GlaxoSmithKline was the toast of the FTSE 100 yesterday as the drug giant posted an impressive set of first-quarter figures that led to a 6.4% rise in its share price to £13.20.
Turnover was up 4% to to £5.04 million, while pretax profits leapt 17% to £1.71 billion pounds, driven by strong performance for pharmaceuticals, up 6% to £4.3 billion.
Leading the way was GSK’s asthma treatment Seretide/Advair (salmeterol and fluticasone), sales of which were up 22% to £690 million, while Avandia (rosiglitazone) and Avandamet (rosiglitazone and metformin) for diabetes rose 25% to £287 million.
Other strong performers included Lamictal (lamotrigine) for epilepsy/bipolar disorder, which climbed 30% to £195 million, Valtrex (valaciclovir) for herpes, up 28% to £164 million, and Coreg (carvedilol) for heart disease, revenues from which climbed 50% to £135 million. GSK’s HIV franchise and vaccines contributed £363 million (+6%) and £248 million (+3%) respectively to GSK’s coffers.
What was particularly pleasing for the firm was that the performance of the aforementioned drugs has offset problems in other areas, especially its antidepressants. Generic competition battered sales of Wellbutrin SR (bupropion) and the disruption to the supply of Paxil (paroxetine) [[21/03/05b]]. Excluding these factors, GSK’s US sales climbed 13% to £2.1 billion.
Chief Executive Jean-Pierre Garnier said the firm is “now entering a new phase of growth...as the impact of generic competition diminishes and the underlying strength of our business shows through.” Thanks in particular to Advair and Avandia, “GSK’s future is bright and in 2005 we are on track to deliver our guidance of EPS growth in the low double-digit range,” he added.
Though GlaxoSmithKline’s first-quarter financials impressed the stock exchanges, what excited analysts most was the news that its antidepressant Paxil CR (paroxetine) and diabetes drug Avandamet
(rosiglitazone and metformin) could be back on the market much sooner than expected [[29/04/05c]]. GSK has lost about £200 million in revenues since the problem surfaced but the firm will be breathing a huge sigh of the relief that the deal has been done and the FDA has not hit it with a huge fine. Analysts were pleased too and Smith Barney upgraded the stock to a ‘buy ‘ rating from ‘hold,’ citing the “very benign consent decree with the FDA.”
Noting that this would appear to draw a line under the Cidra manufacturing issues,” the broker admitted that “ “our concerns that the impact would result in altered guidance were misplaced.”