Glaxo earnings triple despite China investigation
FROM INQUIRER WIRE SERVICES
POSTED: Thursday, February 6, 2014, 1:08 AMLONDON – GlaxoSmithKline Plc. said Wednesday that fourth-quarter earnings nearly tripled and sales rose 5 percent even as an ongoing investigation hurt business in China.
Net income rose to 2.5 billion pounds ($4.1 billion) from 848 million pounds a year earlier, thanks partly to profits on the sale of some businesses. Sales grew, particularly in India, despite a 29 percent drop in China for pharmaceuticals and vaccines.
The British company, with operations in Philadelphia and the region, has been hit by allegations by the Chinese government that four of its employees bribed doctors and hospitals to prescribe medications.
Chief executive Andrew Witty said Wednesday that the company was making fundamental changes to its business, including how it interacts with customers.
The company said in December that it would stop paying doctors to promote its products at speaking engagements and scrap individual sales targets.
Glaxo won approval of two new lung drugs, Breo and Anoro, last year. The company’s top-selling product, Advair for smokers’ cough and asthma, is facing increasing competition from a newly approved generic in Europe and cheaper options in the United States. Glaxo has received “excellent” reaction from physicians to Breo, which is now is covered by 25 percent of Medicare prescription-drug plans in the U.S., Witty said.
“I’m delighted with the progress we’ve made,” Witty told reporters in London. “The demise of GSK Respiratory has often been exaggerated.”
Glaxo won approval for four other new products last year, for skin cancer, HIV and influenza. Albiglutide for Type 2 diabetes was recommended for approval by the European Union’s drug regulator last month, and the company expects data from six late-stage clinical trials this year. Glaxo also plans to start the last phase of human testing for about 10 medicines this year and next.
Fourth-quarter revenue increased 2 percent to 6.91 billion pounds, beating the average estimate of 6.84 billion pounds.
Pharmaceutical and vaccine sales in China were down 18 percent in the fourth quarter, led by declining sales of treatments for respiratory diseases and hepatitis, after a 61 percent plunge in the previous quarter as the company faces the bribery probe.