GSK sales fall 8% in Q3
GlaxoSmithKline reported an 8% loss in sales in the third quarter, largely due to continued pressure on drug prices in Europe and a lower demand for vaccines than there was this time last year. Total sales for Q3 came to £6.53 billion, slightly lower than the £6.67 billion total that analysts had expected.
However, despite this drop in sales, GSK pledges to continue further increases in dividend and share buybacks. The company’s plan is to “simplify operations and improve returns”, something which is represented in the recent re-structuring of ViiV Healthcare, to continue HIV drug development alongside Japanese Shionogi and Pfizer.
With regards to revenue, many of GSK’s businesses continued to perform strongly in this quarter. Consumer healthcare sales went up 5% and in EMAP, pharmaceutical and vaccine sales grew in all major markets – China by 15%, India by 9% and Latin America by 11%.
“As expected, reported sales performance this quarter of -5% was impacted by demanding prior year comparisons, product disposals and continuing weakness in the European environment for Pharmaceuticals and Vaccines. Excluding the prior year comparisons, related to sales of Cervarix in Japan and US flu vaccines (3 percentage points), and product disposals of OTC brands and Vesicare (2 percentage points), sales for the quarter were broadly in line with last year.
“Despite these challenges, we expect to see sales grow in the fourth quarter, in particular with further momentum in EMAP including anticipated completion of multiple pre-ordered vaccine tenders. On this basis, and absent a further deterioration in Europe, we now expect sales for the year to be broadly in line with 2011 on a constant currency basis.”
Sir Andrew Witty, Chief Executive Officer of GSK.
Looking towards the future, GSK is pleased with the “tremendous progress” with its pipeline, particularly with prescription drugs and experimental medicines, and hopes to continue this growth in 2013. The company is apparently still on track to file for approval with regulators for six new medicines this year and has the potential to win up to 15 new authorisations over the next three years.
GSK to raise dividend despite sales drop (Financial Times)
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