The pharma giant is unlikely to comment much on the new addition shareholder roster, but investors are expecting more news on the horizon as Elliot is known to be a catalyst for change.
“They don’t have a reputation for walking away, they tend to stay… We don’t know exactly what they are going to push for,” Steve Clayton, Head of Equity Funds at Hargreaves Lansdown, told Proactive.
“When you look at the longer-time progresses you can see that, whilst they’ve had success in the HIV sphere in the joint venture, Shingrix has been a great success until the pandemic. But by and large, Glaxo have struggled to convert research into value growth. I think Elliot will probably want to have such discussions with Glaxo, and also to realise the potential of the consumer healthcare segment.”
In terms of numbers, JP Morgan expect first-quarter revenue to slide 11% to £7.7bn, with pharma down 3%, vaccines down 22% and consumer down 15%, mostly because of the COVID-19 impact on shingles vaccine Shingrix.
The US investment bank forecasts core earnings per share (EPS) of 21.5p, 11% behind the latest Bloomberg consensus of 24.3p which “has not fully modelled the COVID-19 stocking unwind or the Shingrix weakness, even though both of these factors should be well anticipated by the market”.
“One of the key things is you’ve got to look at over the last year, apart from the difficulty with vaccinations, which is understandable given what’s happening with COVID-19, the other thing that stood out really has been the pharma businesses struggling a little bit with respect to its pipeline,” Adam Barker, analyst at Shore Capital, told Proactive.
“Some of the key cancer drugs maybe haven’t performed in the clinical trials like people had expected.”
The market will focus on the pace of recovery of Shingrix in the US, which could be slightly earlier than the third quarter recovery initially assumed in previous guidance, considering the pace of the COVID-19 vaccine rollout in the country.
Analysts will also wait for a preview of the June biopharma event, including details on the pipeline, mid-term targets for the business and dividend policy for the spinoff, including payout ratios.
GSK should also update on the consumer healthcare arm and whether it could IPO to generate funds for the pharma pipeline, rather than merely demerge.
Shares were trading at 1,344.4p on Tuesday afternoon.