Boost for GSK and Astra

Vaccines bring profit boost

Analysts have estimated that the UK's two drug giants, GlaxoSmithKline and AstraZeneca, can expect a GBP£1.5 billion boost thanks to vaccines to treat the ongoing swine flu pandemic.

The news comes despite the fact that the numbers, which relate to the vaccines that the firms have been rushing to release over the last few months, will not be included in third-quarter results which are expected later this week.

According to reports, while sales of GSK's anti-viral treatment Relenza are expected to hit GBP£180 million in the fourth quarter, sales of the firm's Pandemrix vaccine are expected to hit GBP£1 billion.

AstraZeneca, meanwhile, could see their nasal spray treatment generate GBP£275 million of revenue over the last three months of the year, according to analysts.

Lag in reports

Thanks largely to a weak pound in relation to the dollar, both firms are expecting to post considerable increases in revenue and profit this week, despite the fact that the numbers for swine flu vaccines will not be included in third-quarter figures.

The results will begin on Wednesday with GSK, expected to post increased revenue of 15pc to GBP£6.7 billion for the third quarter. Profit is expected to rise 29pc to GBP£2.01 billion.

Interestingly, although the results will not include sales of swine flu vaccine, they are expected to be bolstered by an estimated GBP£130 million from sales of Relenza, marking a 10-fold increase on the same period last year.

In addition, the announcement of third-quarter profits will come on the same day GSK expects to start selling its vaccine Pandemrix.

The reports are similar to those from last week, which suggested that Swiss-based firm Novartis are expected to see an extra US$400-700 million in their fourth quarter alone from their H1N1 pandemic flu vaccine sales.

For now though, for the UK firms, GSK says it will be charging individual countries for orders of its vaccine on a "sliding scale" basis, based on World Bank ratings.

AstraZeneca, meanwhile, which reports on Thursday, faces increased pressure to show that its drug development pipeline - which has taken a number of setbacks recently - has the potential to boost revenue over the medium to long term.

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