GlaxoSmithKline has ended a disappointing year with another set of mediocre figures for the fourth quarter but the drugs giant is hopeful it is on the right track.
Sales fell 8% to £6.19 billion, while core operating profit sank 12% to £1.89 billion, as GSK’s US respiratory business struggled again. Advair/Seretide (salmeterol and fluticasone) for asthma and chronic obstructive pulmonary disease, fell 18% (at constant exchange rates) to £1.12 billion, and down 27% in the USA.
Its new COPD drug Breo (fluticasone furoate/vilanterol) contributed just £15 million to GSK's coffers, while Anoro (umeclidinium bromide/vilanterol) managed £9 million. However, things appear to be looking up.
Chief executive Sir Andrew Witty said “the most important thing for us to get right in the short run is our respiratory business in the USA”. However, across the pond, “we have improved formulary positioning and coverage for Advair, albeit at lower price levels”, and also increased access to Breo and Anoro; respiratory is expected to return to growth in 2016.
Elsewhere, the sarcoma drug Votrient (pazopanib) reached £115 million, a leap of 32%. Promacta/Revolade (eltrombopag) for immune thrombocytopenia contributed £62 million, up 37%, while the melanoma drugs Tafinlar (dabrafenib) and Mekinist (trametinib) recorded sales of £43 million and £21 million, respectively. Vaccines sales fell 9% to £846 million.
ViiV sales leap 25%
A bright spot was the performance of HIV/AIDS unit ViiV, in which GSK holds an 80% stake (the rest being held by Pfizer and Shionogi). Sales were up 25% to £462 million, boosted by the integrase inhibitor Tivicay (dolutegravir) which brought in £109 million.
Sir Andrew said the three-part deal with Novartis, whereby GSK will sell its cancer unit and buy the Swiss major’s vaccine ops, with the firms forming a new consumer healthcare joint venture, will reshape the business and result in proceeds of £4 billion which will be returned to shareholders. A partial IPO of ViiV is also looking likely, given reports that Citigroup, Goldman Sachs and Morgan Stanley have been appointed to assess a possible spin-off.
Commenting on the results, Ana Nicholls, health analyst at the Economist Intelligence Unit, said that “with sales under pressure and a bribery case affecting its China business, it's little wonder GSK's share price has fallen”, although it rose after the results were unveiled. However she noted that respiratory drug prices “look to be firming nicely”, adding that the vaccines business looks promising.