GSK PLC (LSE:GSK, NYSE:GSK) respiratory syncytial virus (RSV) vaccine, Arexvy, faces challenges that could impact its financial future, according to a report by Jefferies.
The jab is designed to protect older adults from RSV, a common virus that can lead to severe respiratory infections. It has shown potential, but recent data suggest GSK may need to reduce its sales expectations, according to the US investment bank.
One concern is how often people will need a booster shot. While initial plans anticipated boosters every two years, new studies suggest they might only be required every three or four years.
This would lower the demand for the vaccine, which could reduce GSK’s projected peak sales for Arexvy from $4.5 billion to as low as $2.7 billion, Jefferies said in a note.
GSK is also grappling with weaker-than-expected prescription rates in the United States. Third-quarter Arexvy sales are now estimated to reach between £165 million and £185 million, significantly below analysts' earlier expectations of £504 million.
The slower start to RSV vaccination season and early uptake of COVID-19 vaccines might be factors in these reduced figures, analysts have noted.
The upcoming American Lung Association’s awareness campaign could help increase public knowledge about RSV and boost future sales.
However, GSK still faces uncertainty as the US Advisory Committee on Immunization Practices (ACIP) may not fully recommend the vaccine for all age groups without further safety data, particularly concerning rare side effects.
The UK drug giant's predicament isn't helped by the fact the vaccine market for RSV is becoming increasingly competitive.
Any delay in the broader acceptance or reduced frequency of boosters could open doors for competitors, further affecting GSK’s market share, the Jefferies research said.
Despite the bearish tone of the note, the US bank rates the stock a 'buy' up to 2,100p. In morning trading, the shares were off 1.8% at 1,489p.