GlaxoSmithKline has posted a fairly solid set of financials for the second quarter, despite earnings being hit hard by generic competition in the USA and major restructuring charges.

The company reported a 5% decline in operating profit, before restructuring charges of £186 million, to £2.20 billion, while group turnover was down 2% to £6.75 billion. Pharmaceutical sales fell 4% to £5.58 billion, with drug sales in the USA sinking 15% to £2.30 billion.

Generic competition across the Atlantic again tore into sales of Lamictal (lamotrigine), which fell 73% to £103 million and Imigran/Imitrex (sumatriptan), down 65% to £68 million. The antidepressant Wellbutrin (bupropion) slumped 72% to £30 million, reflecting the sale in May of the US rights to Wellbutrin XL in the USA to Biovail for $510 million.

The Avandia (rosiglitazone) diabetes franchise brought in £198 million, down 14%, while revenues from GSK’s HIV franchise fell 10% to £382 million. Turnover from the antidepressant Seroxat/Paxil (paroxetine) decreased 14% to £138 million.

On the positive side, sales of Advair/Seretide (salmeterol and fluticasone) for asthma and chronic obstructive pulmonary disease were up 9% at £1.25 million, while vaccine sales climbed 14% to £756 million. Cervarix sales doubled to £73 million.

Sales of flu drug Relenza (zanamivir) reached £60 million, up from just £3 million in the like, year-earlier period, reflecting “continued orders from governments across the world for pandemic stock-piling”. GSK chief executive Andrew Witty noted that by the end of 2009, “we now expect to have an annual production capacity of Relenza of 190 million treatment courses”, a more-than-threefold increase to GSK’s previously
announced maximum capacity.

He added that GSK has started production of an H1N1 adjuvanted vaccine and “to date we have contracts in place to supply 195 million doses of the vaccine. The company also has "a variety of agreements in place with the US government to supply pandemic products worth $250 million and discussions with over 50 governments “are ongoing, with many at advanced stages, and I therefore expect further significant orders”, Mr Witty said.

He added that the results “indicate a marked improvement on the first quarter and I expect this to continue in the second half of 2009 as the year-on-year comparative effect of US generic competition reduces and we see further sales contributions from new products and our influenza portfolio”.