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Swine flu vaccine drives up GlaxoSmithKline’s earnings

City A.M. Reporter
BUMPER sales of swine flu vaccine boosted GlaxoSmithKline’s first-quarter earnings by 17 per cent, more than expected, and the drugmaker reassured investors it could absorb the cost of US healthcare reform.

Pre-tax profit was £2.23bn, earnings before major restructuring rose 17 per cent to 30.7p per share, while sales rose nine per cent to £7.36bn, comfortably beating forecasts.

Sales of pandemic H1N1 flu shots were £698m, ahead of analyst expectations of around £550m.

For the year as a whole, chief executive Andrew Witty said he expected sales would be in line with the £883m it posted in 2009.

The rest of 2010 will be tougher, as sales of H1N1 vaccines and flu drug Relenza wane and the group faces accelerating erosion in sales of antiviral Valtrex when multiple generics enter the US market.

But Witty said he was encouraged by underlying revenue growth of four per cent, excluding pandemic flu products.

Sales from conventional “white pills” in Western markets accounted for just 27 per cent of first-quarter sales, down from 32 per cent a year ago.