CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider (Saxo Bank). You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Equity Research; GSK

GSK Q4 and FY2016


GSK is a combine of i) Pharmaceuticals (normally a growth area assuming periodic blockbuster drugs ii) Vaccines (lower margin/ steady growth) and iii) Consumer healthcare (increasingly commoditized and price sensitive). The GSK business mix is far lower risk and less pipeline dependent than its peers. GSK keep open the option of a demerger of consumer healthcare or vaccines at some point.

President Trump has said US pharmaceuticals reform is on his agenda. As elsewhere, we are ahead of precise reform proposals or a legislative agenda. The US is the only major pharmaceutical market with unregulated pricing. The key fight will come when the Trump reforms emerge. Only then can we estimate the timing and revenue hit. For GSK, US derived revenues were £10.2bn in 2016 (36.55% group revenue) so this is a worry going forward.

GSK was a major beneficiary of Brexit’s toxic effect on sterling in FY2016. The reverse holds true, there is earnings risk in FY2017 if sterling rallies, generic Advair arrives early and President Trump starts competitive tenders for drug purchases.

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