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The outbreak of the pandemic has brought the world economy to a screeching halt. The countries have imposed lockdowns with millions of people affected by the deadly virus. Most of the sectors have stopped their operations and are looking for ways to preserve cash. Some of the sectors are badly hit, and many of the businesses might collapse. Now, the world has pinned its hopes on the pharmaceutical industry to come to an early rescue and find a cure for the Covid-19 disease.
In the pharmaceutical sector, due to disruption caused by the novel coronavirus and diversion of resources to other clinical priorities, major clinical trials have taken a back seat. The companies are supporting ongoing clinical studies by enrolling new patients, but researchers would be able to conduct trial only if they follow the protocol. On some projects, where deemed do not seem to be necessary by the company, the enrolment of new patients have been paused.
GlaxoSmithKline Plc had always been encouraging regulatory compliance in its studies and has implemented proactive measures to protect study participants for conducting clinical trials. However, due to Covid-19, it has prioritised the disease and has delayed a vast majority of clinical trials. Though, the company does not expect any significant delays to regulatory approvals on several products undergone review.
The FTSE 100 listed pharmaceutical company’s portfolio and verticals can play an important role in helping the company to respond to the novel coronavirus. The company has implemented business continuity plans across all its essential operations and was keen on providing support during this period of unprecedented crisis. The company has made amendments to its policies to make sure its representatives are safe as well as mobilising resources across the company in order to support them.
The company has enough cash for its operational requirements, and the liquidity position of the company remains strong. In addition, the company has access to other sources of finance. The company has its supply chains and manufacturing units intact. However, at this point, it is difficult to assess the impact of the pandemic, which has claimed more than 225 thousand live across the world. Despite the several efforts made by the company, there are a few challenges which lie ahead for the remaining part of the year.
With all focus on finding a vaccine for coronavirus, it’s not only GSK but all the major pharma companies have postponed or are going slow on clinical trials for non Covid 19-related illnesses, that has become a serious concern for the patients suffering from other ailments as they won’t be able to get the treatment they need. Also, as the world is in lockdown, the access to discretionary treatments for patients could be affected, and as the duration of the impact caused by the pandemic remains unknown, it may become a serious concern. Furthermore, in the present scenario, it would be difficult for the company to sustain the supply chain as well as third parties along with manufacturing activities. The company is monitoring these challenges proactively.
What lies next for GSK?
The company would use its portfolio, technology, and required resources to offer solutions which could support the global response to the Covid-19. By using its innovative adjuvant technology in collaboration with other medical institutions across the globe, the company is likely to develop multiple adjuvanted COVID-19 vaccines. In order to counter a devastating situation like this, vaccines would be produced at a faster rate.
Earlier this month, the company announced sharing of its adjuvant technology with Sanofi to develop a vaccine for the pandemic. S-protein COVID-19 antigen, which is developed by Sanofi and based on recombinant DNA technology, that helps in replicating the proteins found in the coronavirus.
The world would need more vaccine doses to protect people, and this could be possibly be done by using company’s adjuvant technology. The adjuvant reduces the concentration of vaccine protein in a single dose which could help in speeding up production of more vaccine doses which is the need of the hour.
The company is also exploring therapeutic options alongside vaccine development. The company is working on a project, which aims to identify and accelerate new anti-viral antibodies that could be used as therapeutic or preventative options for the family of the coronaviruses. This project was announced earlier this month in collaboration with Vir Biotechnology to fight future coronavirus outbreaks.
In addition, the company is researching its existing portfolio of assets to find an application which can be used in the prevention or treatment of the deadly pandemic. The company is lending support to the national testing centres and in the distribution of essential supplies and PPE to healthcare staff.
GSK’s business highlights for Q1 2020
The company reflected strong underlying performance in its sales growth and saw strong demand for maintaining stock levels for many of its products. The company’s reported sales grew by 19 per cent at a constant exchange rate to £9.1 billion in the first quarter of 2020. The company’s adjusted operating margin stood at 29.4 per cent during the period. Due to good operating performance, the company’s earnings per share was up by 89 per cent to 31.50 pence in the first quarter of the fiscal year 2020. The company has a Free cash flow of £531 million during the period. An interim dividend of 19 pence per share was declared by the company in the first quarter of 2020.
On 30th April 2020, at the time of writing (before market close, GMT 10:34 AM), Glaxo SmithKline shares were 0.87 per cent up against its previous day closing price and were trading at GBX 1,691.60. Stock's 52 weeks High and Low is GBX 1857 /GBX 1328.19. At the time of writing, the share was trading 27.36% higher than its 52-week Low and 8.91% lower than its 52-week High. The beta of the company’s stock stood at 0.76, reflecting lower volatility as compared to the benchmark index. The total M-Cap (market capitalisation) of the company while writing stood at £84,135.83 million along with a dividend yield of 4.74 per cent.
About Glaxo SmithKline Plc
Glaxo SmithKline Plc (LON:GSK) is the United Kingdom based global pharmaceutical major. The company's portfolio of products includes prescription therapeutics, medicines and vaccines. Its prescription medications range across therapeutic value chain includes medications for anti-infective, dermatological conditions, gynaecology, diabetes mutatis, cardiovascular disorders and respiratory ailments.
The company’s shares are primarily listed on the London Stock Exchange, where they trade with the ticker name GSK. The company’s shares also have a secondary listing on the New York Stock Exchange, where also they trade with the ticker name GSK. The company’s shares are constituents of the FTSE 100 index. The company also provides a large number of vaccines for a range of diseases namely, for the prevention of Hepatitis A, Hepatitis B, invasive ailments as a result of Hemophilus influenza, chickenpox, diphtheria, pertussis, tetanus, rotavirus, cervical cancer and streptococcus pneumonia among others.
