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GSK sees sales drop but respiratory remains a bright spot

Profit also down in Q1 as Europe and US remain challenging for pharma and vaccines

GSK GlaxoSmithKline house

Tough market conditions pushed GlaxoSmithKline's sales and profits down in the first three months of the year. 

Turnover fell 2 per cent year on year in the first quarter of 2013 to £6.5bn and pre-tax profit dropped to £1.41bn.

Pharma and vaccines sales were down 6 per cent in the US on the same period, primarily because of the loss of sales of Vesicare following the conclusion of a co-promotion agreement in the first quarter of 2012. 

Revenue from cancer treatments did well, up 24 per cent to £88m, with Votrient sales more than doubling to £33m, although generic competition for Lamictal (sales of which fell 75 per cent to £66m) put a dent in the figures.

Europe remained difficult, with pharma and vaccine sales falling 3 per cent to £1.3bn, in the main because of austerity-influenced price reductions, with Seretide down 2 per cent to £370m. 

Chief executive Sir Andrew Witty warned: “The commercial environment in Europe remains challenging and unpredictable, and we continue to be cautious about the outlook here.”

The picture was no rosier in Japan in the first three months of the year, with combined pharma and vaccines revenue down 8 per cent to £447m, even though pharma sales actually grew by 12 per cent.

Vaccines sales in Japan - down 88 per cent - suffered heavily by year-on-year in comparison with the same period last year, a time when Cervarix was being used in the final stages of the country's HPV vaccination programme. 

On the plus side, sales of pharma and vaccines in emerging markets were stronger, with China a particular highlight, up 19% to £199m and the Middle East and Africa region posting a rise of 15 per cent to £302m.

And respiratory sales overall were a bright spot, up 6 per cent to £1.9bn, with strong growth in all regions apart from Europe. 

Seretide/Advair sales rose 4 per cent to £1bn, Flixotide/Flovent sales increased 7 per cent to £213m, and Xyzal sales grew 64% to £52m. 

Turnover at ViiV Healthcare fell 5 per cent to £318m but the company emphasised that its group reorganisation, announced in February, was on track to deliver annual savings of £1bn by 2016.

“In the short term, the benefits of our restructuring programmes are not only helping to offset some of the margin pressure we are seeing due to the changing shape of our business but also are supporting the investment behind our continuing preparations for the launch of the pipeline,” Sir Andrew added.

25th April 2013

From: Sales

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