GlaxoSmithKline turnover knocked but profit bounces back after legal charge

SALES at GlaxoSmithKline fell four per cent in the second quarter, but the decline was slower than in previous quarters and profits were markedly higher than a year ago, when Britain’s biggest drugmaker took a huge legal charge.

The company also said yesterday that an experimental drug for hepatitis C had produced positive results in clinical tests.

Chief executive Andrew Witty reiterated his confidence that GSK would return to sales growth in 2012, as it emerges from a run of drug patent losses ahead of its main rivals.

GSK has been working its way through a revenue trough, reflecting sharp declines in sales of diabetes pill Avandia and herpes drug Valtrex, as well as the absence of last year’s windfall sales of vaccines and drugs for swine flu.

Quarterly sales of £6.72bn were broadly in line with analyst expectations and compared well with declines of ten per cent and 11 per cent in the preceding quarters. Quarterly earnings, as expected, were sharply up on 2010, due to the absence of last year's £1.6bn legal charge to settle litigation over Avandia’s links to heart risks and other problems.

Sales excluding pandemic flu products, Avandia and Valtrex increased by five per cent. Glaxo shares rose 0.7 per cent yesterday.