Asia and emerging markets boost GSK results

Asia and emerging markets boost GlaxoSmithKline results

GlaxoSmithKline has seen a jump in pharma sales due to major growth in Asian and other emerging markets.

Emerging markets – that include: Brazil, Russia, India and China, Poland, Vietnam and South Africa, accounted for 43% of pharma revenue with Asia Pacific/Japan pushing 45% growth on last year.

GSK’s H1N1 vaccine Pandemrix and flu treatment Relenza also contributed to sales growth. Excluding these products from the overall total, sales grew by a more modest 4% to £6.6 billion.

This is not set to last, however, as governments are already capping its H1N1 vaccine/treatments given the decline in global cases.

Asthma treatment Seretide/Advair remained the biggest-seller at £1.26 billion, up 9% on last year. One of the biggest losers was the anti-viral Valtrex, dropping 46% to £176 million due to ongoing generic competition.

In Europe, the company saw sales rise a steady 16% rise but drop 1% in the US. Total sales were up 13% on last year’s tally. 

Impact of US health reform

The drop in the US was not as steep as 2009 when GSK lost 24% to the previous year. Chief executive Andrew Witty saw this as a positive step in the US market as the “balance within our portfolio between genericisation and new products begins to move in our favour”.

The cost of US health reform to pharma revenues has already been reflected by Lilly and J&J in their Q1 results. Witty said:  “[We welcome] the passage of healthcare reform in the USA this quarter. Clearly, the reform results in increased discounts for medicines particularly related to government programmes like Medicaid. In the first quarter we have been able to absorb this adverse financial impact and we expect to offset any further impact through continued operational performance.”

Witty added: “The transformation we have already instigated within our US business has been focused on ensuring that we are fit to compete in the environment created by this reform.”