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GlaxoSmithKline on a high
23/07/2003 22:23 - (SA)
London - Drug maker GlaxoSmithKline PLC posted a 13% rise in net profit for the second quarter and said on Wednesday it would achieve earnings growth in the high single-digits or better for the year.
GlaxoSmithKline sought to play down concerns about generic competition for its products, saying its annual earnings would shine regardless of whether generics swamped sales of its star performer anti-depressant Paxil.
The company reported net income of £1.36bn for the three months ending June 30, up from £1.20bn for the same period last year. Much of the improvement was due to cost cutting.
The weak dollar in recent months hurt sales, as the United States is GlaxoSmithKline's biggest market. Quarterly sales slipped by 0.7% to £5.38bn from £5.42bn.
GlaxoSmithKline's quarterly pretax profit rose to £1.88bn from £1.63bn and came in ahead of consensus forecasts of £1.8bn.
Company shares closed 33 pence higher on the London Stock Exchange at 1 208 pence per share.
Analysts said the company proved it could cope fairly well with generic competition to its key antibiotic Augmentin by switching customers over to newer versions of the drug. Newer drugs including Seretide for asthma and Avandia for diabetes boosted sales, with Seretide generating revenue of more than £500m during the quarter.
Augmentin lost ground to generic competition, though many customers switched to newer, extended-release and extra-strength versions of the drug.
"We're now starting the second half with trepidation," chief executive Jean-Pierre Garnier said, alluding to uncertainty about when Paxil will succumb to generic competition and when regulators will appove major new drugs. Paxil, which is called Seroxat outside the United States, could face generics next year if the company loses a US court case.
Garnier said he hopes to see the anti-impotence drug Levitra, developed by Germany's Bayer AG and marketed by GlaxoSmithKline, hit the market by the end of the year, along with anti-depressant Wellbutrin XL.
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