GlaxoSmithKline, plc., (GSK) has suffered a setback during the third quarter ended September 2007 mainly due to stiff generic competition in the USA and a decrease in Avandia sales. The net profit for the third quarter declined 5.6 per cent to £1,346 million from £1,426 million in the corresponding period of last year. The sales declined by 2.9 per cent to £5,476 million from £5,642 million as the pharmaceutical sales moved down by 5.6 per cent to £4,605 million from £4,876 million. With fall in profits, its earning per share for the quarter was marginally lowered at 23.7 pence as against 24.7 pence in the last period.
Commenting on the performance, JP Garnier, CEO, said, "GSK remains on track to meet its earnings guidance for the year, despite significant challenges. We continue to strengthen our product portfolio with 15 products launched, approved or filed so far this year, and we remain focused on delivering more from our late-stage pipeline. We are also increasing R&D investment in key areas of future growth, such as biopharmaceuticals, oncology, vaccines and neuroscience."
The company sales in US declined by 7 per cent to £2.2 billion, impacted by continued generic competition and a reduction in Avandia sales. In Europe its turnover was up by one per cent to £1.3 billion, with sales growth of vaccines and newer products offsetting generic competition to older products and further price cuts mandated by European governments. Sales in International were up by 9 per cent to £one billion with good growth seen in emerging markets including India and China.
Total sales of Seretide/Advair, for asthma and COPD, were up 7 per cent to £835 million. Vaccine sales increased by 49 per cent to £593 million basically due to higher demand in US for flu and hepatitis vaccines. Avandia product group, for the treatment of type II diabetes, sales declined by 38 per cent to £225 million. Further, sales of Zofran declined by 86 per cent to £32 million and that of Welbutrin XL declined by 41 per cent to £114 million.
GSK currently has 149 projects in clinical development comprising 89 NCEs, 37 PLEs and 23 vaccines. It has 33 key assets currently in phase III development or registration. The company signed three major in-licensing agreements.
For the nine months ended September 2007, GSK's net profit declined by 1.4 per cent to £4,234 million from £4,293 million in the similar period of last year. Its sales declined by 3 per cent to £16,742 million from £17,266 million. Pharmaceutical sales moved down by 5.1 per cent to £14,186 million. The earning per share remained almost same at 74.7 pence.