GSK revenues sink as pain in Europe drags

 
City A.M. Reporter
GLAXOSMITHKLINE sales fell a bigger-than-expected eight per cent in the third quarter, hurt by continued pressure on drug prices in austerity-hit Europe and lower demand for some vaccines.

GSK, like its rivals, has suffered a string of patent expiries in recent years and is struggling to grow sales, even though it has come through the so-called patent cliff earlier than others.

The results, released yesterday, marked the fourth consecutive quarter in which Britain’s biggest drugmaker missed expectations.

European prices fell seven per cent, after an unprecedented eight per cent fall in the second quarter.

Chief executive Andrew Witty said he was now reviewing operations in the region. Plans for reshaping the business may come with full-year results early next year. Witty said he saw no reprieve in Europe “in the next quarter or two” and warned governments the industry could not sustain such poor returns forever.

Sales of £6.53bn generated core earnings per share (EPS) down 13 per cent at 26.5p in the quarter. Analysts, on average, had forecast sales of £6.67bn.

Witty is diversifying GSK to cut reliance on “white pills in Western markets”, the part of the business most vulnerable to price cuts and generic competition. The strategy involves a push into both emerging markets and non-prescription consumer health