GlaxoSmithKline Announce Q1 Results
Pharmaceutical drug maker, GlaxoSmithKline (GSK), today announced that their revenue increased just 1% in the first quarter, reflecting burdens on the organisation from government price cuts in Europe and some emerging markets, and hard year-by-year comparisons.
GSK’s results were boosted by the sale of U.S. rights to a bladder drug, which added approximately £170 million ($275 million) to their turnover.
GlaxoSmithKline, who are currently trying to buy their long-time biotech partner Human Genome Sciences (HGS) for $2.6 billion, is emerging from a trough caused by patent expiries and collapsing sales of their diabetes pill, Avandia, which has been linked to heart risks.
GSK’s Chief Executive, Andrew Witty, reiterated that GSK is on track to return to sales growth in 2012, after a difficult few years, with gradually improving margins.
In response to the latest results, GSK commented that “European markets remained challenging and despite good progress on new launches in a number of therapeutic areas, particularly cardiovascular/urogenital and oncology, the continued implementation of government austerity measures left pharmaceuticals and vaccines sales down 6 percent.”
Quarterly sales were £6.64 billion, generating “core” earnings per share (EPS) increases of 5% at 27.3 pence, GSK commented.
Analysts, on average, had predicted sales of roughly £6.83 billion and core EPS of 29.1p, according to Thomson Reuters I/B/E/S Estimates. Core earnings exclude some non-cash charges.
Andrew Witty has been expanding the organisation to decrease dependence on “white pills in Western markets,” the area of the business most defenceless to generic competition and price cuts which are being implemented by cash-strapped governments.
GSK are now over the worst of their patents losses, although there doubt as to when their top-selling lung drug, Advair, will face generic competition. Some analysts have also questioned whether follow-on medicine Relovair can fill the gap, after it showed diverse results in recent clinical trials.