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GSK still waiting for new respiratory drugs to lift off

But still posts strong growth thanks to HIV drugs and vaccines

GlaxoSmithKline (GSK) managed to post solid growth in the third quarter, but it was not its new suite of respiratory drugs that drove the increase.

GSK reported sales growth of 11% to £6.1bn ($9.4bn) - thanks to a strong showing from its HIV drugs, consumer healthcare division and vaccines - which helped to offset a 19% fall in sales of flagship asthma and chronic obstructive pulmonary disease (COPD)  drug  Seretide/Advair (salmeterol/fluticasone propionate)  to £794m.

Pricing pressure on Advair in the US continued to take its toll, while the brand is facing increasing competition from other respiratory combinations that will only be exacerbated as generics of GSK's drug reach the market in the next couple of years.

The top-line growth exceeded expectations, but there are lingering concerns about the slow growth of new respiratory drugs Revlar/Breo (vilanterol/fluticasone furoate) and Anoro (vilanterol/umeclidinium bromide), which together brought in £88m in the quarter.

GSK said Breo and Anoro are building "some momentum", with sales of both drugs more than double those achieved the same quarter of 2014. The growth is however nowhere near enough to compensate for the $1.65bn reduction in Advair sales since its peak in 2013, although in Europe the two managed to offset a third of the decline in the third quarter.

Meanwhile, GSK's hopes of accelerating Breo's growth on the back of the large-scale SUMMIT trial were undermined when it failed to show a survival benefit for the drug in COPD, although chief executive Sir Andrew Witty said that so far those results have had no adverse effect on its take-up.

Thankfully for GSK, the slow uptake of the new respiratory drugs was overshadowed by buoyant growth for its HIV unit ViiV Healthcare, particularly Tivicay (dolutegravir) and Triumeq (abacavir/dolutegravir/lamivudine) which romped away in the third quarter to bring in £157m and £211m respectively.

The vaccines business also did well with sales up 32% to £1.18bn, in the wake of GSK's acquisition of Novartis' vaccines portfolio, while consumer health rose 55% to £1.58bn.

"This quarter's performance reflects continued execution of our strategy," said Sir Andrew. "We remain focused on delivering sustained improvements in operational performance and are confident in our outlook for the rest of this year and a return to earnings growth in 2016."

The company is holding an R&D event this week to highlight progress with its pipeline.

Article by
Phil Taylor

2nd November 2015

From: Sales



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