GlaxoSmithKline, UK, the World's second largest pharmaceutical company, has suffered a setback during the year ended December 2008 mainly due to drop in sales of Avandia, CNS products and anti-virals products. Further, legal charges in the fourth quarter and significant US patent expiration put pressure on overall performance.
The company's net profit after minority interest declined by 11.7 per cent to £4,602 million from £5,214 million in the 2007. Its turnover improved to £24,352 million from £22,716 million in the previous year, representing a growth of 7.2 per cent. The pharmaceutical sales saw a growth of 6.4 per cent at £24,352 million as against £22,716 million.
With fall in profit, GSK's earning per share for the year ended December 2008 nosedived to 88.6 pence from 94.4 pence in the last year. The company increased dividend to 57 pence per share.
Andrew Witty, CEO, said, "2008 marked a turning point for GSK and those factors which impacted our performance, in particular declines in Avandia sales, are now starting to reduce. 2008 also saw the first steps towards a radical transformation of our business model. We enter 2009 with confidence and expect to make further good progress in implementing our strategic priorities that will enable us to meet our long-term objective of reducing risk and delivering sustainable growth to shareholders."
"The expansion of our restructuring programme, announced today, is a vital catalyst of this strategy. It will radically change GSK's business model and savings from this programme will be used to support our strategic priorities," Witty added.
Excluding genericised products, Avandia and pandemic products the remaining pharmaceuticals business delivered £16.4 billion in sales and grew by 10 per cent in constant exchange rate (CER) terms. The pharmaceutical sales in US declined by 11 per cent to £8,894 million and that in Europe and rest of the world improved by 3 per cent and 5 per cent respectively. Avandia product sales declined by 28 per cent to £1,191 million. The sales of Lamictal (CNS product) moved down by 22 per cent to £926 million and over sales of CNS products declined by 21 per cent to £2,897 million.
GSK launched 12 new products in 2008, which includes Promacta, Tyverb, Rotarix and Kinrix. The company has 10 key new products filed with regulators in the USA, Europe and Japan. It has a late-stage pipeline of around 30 products and it added 6 new products into its phase III pipeline. GSK has terminated 35 per cent of discovery projects following its therapy area rebalancing exercise and reviews by the new Drug Discovery Investment Board.