GSK falters in Q2 as austerity measures bite
pharmafile | July 25, 2012 | News story | Sales and Marketing | Benylsta, GSK, Q2, Seretide, Witty
GlaxoSmithKline posted a loss in its second quarter results, as pressure in mature markets continues to affect the firm.
Pharmaceutical and vaccine sales were down 3% compared to this time last year, with most of this loss coming from Western markets. Group turnover – which includes its consumer and OTC businesses – decreased 2%, down to £6.46 billion.
Sales declined by 8% in Europe for the quarter and by 6% in the US, as both recession-hit markets look to rein in healthcare costs. But this was partially offset by strong growth in the EMPAS region (+9%) and Japan (+6 per cent).
Sales of its biggest selling drug Seretide, licensed for respiratory conditions, were flat at £1.27 billion. Its second biggest selling treatment, the urogenital drug Avodart, saw healthy growth of 6%, up to £197 million for the quarter.
Its new lupus drug Benylsta, made in conjunction with recently acquired Human Genome Sciences, saw unremarkable sales of £12 million. The drug was only approved by the FDA in March, but its sluggish sales have so far disappointed analysts.
Sir Andrew Witty, GSK’s chief executive, gave an extended commentary of his firm’s results, but said he was confident that GSK would weather the strong head winds coming from Europe and the US.
But he has been forced to lower the firm’s 2012 outlook given the continuing economic pressure, and his assurance that GSK would return to growth this year may now be out of his hands.
On the positive side, Witty said that there could be as many as eight launches of new drugs and vaccines over the next two years in areas such as COPD, type II diabetes and HIV.
In particular, GSK hopes a new once-daily combination lung drug, known as Relvar, will eventually replace its ageing Seretide, which is taken twice a day.
The new drug was filed for approval earlier this month but industry analysts doubt it will replicate Seretide’s $8 billion annual sales, given mixed results in clinical trials.
He also made mention of the company’s recent $3 billion (£1.9 billion) fraud charge that it incurred earlier this month.
The firm’s reputation has taken a battering, but its share price barely flinched when the charge was announced, and GSK had already set aside the money needed to pay the fine last year, so there has been no impact in this quarter.
Ben Adams
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