GlaxoSmithKline beats forecasts with 3rd quarter2009 profits leaping 34%, despite generic competition

UK pharma giant GlaxoSmithKline reports that its third-quarter 2009 attributable profit rose to £1.34 billion ($2.19 billion), up 345 from £1.0 billion in the like period of last year. Net profit was $1.44 billion for the three months to September 30, up 11.6% compared to £1.29 billion a year ago.Sales increased 15% to 6.76 billion, from £5.88. Analysts had been expecting profit of £1.19 billion on sales of £6.76 billion, according to data compiled by Dow Jones Newswires. 

Earnings per share before major restructuring were 28.5 pence ' down 3% at constant exchange rate, but up 13% in sterling terms

Commenting on the results, the firm's chief executive, Andrew Witty, said: 'the dynamics of GSK's business are changing. We are seeing direct evidence of success in our strategy to grow and diversify the business away from a dependency on - white pill/western markets. Less than 30% of this quarter's sales were generated from these products and markets compared to 38% in the second quarter of 2008. This quarter's total sales were up 3%, marking a return to growth and reflecting the reallocation of resources to key investment areas: sales in Emerging Markets were up 25%; in Japan up 19% and in Consumer Healthcare up 8%. Sales in Emerging Markets now represent 14% of pharmaceutical turnover compared to 12% this time last year. Growth in these markets is being driven both organically, notably through Seretide (salmeterol and fluticasone), Augmentin (amoxicillin and clavulanate) and vaccines, and through newly acquired products, which contributed over £35 million this quarter.'

Relenza sparkles but vaccines sales down

Sales of flu vaccine Relenza were £182 million, reflecting continued orders from governments for pandemic stockpiling, said GSK. Other strong pharmaceutical performances included Avodart (dutasteride), +14% to £131 million, Lovaza (omega-3-acid ethyl esters) +27% to £111 million and Tykerb (lapatinib) +54% to £46 million). Also performing well for GSK was Advair/Seretide (salmeterol and fluticasone) for asthma and chronic obstructive pulmonary disease with sales up 5% at £1.15 million.

Vaccine sales declined 2% in the quarter to £802 million. Performance benefited from strong growth of Rotarix (+92% to £84 million) and Boostrix (+55% to £39 million) and from the start of Synflorix (sales of £13 million). These were offset, however, by sales declines of Infanrix/Pediarix (-10%) which continues to be impacted by increased competition in the DTPa segment in the USA, and lower sales of Hepatitis vaccines (-12%) which resulted from lower sales to the military and return of competitor supply in the USA. Sales of Fluarix/Flulaval declined 14% to £147 million primarily as a result of lower sales in the USA. Cervical cancer vaccine Cervarix sales at £28 million in the quarter were adversely impacted by the timing of tender shipments in Europe.

Generics bite into US sales