GSK reported a 3% fall in sales in 2014, to £23bn, following 'challenging' trading conditions, particularly in the US primary care market. Core operating profit was £6.6bn, 6% lower than in 2013 in constant exchange rate terms.
But there were signs of improvement in the company's respiratory business, which is expected to return to growth in 2016.
Chief Executive Sir Andrew Witty said the company was starting to see 'some early indications of how increased coverage and our new portfolio will help us regain market share and deliver improved performance in respiratory'.
Last week the company launched Incruse Ellipta for COPD and Arnuity Ellipta for asthma in the US. It also awaits FDA decisions on Breo Ellipta for use in asthma and mepolizumab for severe asthma.
Overall, pharmaceuticals and vaccine sales fell by 4% to £18.7bn. The US was the worst-hit region for this business segment, falling by 10% to £4.98bn, while in Europe sales were flat at £4.03bn. Sales in Emerging Markets grew by 5% to £3.2bn and by 1% (£937m) in Japan.
In the US, continued 'price and contracting pressures' affected respiratory sales, which were down 18%. Sales of Advair were down 25%.
Oncology products in the US contributed strongly in the year, with sales up 41% to £509m, benefiting from the strong performances of Votrient and Promacta, and the recent launches of Tafinlar and Mekinist. Benlysta sales grew 22% to £155m.
There was also strong growth in oncology products in Europe and the Avodart franchise, although this was offset by a 3% decline in the respiratory business. The newly launched Relvar Ellipta recorded sales of £18m in the year but this was more than offset by lower sales of Seretide, down 5% to £1.33bn, reflecting increasing competition and the transition of the Respiratory portfolio to the newer products, particularly in the latter part of the year. Oncology sales were up 29% to £417m, led by Votrient, Promacta and the newly launched Tafinlar.
Vaccines sales fell 2%, with lower sales of Infanrix, Cervarix and flu vaccines being only partly offset by sales growth in a number of other products, including Boostrix, which was up 26%.
Witty said the proposed three-way deal with Novartis, in which GSK will sell its portfolio of cancer drugs to Novartis and buy the Swiss company's global vaccines business (excluding flu vaccines), and the two companies will combine their consumer healthcare businesses in a joint venture majority controlled by GSK, is critical to the company's performance in 2015.
He said progress was being made towards the closure of the deal, with approval received from the US FTC 'on most aspects' and European clearance now granted, subject to 'certain divestments'.
Witty added that improved commercialisation of new products and the progression of its mid-stage R&D pipeline, plus the continuation of its pharmaceutical restructuring programme would also be crucial to GSK's success in 2015. He expects a stronger performance in the second half of this year.
