GlaxoSmithKline plc., has posted net loss of £492 million during the second quarter ended June 2016 as against net profit of £115 in the corresponding period of last year due to impact of significant Sterling currency adjustment to valuations of liabilities associated with consumer healthcare and HIV business. Its turnover increased by 10.9 per cent to £6,532 million from £5,888 million. R&D expenditure increased to £888 million from £812 million. With net loss, its EPS worked out to negative 9 pence as compared to positive 3.1 pence in the last period. Despite loss, GSK declared equity dividend of 19 pence for the quarter and expect to pay a full year dividend of 80 pence for 2016 and for 2017.
Sir Andrew Witty, CEO, said, “This second quarter’s performance reflects further strong execution of the Gorup’s strategy and our ability to allocate capital effectively across our three businesses to improve returns. Momentum across the Group is being driven by growth in new product sales, continued cost control and delivery of restructuring and transaction benefits. We have also made good progress in research and development, and in the second half of 2016, expect to complete key regulatory filings for Shingrix, Closed Triple, Benlysta SC and sirukumab”.
New pharmaceuticals and vaccines sales were more than £1 billion during June quarter, this compares to £446 million in the same quarter last year. HIV medicines continued to perform strongly and the growth in sale of new respiratory products is now more than offsetting declines in Seretide/Advair. Vaccine sales grew by 11 per cent in the quarter.
For the first half ended June 2016, GSK’s revenues increased by 10.9 per cent to £12,761 million from £11,510 million. It reported net loss of £140 million as against a net profit of £8,153 million due to major restructuring of pharma business and integration of the Novartis vaccines and consumer healthcare businesses. Costs for these major restructuring programmes are expected to reduce significantly in 2017 with only residual charges thereafter.
Pharmaceuticals turnover declined by one per cent to £7,468 million, but adjusting for the disposal of the oncology business to Novartis, it moved up by 4 per cent. HIV sales grew by 50 per cent. Total respiratory sales declined by one per cent primarily reflecting a 25 per cent decline in Seretide in Europe.
Its US pharmaceutical sales declined by 7 per cent to £2,113 million due to generic competition to Avodart and Lovaza. Relenza sales declined by 98 per cent and that of Avodart by 60 per cent and Lovaza by 60 per cent during first half ended June 2016. Its sales in Europe declined by 11 per cent to £1,401 million due to lower sales of Seretide which declined by 25 per cent. International pharmaceutical sales declined by 6 per cent to £2,360 million. Similarly, its sales in emerging markets declined by 7 per cent due lower business in China by 21 per cent. Chinese sales declined due to ongoing reshaping programme and broader healthcare reforms, including price reductions. Its sales in Japan declined by 7 per cent to £662 million impacted by biennial price revisions as well as supply interruptions to Avodart.
Its vaccines sales grew by 16 per cent to £1,842 million. Vaccines sales in US improved by 5 per cent to £520 million and that in Europe moved up by 28 per cent to £664 million. In International market, vaccines sales improved by 15 per cent to £658 million.