GlaxoSmithKline has posted a 19% increase in fourth-quarter operating profits to £1.70 billion on the back of healthy pharmaceutical sales growth in the USA for a number of its key products such as respiratory drug Advair and Avandia for diabetes.
Group revenues were up 9% at constant exchange rates to £5.96 billion, while pharmaceutical sales increased 8% to £5.14 billion.
Advair/Seretide (salmeterol and fluticasone) for asthma and chronic obstructive pulmonary disease grew 9% to £862 million in the quarter, and GSK noted that positive new data from the TORCH trial, a COPD mortality study which was recently filed with regulators, which observers believe will give a lift to the product's sales.
Avandia (rosiglitazone) advanced 25% to £324 million, and the firm believes that its DREAM data, published in September which indicated that the drug can reduce the risk of progression to type 2 diabetes, plus results from the recent ADOPT trial, which showed that Avandia is more effective than metformin or a sulphonylurea in long-term blood sugar control, will advance the treatment’s cause as competition begins from DPP-IV inhibitors Galvus (vildagliptin) from Novartis and Merck & Co's Januvia (sitagliptin).
GSK’s vaccine sales also performed strongly, rising 31% to £527 million, driven by Infanrix/Pediarix for children, up 29% to £136 million, and healthy showings from the flu vaccine Fluarix/FluLaval, Rotarix for rotavirus and Boostrix for prevention of diphtheria, tetanus and whooping cough.
Sales of Lamictal (lamotrigine) for epilepsy were up 23% to £257 million in the quarter, helped by a new indication, to treat primary generalised tonic-clonic seizures, while heart disease drug Coreg (carvedilol) increased 39% to £199 million. Valtrex (valaciclovir) for herpes infections also performed well with a 23% rise in sales to £212 million.
Speaking at GSK’s results presentation in London, chief executive Jean-Pierre Garnier said that the numbers were impressive as they reveal sustained growth across the firm’s wide-ranging portfolios. He was also enthusiastic about the group’s pipeline, noting that five major new products are scheduled for launch this year. Including these, GSK has “over 30 significant product opportunities” in Phase III development or registration, he noted.
The results went down well with the investment community and GSK’s guidance for 2007 of earnings per share growth of 8%-10% was higher than most analysts expected. Navid Malik at Collins Stewart, who said he will be upgrading its EPS estimate of 4% growth, noted that the company is performing well across the board (GSK’s consumer healthcare division showed “surprisingly good growth” with sales up 6% to over £3 billion) and went on to praise the firm’s R&D efforts.
He said the pipeline is on track for a number of major new launches “following an intense development programme put in place in recent years” and the analysts expect strong growth especially from Tykerb (lapatinib) for breast cancer and the vaccine Cervarix for the prevention of cervical cancer. Mr Malik also noted that the “significant delivery from the pipeline” is “driven by new chemical entities and not product line extensions!”