Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

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?

Footnotes:
1 GSK

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

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

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets 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 spread betting and CFDs.

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