UK drug giant GlaxoSmithKline has turned in a pleasing set of results for the third quarter of 2005, as earnings per share growth of 16% to 21.3 pence beat general expectations, leading the firm to up its full-year guidance to mid-teens EPS growth.
Operating profit grew 14% to £1.7 billion, driven by strong overall growth in the group’s sales for the quarter, with pharmaceuticals up 11% in the USA, 9% in Europe and 8% internationally.
Product turnover jumped 10% to hit £4.7 billion for the period, once again driven by robust performances from its key offerings - the asthma drug Seretide/Advair (salmeterol and fluticasone) and the diabetes agent Avandia (rosiglitazone), as well as an impressive results from its vaccines franchise.
Sales of Seretide/Advair rose 20% to £737 million, lifted by a strong performance in both the US, up 20% to £417 million, and Europe, rising 17% to £246 million. Combined turnover of Avandia and Avandamet jumped 22% to £355 million, with growth of 21% to £265 million in the USA and soaring 44% to £40 million in Europe.
Other established and new products propelling growth include: Lamictal (lamotrigine), for epilepsy/biopolar disorder, up 20% to £210 million; Valtrex (valaciclovir) for herpes, rising 20% to £179 million; the heart disease therapy Coreg (carvedilol), increasing 39% to £154 million; Avodart (dutasteride) for enlarged prostate, rocketing 98% to £36 million; and the Parkinson’s disease agent Requip (adartrel), climbing 41% to £42 million after sales in the USA more than tripled following its approval for the treatment of restless legs syndrome [[19/09/05e]]. Requip also received a positive opinion in Europe for the treatment of RLS last month, and the group says that it expects to launch it in this territory during the first half of next year.
The group’s vaccines business grew 20% to £399 million for the period, with US sales rocketing 82% to £123 million, particularly strong on launches of Fluarix for protection against influenza and Boostrix, which bolsters protection against whooping cough to the routine booster administered to teenagers. European revenues were lifted by a 35% leap in turnover of Infanrix to £57 million, leading to an overall rise of 7% to £162 million.
Recent growing interest in flu, coupled with mounting enthusiasm over GSK’s cervical cancer vaccine Cervarix, has moved the group's vaccines business into the spot light. To this end, the firm has sunk around $2 billion to expand vaccine capacity, and GSK says it is developing an H5N1 prototype pandemic vaccine which should enter clinical trials in the near future with results in the second quarter of 2006.
Commenting on the GSK’s performance and outlook, chief executive JP Garnier said: "This quarter's performance shows the vitality of our business, which is again being driven by great performances from key products...GSK is facing the future with confidence - today we are raising our earnings guidance for 2005 and confirming that we will review our promising oncology portfolio at an R&D seminar in November."
Stock in GlaxoSmithKline, the world’s second-largest pharmaceutical group, has been on the rise again as confidence seems to be swelling on a developmental pipeline bursting at the seams which, according to industry experts, houses many potential blockbusters. Reflecting this, and investor enthusiasm on the financial results, shares closed up 2.3% at £14.70 on the London Stock Exchange on October 26.