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GSK sales fall for first quarter of 2011

First quarter revenue for GlaxoSmithKline has dropped by 10 per cent, with the company continuing to be affected by marketing restrictions for diabetes drug Avandia

GlaxoSmithKline (GSK) has recorded total revenue for the first quarter of 2011 of £6.59bn – a drop of 10 per cent from the same period last year.

The company said the decrease in sales was mainly due to a fall in demand for its pandemic flu products; generic competition for herpes treatment Valtrex (valaciclovir); and increased restrictions in the EU and US for diabetes treatment Avandia (rosiglitazone) following concerns over the drugs role in increasing the risk of cardiovascular disorders.

Revenue for these three product areas came to £140m for the first three months of 2011 compared with £1.13bn for the same period in 2010.

Despite the loss in revenue, net profit for the company was up, increasing from £1.40bn to £1.58bn.

This increase in income was helped by the company's decision to sell its shareholding in Quest Diagnostics, as well as its remaining commercial interests in cold-sore treatment Zovirax (acyclovir) in North America.

Strong sales performances in emerging markets (an increase of 23 per cent) and Japan (an increase of 53 per cent) were other positives for the company.

Company restructuring and future developments were central themes in a statement from GSK CEO, Andrew Witty, accompanying the release of the results: “One of our key goals is to increase returns on investment in R&D and we have made fundamental changes within the organisation to achieve this. Our continued progress in both pipeline delivery and cost reduction supports our belief that we can achieve this objective.”

Recent approvals for GSK include lupus drug Benlysta (belimumab), Horizant (gabapentin enacarbil) for Restless Legs Syndrome and epilepsy treatment Trobalt (retigabine).

The company also recently announced it is to sell off several over-the-counter brands, including weight-management drug Alli, as part of efforts to streamline its Consumer Healthcare business.

28th April 2011

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