LONDON (AP) — GlaxoSmithKline
reported a 3.5 percent drop in third-quarter earnings today due to generic
competition and a European ban on its diabetes drug Avandia, which was also
restricted in the United States.
For the three months ending Sept. 30, GSK reported a net profit of 1.29
billion pounds ($2.03 billion), compared to 1.34 billion pounds a year earlier.
Revenue rose 0.8 percent to 6.8 billion pounds on a reported basis, but were up
2 percent when not counting shifts in currency values.
The company raised its third-quarter dividend by 7 percent to 16 pence.
GSK shares, however, were down 1.6 percent at 1,272 pence following the
report.
In September, European regulators ordered Avandia off the market and the U.S.
Food and Drug Administration placed stringent restrictions on its use in the
United States, in both cases because of a heightened risk of heart attack
associated with the drug.
GSK booked a one-time charge of 147 million pounds related to Avandia,
including the expected return of 65 million pounds worth of the product. GSK
says future global sales of its once-blockbuster drug will be minimal.
The Avandia rulings and generic competition for Valtrex herpes medication
drove GSK sales down 8 percent in the United States and 9 percent in Europe, the
company said.
In the United States, GSK reported a 32 percent increase in vaccine sales, a
34 percent rise for cancer drugs and a 20 percent boost for Lovaza, its fish oil
pill to control triglyceride fats in the blood.
Chief Executive Andrew Whitty said the group estimated that third-quarter
revenue was reduced by 2 percent because of U.S. health care reform and European
government spending cuts.
