First-quarter sales of GlaxoSmithKline's prescription drugs fall 4 percent

GlaxoSmithKline said Wednesday that first-quarter revenue from prescription drugs slipped 4 percent year-over-year to 4 billion pounds ($5.6 billion), hit by currency effects and lower sales of Seretide/Advair, Ventolin and established medicines. The company's overall sales in the three-month period fell 2 percent to 7.2 billion pounds ($10 billion), broadly in line with analyst estimates, as profit declined 48 percent to 549 million pounds ($766 million).  

CEO Emma Walmsley indicated that in the quarter, there was "sales growth on a [constant exchange rate] basis across all three businesses," noting that there were "encouraging starts for our most recent new product launches, Shingrix, Trelegy and Juluca."  

In the quarter, sales of vaccines rose 7 percent year-over-year to 1.2 billion pounds ($1.7 billion), with Shingrix, which was approved last month in Europe and Japan, generating revenue of 110 million pounds ($153 million). Analysts had anticipated sales of 35 million pounds ($48.8 million) for the three-month period. Walmsley said that sales of Shingrix were "very encouraging," although she noted that some of the revenue represented supplying necessary stock into the market.

Concerning other segments, sales of GlaxoSmithKline's respiratory portfolio dropped 6 percent year-over-year to 1.6 billion pounds ($2.2 billion), with revenue in the US slumping 14 percent to 662 million pounds ($923 million). Quarterly sales of established pharmaceuticals fell 10 percent to 1.3 billion pounds ($1.8 billion), mainly due to generic competition to Avodart in Europe and Coreg CR in the US. Additionally, sales of the company's HIV therapies improved by 6 percent to about 1 billion pounds ($1.4 billion), with revenue from Triumeq up 12 percent to 606 million pounds ($845 million) and sales of Tivicay lifting 15 percent to 348 million pounds ($485 million).

Meanwhile, sales in GlaxoSmithKline's consumer healthcare business dropped 3 percent to 2 billion pounds ($2.8 billion). Last month, the drugmaker agreed to purchase Novartis' stake in the companies' consumer healthcare joint venture for $13 billion, shortly after withdrawing from the process relating to the potential purchase of Pfizer's consumer healthcare business

For the current year, the company reiterated prior guidance that if no substitutable generic competitor to Advair is introduced in the US, earnings per share are predicted to grow between 4 percent and 7 percent on a constant exchange rate basis. GlaxoSmithKline warned that it has "seen increased pricing and competitive pressures in the US inhaled respiratory market in the first quarter," and now expects sales of Advair in the country to decline by around 30 percent. The drugmaker reaffirmed that if a substitutable generic competitor to Advair is launched mid-year in the US, full-year revenue from Advair will be about 750 million pounds ($1 billion), with earnings per share flat to down 3 percent.

The FDA is expected to decide whether to approve Mylan's proposed generic version of Advair in June after rejecting the therapy last year. Meanwhile, Novartis acknowledged that it is unlikely to launch a generic version of the drug this year after the FDA issued a complete response letter to its filing in February. Last month, the FDA upheld its previous decision to reject Hikma Pharmaceuticals' application seeking approval of a generic version of Advair and directed the company to complete an additional study.

Commenting on potential acquisitions, Walmsley said that GlaxoSmithKline's focus was on deals to acquire early-stage experimental drugs that would help rebuild its drug pipeline. The executive added that the company had no interest in buying Shire, which recently reached a preliminary deal to be bought by Takeda.

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