Announcing a smaller than expected two per cent fall in first quarter group sales, Glaxo also used its results to reveal the decision to divest Ribena and Lucozade, “subject to the realisation of appropriate value”.
Some analysts expect the sale to raise over £1bn, helping the UK’s largest drug-maker cope with falling European revenues as governments continue to drive down the price of treatments.
Sales in Europe dipped three per cent in quarter one, the results said.
“The commercial environment in Europe remains challenging and unpredictable, and we continue to be cautious about the outlook here,” chief executive Sir Andrew Witty said.
Yet the outlook is brighter elsewhere in the world, with Keith Bowman of Hargreaves Lansdown citing a four per cent hike in Glaxo’s US sales, allowing for adjustments.
And in its emerging markets and Asia Pacific region, sales grew by eight per cent.
“Successful innovation remains critical,” Bowman said. “A near 20 per cent upturn in the share price over the last quarter appears to evidence investors’ growing belief.”
Pre-tax profit came in at £1.41bn, down from a tough comparable of £1.86bn in the year-earlier period when Glaxo was boosted by over-the-counter products and an incontinence drug that have since been sold. The firm reiterated its faith in its pipeline, and maintains expectations of one per cent sales growth this year.