GlaxcoSmithKline Plc, the second largest pharma company in the World, failed to improve its bottom line during the first half of 2007 on account of stiff competition in US generics market and adverse exchange rates. The net profit improved marginally by 0.7 per cent to British pound 2,888 million from pound 2,867 million in the corresponding period of last year. The company's turnover also declined by 3.1 per cent to pound 11,266 million from pound 11,624 million.
The pharmaceuticals sales declined by 4.8 per cent to pound 9,581 million in the first half ended June 2007 from pound 10,066 million in the similar period of last year. The pharmaceutical sales in US improved only by one per cent to pound 4,746 million due to fall in sales of Avandia products by 10 per cent to pound 520 million from pound 580 million. Similarly, GSK's sales of central nervous system (CNS) products declined by 9.1 per cent to pound 1,151 million from pound 1,267 million in the last period. Overall sales of CNS products declined by 3 per cent to pound 1,624 million from pound 1,814 million. The respiratory products sales improved only by 2.2 per cent to pound 2,484 million in the first half of 2006.
GSK is set to launch five key pharmaceutical products viz, Tykerb, for breast cancer, Coreg CR, for heart conditions, and Veramyst, for allergic rhinitis, Cervarix, for prevention of cervical cancer and Trexima for migraine in US and Australia.
In the US, vaccine sales rose by 27 per cent to pound 105 million. Sales growth was largely driven by continued good performance of Infarix/Pediarix, GSK's combination vaccines for children, and hepatitis vaccines. Its Over-the-counter (OTC) medicine sales grew by 29 per cent to pound 446 million.
Commenting on the performance and outlook, JP Garnier, CEO, said, "GSK has delivered a good earnings performance in a challenging quarter. Whilst some uncertainty remains around Avandia, we stand firm in our belief that it is an effective and valuable treatment for patients with diabetes. We continue to see very good progress across the rest of our portfolio with the successful launch of alli and five major pharmaceutical products already completed this year. This is strong evidence of our pipeline's momentum and its ability to create long-term value for GSK. We also continue to accelerate returns to shareholders and have today increased our share buy-back programme to pound 12 billion."