Sales dip at GSK while profits increase
Hit by decline in pandemic flu vaccines, Avandia and Valtrex
GlaxoSmithKline reported a 10% drop in sales to £6.59bn (US$10.8bn; b7.3bn) in the three months to 31 March 2011, compared with the first quarter of 2010, after a fall in sales of pandemic flu vaccines and anti-virals.
Quarterly profits were supported by strong sales of new products, expansion in emerging markets and Japan and the sale of a shareholding in Quest Diagnostics and remaining commercial interests in topical Zovirax in the US for £1.2bn.
GSK posted a net profit of £1.58bn (US$2.6bn; b1.8bn) before major restructuring in the first quarter, compared with £1.4bn a year earlier.
Sales were also hit by generic competition to herpes drug Valtrex and a steep fall in revenue for diabetes drug Avandia.
‘Reported sales were down 10%, reflecting a £1bn reduction in sales of pandemic products, Avandia and Valtrex versus a year ago,’ said chief executive Andrew Witty.
‘This impact is set to decline going forward and we expect underlying sales growth to translate into sustainable reported growth in 2012.’
Witty said the underlying sales – excluding Avandia, Valtrex and pandemic products – grew 4%, reflecting growth across the business including in emerging markets, Japan and its consumer healthcare business.
‘On the same basis, US and Europe Pharma sales declined 4% and 5% respectively, primarily as a result of the year-on-year impact of US healthcare reform and EU austerity measures.’
Witty added that pipeline delivery continues to be encouraging, with regulatory approvals for three new products so far this year – two in the US (lupus treatment Benlysta and Horizant for restless legs syndrome) and one in the EU (epilepsy drug Trobalt).