GlaxoSmithKline plc has received setback during the first quarter ended March 2012 due to lower sales in Europe. Its net profit declined by 12.3 per cent to £1,390 million from £1,584 million in the same quarter of last year. Its turnover improved marginally by 0.8 per cent to £6,640 million from £6,585 million. With drop in net profit, its earnings per share declined to 26.7 pence from 30 pence in the last period.
Its US pharmaceuticals and vaccines business grew by 9 per cent £1,784 million from £1,616 million in the similar period of last year. Growth benefited from incremental revenue related to the conclusion of co-promotion agreement for Vesicare together with growth in Advair.
Its sales in Europe declined by 6 per cent to £1,295 million from £1,417 million as European markets remained challenging due to continued implementation of government austerity measures. The Emerging markets/Asia Pacific (EMAP) business also saw some pricing pressure and ongoing instability in the Middle East/Africa region. Japan pharmaceutical and vaccines turnover grew by 4 per cent with a strong contribution from Cervarix and an encouraging performance from number of new products including Lamictal, Avodart and Promacta. ViV Healthcare turnover declined by 5 per cent as the effect of recent launches of generic competitors in the US to Combivir and Epivir offset the growth of newer products.
Andrew Witty, CEO, said, “We remain mindful of the challenges we face given the current global political and economic environment, particularly in relation to pricing on our more established products. However, we also continue to see attractive growth opportunities across our businesses and we intend to continue to invest behind them to strengthen the breadth and mix of the Group and its future growth prospects.”
The year 2012 is a very important year for pipeline delivery and so far the performance has been encouraging. This year the company received a significant amount of positive data for five phase III assets for the treatment of HIV, cancer, diabetes and asthma. Andrew Witty added, “Increased visibility for these programmes, together with the progress we have made with the broader late stage pipeline since the beginning of 2011, underpins our growing confidence in our ability to grow sales on a sustainable basis.”