GlaxoSmithKline plc., (GSK) has suffered heavy setback during the fourth quarter ended December 2014 due to challenging trading conditions faced by the company particularly in the US primary care market. Its net profit declined sharply by 59.7 per cent to £1,025 million from £2,505 million in the corresponding period of last year. Its net sales also declined by 10.4 per cent to £6,186 million from £6,906 million due to lower sales by pharmaceutical and vaccines. Earnings per share went down to 21.5 pence from 51.3 pence in the last period.
Its pharmaceutical sales declined by 5 per cent and that of vaccines declined by 9 per cent during the quarter under review. However, the sales of consumer healthcare improved by 2 per cent to £1,116 million. The US pharmaceuticals and vaccines sales declined by over 10 per cent to £1,386 million with pharmaceutical down by 10 per cent and vaccines by 9 per cent. Pharmaceutical sales were impacted by continued price and contracting pressures, primarily affecting respiratory sales, which were down 20 per cent. Sales of Advair were down by 27 per cent. However, sales of oncology products in the US contributed strongly to the quarter with sale up by 45 per cent to £150 million.
For the full year ended December 2014, GSK's sales declined by 13.2 per cent to £23,006 million from £26,505 million in the previous year. Its net profit declined by 49.7 per cent to £2,831 million from £5,628 million. R&D expenditure declined by 12.1 per cent to £3,450 million from £3,923 million.
Its pharmaceutical sales declined by 5 per cent to £15,478 million mainly on account of lower sales in US by 10 per cent to £4,980 million. Similarly, Vaccines sales declined by one per cent to £3,192 million. Its sales in US declined by 11 per cent to £7,340 million and that in Europe went down by 2 per cent to £6,412 million. However, the sales in emerging markets improved by 4 per cent to £6,193 million. Japan sales declined by 3 per cent to £1,608 million.
The sales of respiratory segment declined by 10 per cent to £6,181 million and that of cardiovascular, metabolic and urology declined by 3 per cent to £965 million. Oncology sales went up sharply by 33 per cent to £1,202 million. Seretide/Advair sales were down by 15 per cent to £4,449 million. Flixotide/Flovent sales also declined by 6 per cent to £702 million. US oncology sales grew by 41 per cent to £509 million as the sales of Votrient increased by 32 per cent to £181 million.
Sir Andrew Witty, CEO, said, “We start 2015 focused on priorities critical to GSK's performance this year. These include completion of the proposed major 3-part transaction with Novartis, improved commercialisation of new products and progression of our mid-stage R&D pipeline., capitalising on product supply resumption in our Consumer business and execution of our pharmaceutical restructuring programme.”
“Some of the headwinds faced by the Group in 2014 will continue to adversely affect performance during 2015 with a greater impact in the first half of the year. However, with annualisation of these factors and successful execution of our priorities, we expect a stronger performance in the second half of the year. We continue to make good progress towards closure of the Novartis transaction.” Witty added.