GlaxoSmithKline has reported a disappointing set of financials for 2007 and predictions of an earnings decrease for this year have led to a 7.6% share decline but the company is confident about its long-term prospects.

As PharmaTimes UK News reported yesterday, the company posted operating profits of £7.93 billion, an increase of 8% (but up just 2% in sterling terms), while turnover was actually down 2% in pounds at £22.72 billion. This was primarily caused by falling sales of Avandia (rosiglitazone) and discussion about controversial diabetes drug took up much of GSK’s annual press conference in London.

US sales of Avandia for the fourth quarter slumped 55% to £130 million as the effects of the now-notorious meta-analysis which made claims about the cardiovascular risks associated with the drug lingered. Chief executive Jean-Pierre Garnier acknowledged that “we took a big hit”, saying that “the shadow of Avandia will continue over 2008”, but put up a stout defence of the drug.

Specifically, Dr Garnier said that the scientific data that continues to come out about Avandia shows that the drug is effective, a point consistently supported by declarations from the US Food and Drug Administration and other regulatory agencies. He also noted the recent data from the ACCORD trial which found no link between rosiglitazone with an unexpected increased risk of death in intensively-managed diabetes patients.

Take time to restore Avandia to former glory
He added that “we are getting more of the truth” concerning the benefits and safety profile of Avandia as more data is released and Chris Viehbacher, president of GSK’s US pharmaceuticals unit noted that the sales increases of Takeda’s thiazolidinedione Actos (pioglitazone) shows that “physicians have not lost face in the class”. Dr Garnier added that the firm will try to “restore Avandia to its previous glory” but this could take some time.

Aside from Avandia, generic competition has battered sales of the allergy drug Flonase/Flixonase (fluticasone), the Wellbutrin (bupropion) range of antidepressants and the heart disease drug Coreg (carvedilol). This year the antidepressant Paxil CR (paroxetine), the migraine treatment Imitrex (sumatriptan and Requip (ropinirole), for Parkinson’s disease/restless legs syndrome, will all suffer a similar fate.

However Dr Garnier was philosophical about the problem, noting that while most of its competitors will especially struggle with patent expiries in 2009 and 2010, GSK is suffering from the generic threat now. The important thing is how to deal with it and the company pointed out that its pipeline is looking the healthiest in the business both in numerical and quality terms. Seven products were launched last year, notably the breast cancer drug Tykerb (lapatinib), but up to 18 other products could hit the market over the next two years.

Andrew Witty, who will take over as chief executive when Dr Garnier steps down in May, noted that the pipeline is full of genuinely innovative treatments, saying these new products “are not line extensions, not tweaks".