Will GlaxoSmithKline shares recover with new HIV and Covid-19 drugs?

The GlaxoSmithKline share price enjoyed a brief spike yesterday following EU approval of a new HIV drug. However, with delays in producing its first Covid-19 vaccine and falling sales, analysts remain bearish on GSK shares.

  • GlaxoSmithKline (GSK) shares up almost 1% on Monday following HIV drug approval
  • Analysts downgrade GSK share price forecast to ‘sell’
  • Can a new mRNA Covid-19 vaccine help GSK shares recover?

Shares in GlaxoSmithKline (GSK.L) increased by almost 1% on Monday from £12.77 to £12.87. However, the mini-revival was short-lived as shares opened down at £12.68 on 9 February. The positive move in an otherwise negative trend was thanks to ViiV Healthcare receiving authorisation for its HIV drug, Rukobia.

GSK has a major stake in ViiV, and the news means it may soon lead the way with regards to treating HIV patients who are ‘multi-drug resistant’. It’s hoped the breakthrough will be one of many over the next five years. GSK’s latest earnings report stated that there are 20 pipeline drugs in late-stage clinical trials.

As well as continued success with its shingles drug, Shingrix, GSK hopes to make its mark with myeloma therapy drug Blenrep, monoclonal antibody otilimab, and asthma therapeutic anti IL-5. The company is also planning to split over the next two years. One arm will focus on drug development, the other will tackle consumer healthcare. The split is part of a streamlining effort designed to improve efficiency and increase profitability.

What are the long-term prospects for GSK shares?

For all the positive noise, analysts are bearish on the company’s long-term prospects. Total sales for GSK were up 1% to £34.1 billion in 2020, but fourth quarter (Q4) revenue dropped 2% due to Covid-19 restrictions. With fewer patients seeking and receiving treatment for other illnesses, revenue has suffered. Delays in bringing a Covid-19 vaccine to the market have also hurt GSK.

Its collaboration with Sanofi (SASY.PA) has failed to show significant effects in the over 50s during recent trials. As such, it’s lagging behind the likes of Pfizer (PFE.N) in the race to suppress Covid-19. This has continued to have a negative effect on GSK shares in recent months. In fact, the impact of Covid-19 has been so great that Deutsche Bank analysts downgraded their GSK share price forecast to ‘sell’ following last week’s earnings report.

Will new Covid-19 vaccine reverse bearish trend?

There may, however, be hope on the horizon in the form of a new vaccine. Alongside 20 pipeline drugs, and a restructuring of the business, GSK has announced its intention to release a ‘next generation’ mRNA Covid-19 vaccine.1 Although the company is yet to perfect its first response to the virus, executives are confident they can release a more effective mRNA vaccine by 2022. The project is being run in collaboration with CureVac (CVAC.O), and the aim is to produce 100 million doses as soon as possible.

Given that Covid-19 will, seemingly, be around for many years to come, new vaccines will be crucial. GSK may have missed the initial surge, but future efforts could pay dividends. Does that mean the GSK share price could rise in the long term? Or do recent slip-ups mean analysts are right to be bearish on this company’s future prospects?


IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.