GlaxoSmithKline (GSK), which completed Novartis transaction on March 2, 2015, has posted lower net profit of £352 million only during the first quarter ended March 2016 as against £8,038 million in the corresponding period of last year. This is basically due to income of £8,712 million in the first quarter of last year from Novartis transaction as against expenditure of £460 million in the March 2016 quarter.
After Novartis transaction, the Q1 2016 reported results include three months of sales of the vaccines and consumer healthcare products acquired from Novartis and exclude the former GSK oncology business.
GSK's net sales for the first quarter ended March 2016 increased by 10.8 per cent to £6,229 million from £5,622 million in the same period of last year. Its pharmaceutical sales declined by one per cent to £3,586 million from £3,521 million. Vaccines sales increased by 23 per cent to £882 million from £699 million and that of consumer healthcare improved by 26 per cent to £1,761 million from £1,383 million. Worldwide HIV sales increased by 57 per cent to £729 million.
Its overall US sales improved by 9 per cent to £2,074 million during the quarter under review despite decline of 12 per cent in pharma sales to £946 million. Lower pharma sales in US is basically due to generic competition to Avodart and Lovaza which declined by 87 per cent and 57 per cent respectively. Further, sales of Advair declined by 19 per cent to £339 million in US.
Its overall sales in Europe went up by 14 per cent to £1,818 million and that in other international markets moved up by 4 per cent to £2,337 million. Its R&D expenditure declined to £815 million from £867 million. The pharmaceutical sales in Europe declined by 14 per cent to £714 million due to declined in sales of Seretide by 24 per cent to £226 million.
GSK's pharmaceuticals sales in other international market declined by 3 per cent to £1,197 million. Its sales in emerging market declined by 4 per cent due to further declines in the China business which declined by 28 per cent. Excluding China, emerging markets grew by 5 per cent.
Sir Andrew Witty, CEO, said, “This strong first quarter performance demonstrates the momentum we have across the Group driven by growth in sales of our new products, effective cost control and execution of our restructuring and integration plans. We also continue to see good progress in novel assets in our core R&D therapy areas. The group has declared a dividend of 19 pence for the quarter. We continue to expect to pay a full year dividend of 80 pence for 2016 and for 2017.”
GSK's sales of new products were £821 million, more than double the same period last year. New pharmaceutical product sales now represent 20 per cent of total pharma sales. “Together with the roll out of our new commercial model, we believe the Group is well placed to maximise the opportunities, and respond to the competitive pressures and challenging pricing dynamics, that we see in the global healthcare environment.” Witty added.