GSK stock will remain strong despite slowing emerging markets, say analysts

Following concerns from US drugmaker Eli Lilly (NYSE: LLY) about the slowdown of emerging markets and devaluation of the Japanese yen affecting its growth, analysts Panmure Gordon (UK) have warned that UK pharma major GlaxoSmithKline (LSE: GSK) could also be affected by these issues.

They said that GSK is most exposed to Japan, where it generates some 8.4% of revenues. However, it advised investors that the company remains strong because of its respiratory pipeline of Relvar/Breo (ICS/LABA), Anoro (LAMA/LAMA), GSK961081 (MABA), umeclidinium (LAMA), fluticasone furoate (ICS) and mepolizumab (an anti-IL-5 MAb).

“This respiratory pipeline should provide mitigation to increased risk to the company’s biggest product Advair [fluticasone and salmeterol]. Earlier this month the [US Food and Drug Administration] issued draft guidance for the development of substitutable generic copies of combination inhaled drugs, including Advair. We estimate Advair represents some 25% of the company’s profits currently,” the analysts noted.