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GSK back in profit for Q2

GlaxoSmithKline has recorded a net profit of £1.97bn in the pharmaceutical company's financial results for the second quarter of 2011 following a loss of £304m for the period in 2010 due to legal fees

GlaxoSmithKline (GSK) has recorded a net profit of £1.97bn in the pharmaceuitcal company's financial results for the second quarter of 2011.

The results follow a loss of £304m for the company during the same period of 2010 due to more than £1.5bn in legal fees related to diabetes drug Avandia (rosiglitazone) and antidepressant Paxil (paroxetine).

However, continued restrictions for Avandia's marketing in the US, and the withdrawal of the drug's approval in Europe, affected company sales, with revenue down 4 per cent to £6.72bn.

Declining demand for pandemic flu products also had a negative effect on GSK's sales.

In its report, GSK offered an 'underlying' sales performance, which excluded these products, as well as herpes treatment Valtrex (valacyclovir). The company explained these revised measures give a “clearer understanding” of the company's sales performance due to the size and nature of the loss of sales from these products during the past two years.

Excluding these items, total sales were up 5 per cent for the group during the second quarter of 2011 compared to the previous year.

Andrew Witty, CEO, GSK, said: "We have had a strong second quarter, with continued underlying sales growth, new product delivery, pipeline visibility and cash generation. This progress is very much in line with our expectations and it is clear that our strategy is delivering."

The company also emphasised cost cutting measures as part of future plans for the company, with its restructuring programme expected to deliver additional annual savings of £300m, bringing the total annual savings expected from the programme to £2.5bn a year by 2012.

26th July 2011

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