GlaxoSmithKline plc (GSK), the second largest pharmaceutical company in the world, has suffered setback during the year ended December 2007 mainly due to lower sales in US of Avandia and generic competition to Flonase, Wellbutrin XL, Zofran and Core IR. The company's net profit declined by 3.4 per cent to £5,310 million from £5,498 million in the previous year. Its sales also went down by 2.2 per cent to £22,716 million from £23,225 million. The pharmaceutical sales declined by 4.2 per cent to £19,233 million from £23,225 million.

Commenting on performance, JP Garnier, CEO, said, "Despite a significant setback on Avandia, good sales performance from other areas of our broad portfolio enabled GSK to deliver 10 per cent EPS growth in 2007 - at the high end of our guidance. The decline in Avandia sales, together with increased generic competition in the USA, will adversely impact our earnings in 2008, but looking ahead we remain confident in GSK;s future. Our fast-growing vaccines business, the resurgence of our consumer healthcare division and the strong performance of many key pharmaceutical products are all providing contributions to growth. The momentum of our late-stage pipeline continues to enhance our business and is producing a significant renewal of our product line - last year GSK received a record 10 product approvals and this year expects regulatory decisions on more than 10 new product opportunities".

The pharmaceutical sales in US declined by 3 per cent to £9,273 million. And that in Europe moved up by 2 per cent to £5.7 billion, with good performance from Seretide, vaccines and newer products offsetting the impact of generic competition and continued pricing pressure from European governments. Turnover in International was £4.3 billion, up by 6 per cent with good growth reported in Japan.

The sales of Seretide/Advair, for asthma and COPD, rose nine per cent to £1.9 billion in the USA. The company continues to see increased use of Seretide/Advair in the treatment of COPD and is in ongoing discussions with the FDA to expand the indication for use in this patient group, including assessment of data supporting a claim for reduction of exacerbations.

Vaccine sales grew strongly across all regions with US sales up by 44 per cent for the year 2007 to £628 million, sales in Europe up by 14 per cent to £814 million and sales in international markets up by 8 per cent to £551 million. The sales of hepatitis vaccines in US increased by 33 per cent to £199 million