GlaxoSmithKline posts second-quarter loss on legal charges

GlaxoSmithKline reported Wednesday a second-quarter loss of 304 million pounds ($462.7 million), down from a profit of 1.4 billion pounds ($2.1 billion) in the same period last year, as the company recorded a previously disclosed legal charge of 1.6 billion pounds ($2.4 billion) related to Avandia, Paxil, and other claims. The company posted flat pharmaceutical sales of 5.8 billion pounds ($8.8 billion).

CEO Andrew Witty noted that "sales were impacted by several individual factors and adverse prior year comparisons," including "an acceleration" of generic competition to Valtrex in the US and temporary suspension of Rotarix. Sales for the quarter rose 4 percent to 7 billion pounds ($10.7 billion).

US pharmaceutical sales fell 17 percent to 1.9 billion pounds ($2.9 billion), which was partly due to a 26-percent drop in sales of Avandia to 152 million pounds ($231 million). Emerging markets sales were up 17 percent to 848 million pounds ($1.3 billion), while the Asia Pacific/Japan region saw revenue increase 9 percent to 727 million pounds ($1.1 billion). European sales also increased slightly by 1 percent to 1.6 billion pounds ($2.4 billion), but Witty warned there would be continued downward pricing pressure in the region, perhaps trimming 3 percent from prices over the next 18 months.

Combined quarterly sales of Seretide/Advair were flat at 1.3 billion pounds ($2 billion), and Valtrex sales dropped 59 percent to 165 million pounds ($251 million). Sales of Avodart climbed 14 percent to 157 million pounds ($240 million) and revenue from Lovaza increased by almost a third to 138 million pounds ($211 million). The company also reported that vaccine sales increased 17 percent to 939 million pounds ($1.4 billion), with second quarter revenue from influenza A (H1N1) pandemic vaccines more than doubling to 275 million pounds ($418 million), but sales of Cervarix fell 33 percent to 50 million pounds ($76 million).

With regards to the company's pipeline, Witty commented that the drugmaker decided "to progress five new assets into Phase III development," including two oncology agents for the treatment of melanoma, and potential HIV and Duchenne muscular dystrophy compounds. These include an HIV integrase inhibitor being developed with Shionogi as part of the company's joint ViiV Healthcare venture with Pfizer. The CEO said the drugmaker is also progressing a vaccine for the prevention of shingles, however, Witty indicated that preliminary data from the company's “new generation flu” programme failed to demonstrate sufficient additional efficacy.

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