Q1 pre-tax profits and sales fall at GSK
Will create a new Global Established Products portfolio
GlaxoSmithKline (GSK) reported pre-tax profits of £1.4bn, down from £1.9bn in the first quarter of 2013 on sales of £6.5bn, down from £6.6bn in the same period in 2012.
The UK pharmaceutical firm said it was creating a new Global Established Products portfolio, consisting of around 50 medicines with global sales of £3bn, including stomach acid treatments Tagamet and Zantac, Imitrex for migraine, and anti-nausea treatment Zofran.
Chief Executive Sir Andrew Witty said placing these so-called ‘tail’ products in a division that would report separately from January 2014 opened several options, but he declined to say whether the division might be sold off at a later date.
European Pharmaceuticals and Vaccines sales fell by 3% to £1.3m, mainly owing to price reductions, and the commercial environment in the region remains ‘challenging and unpredictable’. GSK said it continues to be cautious about the outlook across Europe.
In the US, the company saw further signs of improved performance. Reported Pharmaceuticals and Vaccines sales declined 6%, but excluding over-active bladder treatment Vesicare grew 5%. The improvement was primarily driven by strong performances from its respiratory business (+7%) and from new products including Promacta for treating low blood platelet counts and oncology product Votrient.
In Japan, Pharmaceuticals and Vaccines fell 8% as a 12% growth in Pharmaceuticals sales was more than offset by an 88% decline in Vaccines sales.
The company has already started to implement a major new change programme aimed at improving the competitiveness of its European business and also restructure its manufacturing and R&D businesses to simplify operation and release resources. The initial phases of these programmes ‘are progressing well’.
GSK is expecting a better performance going forward as its R&D pipeline starts to deliver.