GlaxoSmithKline has posted first-quarter results which have disappointed analysts and led to a near 3% fall in the UK major's share price.
Net income was down 13.1% to £1.33 billion, while group turnover inched up 1% to £6.64 billion. Pharmaceutical sales were up 2% to £4.55 billion, hit in part to pricing pressures in Europe and the emerging markets (notably Russia and Turkey) and ongoing instability in the Middle East/Africa region, where sales fell 6% to £267 million.
In terms of products, Advair/Seretide (salmeterol and fluticasone) for asthma and chronic obstructive pulmonary disease, was again GSK's top-seller, up 2% to £1.25 billion. The Avodart (dutasteride) franchise, for the treatment of benign prostatic hyperplasia, increased 11% to £186 million, while Lamictal (lamotrigine) for seizures and bipolar disorder, grew 29% to £148 million.
There were also strong performances from heart drug Lovaza (omega-3-acid ethyl esters), up 17% to £151 million and asthma inhaler Ventolin (albuterol), which brought in £155 million (+6%). However, the bloodthinner Arixtra (fondaparinux) fell 34% to £48 million as a result of generic competition in the USA, while copycat versions of Valtrex (valaciclovir) sent the herpes treatment down 32% to £63 million.
As for new products, Benlysta (belimumab), the first new drug for lupus in 50 years and partnered with Human Genome Sciences, which rejected GSK's takeover bid of $2.60 billion last week, had sales of just £9 million. Promacta/Revolade (eltrombopag) for immune thrombocytopenia contributed £27 million, while the sarcoma drug Votrient (pazopanib) was up 100% to £33 million.
Chief executive Sir Andrew Witty was satidifeid with the results, given "continued economic pressure and political instability in many markets and several demanding comparators with Q1 last year". He was particularly pleased with China (+27% to £163 million) and Latin America pharmaceuticals (+11% to £197 million), saying "we remain confident in the long-term growth prospects of this business and continue to invest behind our objective to grow ahead of the market".
Sir Andrew confirmed a 6% first-quarter dividend rise to 17p and total share repurchases of £2-2.5 billion. He added that "our focus on disciplined use of cash" is reflected in the bid to buy HGS, saying the offer represents "a really full, compelling premium". He went on to say "we know this company probably better than anybody else, except the people who run HGS today" and therefore "we have no need or interest in doing any due diligence".