UK drug giant GlaxoSmithKline has reported an 8% rise (at constant exchange rates) in profit to £7.9 billion for the full year 2007, with earnings per share climbing 10% to 99.1 pence per share, excluding restructuring charges of £338 million.

The group’s sales inched up just 2% to £22.7 billion, with pharmaceutical sales staying level at £19.2 billion, as strong performances by some of its key products countered mounting generic competition and a substantial drop in sales of its diabetes blockbuster Avandia (rosiglitazone) due to safety concerns over the drug.

Regionally, sales of its pharmaceuticals in the USA fell 3% to £9.3 billion, due to a substantial decline in Avandia turnover and generic competition to Flonase, Wellbutrin XL, Zofran and Coreg IR. In Europe revenues grew 2% to £5.7 billion, with good performances from Seretide, vaccines and newer products offsetting the impact of generic competition and continued pricing pressures.

Globally, sales of the Avandia franchise dipped 22% to £1.2 billion; the allergy drug Flonase/Flixonase (fluticasone) dropped 34% to £199 million; the Wellbutrin (bupropion) range of antidepressants fell 37% to £529 million; and the heart disease drug Coreg (carvedilol) was down 18% to £587 million.

On the up side, turnover of Seretide/Advair (salmeterol/fluticasone propionate) for asthma jumped 10% to £3.5 billion; Lamictal (lamotrigine), for the treatment of epilepsy and bipolar disorder, grew 18% to £1.1 billion; sales of Valtrex (valaciclovir), for herpes, rose 18% to £934 million; and Requip (ropinirole), for Parkinson’s disease/restless legs syndrome, grew 36% to £346 million.

Newly launched products also helped to boost sales, with Tykerb/Tyverb (lapatinib), for breast cancer, generating £51 million; Veramyst/Avamys (fluticasone furoate), for allergic rhinitis, bringing in £21 million; and Altabax/Altargo (retapamulin), a first in class antibacterial for treatment of skin infections, recording initial sales of £11 million.

Q4 sales flat
For the fourth quarter, operating profit climbed 14% to £1.9 billion as flat turnover growth was overcome by lower SG&A and R&D costs and higher other operating income. Pharmaceutical sales in the US turnover fell 8% to £2.3 billion, masking growth of 4% to almost £1.6 billion in Europe and 6% to £1.2 billion in international markets.

Commenting on GSK’s performance and outlook, its chief executive, said: “Despite a significant setback on Avandia, good sales performance from other areas of our broad portfolio enabled GSK to deliver 10% EPS growth in 2007 – at the high end of our guidance”.

“The decline in Avandia sales, together with increased generic competition in the USA, will adversely impact our earnings in 2008, but looking ahead we remain confident in GSK’s future.”

In 2008, the company expects a mid-single digit percentage decline in business performance EPS, at constant exchange rates.

More details to follow next week from our correspondant at GSK's results presentation in London