| GlaxoSmithKline profit up 66 Pct boosted by swine flu vaccine strong sales |
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04/02/2010 18:42 (845 Day 21:25 minutes ago) | |||||
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The FINANCIAL -- GlaxoSmithKline (NYSE: GSK) reported a 66 percent gain in fourth quarter profit, boosted by strong sales of swine flu vaccine and flu medicine.
The U.K.-based drug maker, whose results were also boosted by a GBP296 million gain from spinning off its HIV activities into a joint venture with Pfizer (PFE), said it will continue to reallocate resources to fast-growing activities, notably emerging markets, The Wall Street Journal reports.
"2009 saw GSK return to sales growth and I am confident of our prospects in 2010," Chief Executive Andrew Witty said, according to the same source. GlaxoSmithKline no longer provides a specific numerical outlook but Witty told reporters the company expects operating margin to remain stable in 2010 compared to 2009. Excluding legal costs and gains from the Pfizer HIV deal, operating margin was 33.7%. Witty said "headwinds" from generic competition to former big sellers are weakening.
Profit excluding some items rose to 35.4 pence a share in the quarter, beating the 33.5 pence average estimate of 16 analysts surveyed by Bloomberg. Net income was 1.63 billion pounds ($2.58 billion), compared with 982 million pounds a year ago, the London-based company said today in a statement, Bloomberg reports. Sales surged 17 percent to 8.09 billion pounds.
Glaxo said it aims to save 500 million pounds more by 2012 than in a previous cost-reduction program estimated at 1.7 billion pounds a year by 2011, according to the same source. The company will stop research in some neurological areas, including depression and pain, and will focus on Alzheimer’s disease, multiple sclerosis and Parkinson’s disease. Glaxo also will create a unit to develop medicines for rare diseases. “We are allocating capital to areas where we can get the best return on investment,” the company said in the statement.
The strong finish pushed full-year profits up 20 percent to 5.5 billion pounds, AP reports. Sales of Relenza, the company's drug for treating flu, totaled 720 million pounds for the year, compared to just 57 million pounds in 2008. In the fourth quarter, Relenza sales rose to 256 million pounds from 13 million pounds a year earlier.
Total vaccine sales were up 30 percent for the year to 3.7 billion, the company said, according to the same source. Glaxo did not break out sales figures for swine flu (H1H1) vaccine, but reported "substantial" sales in Europe in the fourth quarter. "I believe that GSK is now moving to a position where we can deliver our goal of long-term sustainable financial performance," said Chief Executive Andrew Witty. "2009 saw GSK return to sales growth and I am confident of our prospects in 2010."
Glaxo's CEO said he expects 2010 swine flu vaccine sales to be about the same as 2009, with the bulk of the orders expected in the first quarter, The Wall Street Journal reports. The company is paying a full-year dividend of 61 pence per share. At 1310 GMT Glaxo shares were trading up 1.6% at 1,236 pence, in a lower London market. The stock has lost 2.5% of its value over the past 12 months.
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