GSK reports increased sales in 2013
CEO Sir Andrew Witty says it was the most productive period of R&D output in its history
GSK says 2013 was an 'exceptional year for R&D delivery' as it reported a 1% increase in sales to £26.5bn. Operating profit fell by 1% to £7.03bn.
Six major products, for respiratory disease (Breo and Anoro), melanoma (Tafinlar and Mekinist) and HIV (Tivicay) received regulatory approval and five additional regulatory filings were completed. Overall, the firm accounted for 19% of new drug approvals during 2013 and since 2009 it has achieved more NME approvals in the US than any other country.
The pharmaceuticals and vaccines divisions reported sales of £17.9bn (+1%) and £3.4bn (+2%), respectively. There was sales growth of 1% in the US, EMAP and Japan for these categories, although this was partly offset by pricing pressures and generic competition in Europe, where sales were flat compared with 2012.
Leading products in respiratory included Seretide/Advair, which saw sales grow by 4% to £5.3bn, largely driven by a strong US performance. Flixotide/Flovent sales increased 2% to £766m, while Ventolin rose by 2% to £642m. European respiratory sales were down 3% reflecting increased competition in many markets.
GSK is committed to investing behind continued growth in its emerging markets business
Anti-virals were down 6% to £667m, reflecting declines in Zeffix and Hepsera in China. CNS fell 8% to £1.5bn, with Seroxat/Paxil declining 16% to £285m, primarily due to generic competition in Japan and Europe.
Sales in cardiovascular and urogenital fell 8% to £2.24bn and Lovaza sales dropped 5% to £584m as a result of increased competition and a decline in the non-statin dyslipidemia prescription market. Arixtra sales fell 15% to £167m.
Much more positive performances came from metabolic product sales, which rose 10% to £174m, while oncology and emesis sales saw their second consecutive year of double-digit percentage growth, rising 22% to £969m. In this category, US sales were up 17% following strong performances by Votrient, Promacta and Arzerra, but also contributions from the launches of two new metastatic melanoma products, Tafinlar and Mekinist. Sales in Europe for oncology products grew 28%, led by sales of Votrient, which increased by 91% to £130m as it continued to build market share in many markets.
The rare diseases market continued to grow for GSK during 2013, up 7% to £495m. Volibris, for pulmonary arterial hypertension, and pneumocystis pneumonia treatment Mepron were the main drivers of this growth.
GSK's Chief Executive Sir Andrew Witty said in 2013 the company had focused on the delivery of increased growth, reduced risk and an improved long-term financial performance. It also delivered 'the most productive period of R&D output in the company's history'.
Looking further ahead, we continue to make fundamental changes to our business
He added that he was encouraged by the improved performance of its US business and said GSK is committed to investing behind continued growth in its emerging markets business.
In pharmaceuticals, last year GSK divested its anti-coagulant products for more than £700m. With its newly formed Established Products Portfolio (EPP), Witty says there are more opportunities to reduce complexity, enhance profitability and optimise the value of this group of products.
For 2014, the company is targeting core earnings per share growth of 4–8% CER on sales growth of around 2% CER.
'Looking further ahead, we continue to make fundamental changes to our business, including how we interact with our customers; investments in technologies to support research and manufacturing; new policies to determine the pricing and value of our products, and in the culture of our organisation,' he added.
'We believe these changes are vital in an industry with a 20-year business cycle and which operates in an environment as dynamic and as challenging as global healthcare.'