit demonstrated strength by climbing 11%. This indicator showcases the company's solid fundamentals, particularly when excluding the litigation factors. Looking forward, GSK expects revenue growth between 3% and 5% for 2025, alongside core operating profit growth between 6% and 8%. On this note, Walmsley added, "Our outperformance and stronger balance sheet support these investments and others planned in R&D, as well as the opportunity to provide enhanced shareholder returns through our progressive dividend and the share buyback program."
To strengthen investor confidence even more, GSK increased its long-term sales projection for 2031 to over £40 billion, up from the previous forecast of £38 billion. This adjustment is believed to reflect substantial advancements in GSK's drug development pipeline, which comprises 71 specialty medicines and vaccines currently under clinical trials. Of these products, 19 are at Phase III testing or registration stages, affirming GSK's preparedness for future market competitiveness.
The company's strategic commitment to research and development remains pivotal, especially as GSK looks to secure five significant new product approvals this year, including Blenrep, targeted at treating multiple myeloma, and Depemokimab, aimed at severe asthma treatment. An additional boost to this initiative includes the announcement of a £2 billion share buyback program set for execution over the next 18 months, expected to return value to shareholders. Investors greeted this news positively, considering GSK's shares dipped significantly throughout 2024 from highs above 1800p to below 1300p amid various challenges and setbacks.
Market analysts remain cautiously optimistic about GSK's future. Although the company has faced significant pressures, its strategic pivots and focus on specialty medicines have positioned it well for potential recovery. Analyst Richard Hunter of Interactive Investor offered insights, recognizing the promising nature of current numbers but emphasized the persistent consensus classification of the shares as ‘hold’ for now.
Last year's rollercoaster reflected broader uncertainties affecting GSK, yet the company is gearing up for what it hopes to be another year marked by profitable growth. GSK's stock performance post-release reflects market confidence, but the hope is for sustained momentum, particularly as the firm tackles its vaccine and litigation challenges head-on.