GlaxoSmithKline sees flattish 2nd-qtr results, but sales helped by Advair

Global number two drugmaker GlaxoSmithKline beat analysts' consensus forecasts, despite posting lackluster results for the second quarter of 2007, against a background of the US dollar's weakness and ongoing controversy surrounding its diabetes drug Avandia/Avandamet (rosiglitazone; Marketletters passim) and in what its chief executive, Jean-Pierre Garnier ,called "a challenging quarter."

At constant exchange rates, group turnover increased 3% (down 2.4% in sterling terms) to L5.67 billion ($11.68 billion), with pretax profits rising 8% to L1.9 billion, net income up 10% to L1.36 billion and earnings per share advancing 11% (+3% in sterling) to 24.0 pence.

To some extent helped by GSK saying its share buyback program had increased to L12.0 billion, with completion expected over two years, and investors relieved that Avandia sales - which had fallen 22% to L349.0 million for the quarter - were not even worse, the market rewarded the firm's stock with a rise of nearly 4% on the day of the results, July 25. A US Food and Drug Administration advisory panel meeting was due to start deliberating on July 30 as to whether the type 2 diabetes agent should remain on the market.