| CATEGORY: NEWS AND ANNOUNCEMENTS SECTOR: PHARMACEUTICALS & BIOTECHNOLOGY |
Glaxo earnings to fall as Avandia sales plummet |
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By Lee Wild
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Thu 07 Feb 2008
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LONDON (SHARECAST) - GlaxoSmithKline shocked its investors with a warning that earnings will fall in 2008 after sales of diabetes drug Avandia slumped last quarter.
Earnings dropped 1% last year, with falling sales of Avandia and increased generic competition in the US to impact on 2008 as well, the drugs giant said.
Full year sales of the type 2 diabetes drug tumbled 29% to £780m in the US, with fourth quarter sales plunging 55% to £130m.
The drug major is forecasting a mid-single digit percentage decline in business performance earnings per share (EPS) at constant exchange rates for the current year.
It said turnover for the 12 months ended 31 December 2007 dropped 2% to £22.72bn, while EPS of 94.4p missed analysts’ forecasts.
Total pharmaceutical turnover was unchanged at £19.2bn, but annual turnover in the US slipped 3% to £9.3bn and by 8% to £2.3bn in the fourth quarter.
Glaxo blamed the gloom on a “substantial” reduction in Avandia sales and generic competition to nasal spray Flonase, antidepressant Wellbutrin XL, nausea treatment Zofran and Coreg IR for high blood pressure.
“Despite a significant setback on Avandia, good sales performance from other areas of our broad portfolio enabled GSK to deliver 10% EPS growth in 2007 - at the high end of our guidance,” said chief executive JP Garnier.
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