GlaxoSmithKline PLC saw first-quarter profits slide 30% on
Wednesday, a week after it announced a series of
multibillion-dollar asset swaps with Novartis AG to bolster its
consumer health and vaccines businesses.
Sales at the U.K. drug maker fell 14% to GBP5.61 billion, from
GBP6.47 billion in the same quarter of the previous year. Sales
were dented by currency movements against a strengthening pound,
wholesalers and retailers destocking Glaxo's asthma drugs after
stocking up the previous quarter, and the exclusion of Glaxo's
best-selling drug--the asthma treatment Advair--from U.S.
prescribing lists in January.
Profit attributable to shareholders fell 30% to GBP668 million
in the first quarter, from GBP961 million in the same quarter of
the previous year. Profits were boosted in the same quarter of 2013
by one-off royalty payments, and have been dented by asset
disposals.
Core earnings per share--a measure which excludes legal costs,
asset impairments, profits on asset disposals and restructuring
costs--fell to 21 pence from 26.9 pence in the same quarter of the
previous year, in line with analyst expectations.
The deals signed with Novartis last week, worth more than $20
billion in total, will see Glaxo sell its high-margin cancer drug
business to its Swiss rival and bulk up its own businesses in
consumer health and vaccines, both lower-margin businesses but with
more reliable cash-flows.
Write to Hester Plumridge at Hester.Plumridge@wsj.com
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