GSK reports a return to health
Ongoing restructuring plan near to completion
GlaxoSmithKline’s chief executive Andrew Witty expects future growth will come from emerging markets and Japan as the UK drugmaker firm saw its first-half profit to 30 June rise to £4.06bn, up from £1.83bn last year.
Turnover fell by 6% to £13.3bn, with pharmaceuticals and vaccines sales down 9% to £10.71bn and consumer healthcare sales up 6% to £2.6bn.
Witty said pharmaceutical and vaccines sales have benefited from strong performances in emerging markets and Japan.
‘This is really where all the growth is,’ he said. ‘We need to be in the markets where people are, four billion people live in these economies and every day that goes by these people on average are getting richer, on average they are demanding more healthcare provision.’
Sales of diabetes drug Avandia and herpes medicine Valtrex, as well as drugs for swine flu declined from £1.7bn in the first-half of 2010 to £268m.
Respiratory sales increased 3% to £3.6bn, with growth from Flixotide/Flovent (+3% to £398m), Ventolin (+20% to £295m), Avamys/Veramyst (+31% to £136m), and Xyzal (>100% to £30m).
Anti-bacterial sales grew 4% to £712m with growth led by sales in emerging markets (+9% to £313m) and Europe (+5% to £278m).
In oncology and emesis the impact of generic competition in the US to Hycamtin offset growth contributions from new products (Promacta, Votrient and Arzerra).
Dermatology sales were up 3% to £538m for the half-year, while HIV product sales were down 2% to £732m.
Underlying vaccines sales (excluding pandemic products) were £1.54bn (+12%), with strong growth in all markets except Europe.
Witty said the firm’s ongoing restructuring programme is ‘near to completion’ with savings higher than originally forecast at £300m, bringing total annual savings to £2.5bn a year by 2012.
‘Going forward we continue to apply sustained pressure to GSK’s cost base to realise further savings through improvements in areas such as support functions, supply chain and procurement efficiency,’ he said.
‘I think it's pretty clear that we're now in a position where we're able to deliver sustainable underlying sales growth.’