GlaxoSmithKline below forecasts, as Avandia costs and demise pummel sales and lead to massive 4th-qtr 2010 loss

4 February 2011

UK pharma giant GlaxoSmithKline (LSE: GSK) reported fourth-quarter 2010 net loss of £690 million ($1.12 billion) compared with a profit of £1.63 billion after taking a previously-announced £2.17 billion charge for legal charges largely associated with its diabetes drug Avandia (rosiglitazone), sales of which have been suspended in Europe and severely curtailed in the USA (The Pharma Letter January 18).

Group sales for the three months came in at £7.2 billion, down 13% at constant exchange rates and 11% lower in sterling. Loss per share was 13.6 pence. Analysts had been expecting a loss of £290 million on sales of £7.17 billion.

For the full-year 2010, GSK saw sales dip 1% at CER to £28.39 billion, with legal charges of £4 billion and restructuring costs of £1.34 billion leading to earnings per share of just 53.9 pence, below consensus forecasts of 55.2 pence.

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