GSK returns to growth

GlaxoSmithKline's sales returned to growth in the third quarter as Britain's biggest drugmaker put patent expiries and a collapse in revenue from troubled diabetes pill Avandia behind it.

GSK is emerging from a revenue trough caused by a slump in sales of Avandia due to heart risks and loss of patent cover on herpes drug Valtrex, as well as the absence of last year's windfall sales of vaccines and drugs for swine flu.

It now has a smaller burden of near-term patent expiries than most of its global rivals although uncertainty remains about when its top-selling inhaled lung drug Advair will face generic competition.

GSK said earlier this year it now expects to report actual sales growth on a full-year basis in 2012, accompanied by an expansion in profit margins, and Chief Executive Andrew Witty said Wednesday the group was on track to achieve this goal.

Turnover in the quarter was up four per cent from the same period a year ago at £7.1bn and the company made a pre-tax profit before major restructuring of 2 billion, equivalent to earnings per share (EPS) up one per cent at 28.5 pence.

GSK also increased its expectation for share buybacks this year to up to £2.3bn and raised the quarterly dividend six per cent to 17 pence a share, underscoring the stock's appeal to investors seeking yield.