Generic losses outweigh pandemic pluses for GSK
pharmafile | July 23, 2009 | News story | Sales and Marketing |Â Â GSKÂ
GlaxoSmithKline has reported a 2% fall in sales for the second quarter as growing generic competition in the US bites.
Products hit by generic competition in the US included Lamictal, which saw sales drop 73% to £103 million, Imigran/Imitrex (down 65% to £68m) and Flonase, down 46% to £39m.
Sales in the Avandia diabetes franchise continued to fall, down 14%, as did revenues in its HIV franchise.
Total sales of HIV products were down 10% to £382m due to the declining use of older combinations such as Combivir and Trizivir. But GSK's newer medicine Epzicom/Kivexa grew 6% to £129m.
Turnover from the antidepressant Seroxat/Paxil (paroxetine) decreased 14% to £138m.
There was some good news from the company's portfolio, with sales of its flagship respiratory brand Seretide/Advair growing 9% in the quarter to £1.2 billion.
The drug's growth in the US (7%) and Europe (3%) looks to be slowing, but strong performance in emerging markets (up 17% to £73m) and in Japan (where sales more than doubled to £47m) will help maintain its rise.
Commenting on the generic onslaught affecting its US business, chief executive Andrew Witty said: "The outlook for our US business is improving; however, we are in the midst of a key period of transition for this business."
He highlighted that GSK has six products filed with the FDA and that 12 new products have been launched in the US since 2007.
He added: "The scale of change we are undertaking in the US is significant and I am confident that we are on the right path to maximise the opportunities of our new product portfolio and deliver long-term future growth."
Buoyed by pandemic defenses
Sales of antiviral Relenza shot up to £60m in the quarter (from £3m the same time last year) as governments around the world ordered supplies to counter the H1N1 pandemic.
GSK is also one of the companies working fast to develop a vaccine for the new flu strain, but its product will not be ready until the autumn.
The company is in discussions with more than 50 countries about its swine flu vaccine and has already agreed contracts for 195 million doses worldwide.
In the meantime, its vaccines division saw strong growth, rising 14% to £756m with growth in all regions.
Cervical cancer vaccine Cervarix more than doubled its sales to £73m, and rotavirus vaccine Rotarix grew 69% to £71m in the quarter. These contributions were partly offset by the decline in the Infanrix/Pediarix franchise (down 20% to £154m) due to growing competition in the market.
Total consumer healthcare sales grew 9% to £1.2bn with growth across all regions: Europe saw a 10% increase to £505m, the Rest of the World saw an increase of 11% to £406m and the US rose 3% to £254m.
Stiefel and other acquisitions
The period saw GSK acquire a number of business units in consumer health, developing markets and specialist areas. This reflects Andrew Witty's drive to diversify the company's business and exploit growth in new regions.
The most significant of these moves was the $3.6bn purchase of Stiefel, the world's largest private dermatological company.
GSK also announced an agreement to create a new specialist HIV business with Pfizer focusing on research, development and marketing of HIV medicines, in which GSK will hold an 85% share and Pfizer a 15% stake.
The company is also continuing its review of business structures and costs. Witty says GSK is now focusing on improving productivity and return on investment in its development organisation, and the chief executive has personally joined one of the teams involved in the project.
The company has 30 products in the late-stage pipeline, with seven new phase III programmes begun in the last 12 months.
Five compounds have been dropped of the period because of safety/efficacy doubts or insufficient commercial potential.
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