GSK reveals strong trial results for shingles drug

GlaxoSmithKline has revealed strong results from trials of a new shingles vaccine that some analysts believe could reach £1bn a year in sales, providing a fillip to the UK drugmaker as it tries to convince investors that it can deliver fresh growth.

The vaccine reduced the risk of shingles by 97.2 per cent in people over 50, compared with those taking a placebo, promising a breakthrough in efforts to prevent a painful virus that affects one-in-three people during their lifetimes.

The study came ahead of an important week for GSK as it prepares to provide more details of its research and development pipeline to investors on Wednesday next week. The following day shareholders will elect a new chairman at its annual meeting.

GSK hopes these events will help draw a line under a difficult period of falling sales and bribery scandals over the past two years, and increase investor confidence in the turnround efforts of Sir Andrew Witty, chief executive.

The shingles vaccine, known as HZ/su, is just one part of the R&D portfolio to be set out next week. But Alexandra Hauber, analyst at UBS, said its potential had been underestimated. She argued that peak annual sales of £1bn looked "very achievable" compared with the market's consensus forecast for just £100m-£200m.

Shingles, characterised by a painful skin rash, is caused by the reactivation of the latent varicella zoster virus, better known as chickenpox, often decades after the initial infection.

The GSK study of 37,000 people, published on Tuesday in the New England Journal of Medicine, showed that HZ/su maintained its effectiveness across all age groups over 50. This promises to set it apart from the only existing shingles vaccine, made by Merck of the US, which has peak efficacy of 70 per cent among people aged 50-59, declining to 38 per cent among the over 70s.

Moncef Slaoui, chairman of GSK's vaccines business, said he was "extremely encouraged" by the findings. Further studies are planned before regulatory approval is sought.

Vaccines have become a more important part of GSK's business after its acquisition of the vaccines unit of Novartis of Switzerland, completed last month, cemented its position as global leader in the market.

Sir Andrew is expected to tell investors next week that this combination of vaccines, pharmaceuticals and GSK's new consumer healthcare joint-venture with Novartis can return the group to long-term growth after the turbulence of recent months.

GSK has been badly hit by the decline in Advair, its best-selling but ageing asthma medicine, and a slow take-up of new drugs aimed at maintaining the group's dominance of the respiratory market.

Sir Philip Hampton, outgoing chairman of Royal Bank of Scotland, is due to succeed Sir Christopher Gent as GSK chairman after the group's annual meeting on May 7.

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