Benzinga | Feb 3, 2021 11:43AM EST

GlaxoSmithKline Shares Slip On Weaker Profit Forecast For 2021, Plans To Cut Dividend

* GlaxoSmithKline Plc (NYSE: GSK) expects profit to fall this year, as the company cites an increase in research spending in pursuit of the next blockbusters.

* Earnings per share are expected to decline by a mid-to high-single-digit percentage. It is planning to more than double the number of blockbuster drugs in its portfolio by 2026.

* Turnover for 2020 inched up 1% to ?34 billion, driven by a 12% in pharmaceuticals and offset by a 3% dip in pharmaceuticals and lower vaccine revenue.

* Profit before tax was 12% higher at ?6.9bn, while earnings per share surged 23% to 115.5p due to cost control measures.

* The company plans to announce a new distribution policy, implemented from 2022 onwards, to support growth and investments. Expected to be lower than the current value. Shareholders will receive a final dividend of 80p per share in FY2021.

* GSK added that it is on track to separate two new standalone Biopharma and Consumer Healthcare companies in 2022 to save ?300 million annually while it also made ?1.1 billion from divestments.

* Earlier today, GSK announced a COVID-19 vaccine collaboration with CureVac NV against variants of the coronavirus.

* Price Action: GSK shares are trading lower by 5.59% at $35.49 on the last check Wednesday.