Oct. 28 (Bloomberg) -- GlaxoSmithKline Plc said third- quarter profit rose 30 percent after currency gains and orders for the Relenza flu drug boosted revenue. Vaccine sales declined because of a “phasing” of shipments including swine flu shots.

Net income increased to 1.34 billion pounds ($2.18 billion) from 1.03 billion pounds a year earlier, London-based Glaxo said in a statement today. Earnings excluding some items rose to 28.5 a share from 25.2 pence, beating the 28.1-pence mean estimate from 18 analysts surveyed by Bloomberg.

The pound weakened against the dollar, increasing the value of Glaxo’s U.S. sales. Revenue advanced 15 percent to 6.76 billion pounds, beating the 6.75 billion-pound mean estimate of 19 analysts. Sales of Relenza more than doubled to 182 million pounds as governments expanded their stockpiles of flu-fighting treatments amid a pandemic that has killed more than 5,000 worldwide since April. Vaccine revenue fell 2 percent.

“After 11 straight quarters of declining sales growth, it’s good to see sales growth is positive,” Royal Bank of Scotland analyst Michael Leacock said in an interview. “I’m a bit cautious though because of the one-off nature of swine flu products, and I recognize 2010 will be challenging because of the loss of Valtrex,” an antiviral medicine that faces generic threats as soon as the fourth quarter, he said.

Glaxo fell 5.5 pence, or 0.4 percent, to 1,251 pence in London trading, taking this year’s decline to 2.6 percent. The stock is the worst performer among Europe’s five biggest drugmakers in 2009.

Acquisitions

Chief Executive Officer Andrew Witty has made at least a dozen licensing deals or acquisitions since taking over in May 2008 to make up for revenue lost to generic versions of drugs, including Lamictal for epilepsy and the Imitrex migraine pill. Witty has called 2009 a “year of two halves,” saying the worst of Glaxo’s patent expiries are over and sales of swine flu treatments will shore up second-half revenue.

The $2.9 billion purchase of Stiefel in July contributed more than 100 million pounds to sales. The acquisition also helped increase sales, general and administrative costs, Glaxo said.

The pound declined from an average of $1.89 in the third quarter of last year to $1.64 this year. While third-quarter revenue was also boosted by more government orders for Relenza, sales in the U.S. were curtailed by generic versions of Imitrex, Lamictal, antidepressants Wellbutrin and Paxil CR, and Requip for restless legs.

Emerging Markets

Emerging market sales rose 25 percent in the quarter, and consumer product sales increased 8 percent.

The vaccine business is “not growing so much in this quarter” due to uneven order and shipping patterns, Witty said on a conference call. Sales of Rotarix for diarrhea caused by rotavirus and Boostrix for tetanus, diphtheria and whooping cough rose, while competition hurt revenue from vaccines against hepatitis and childhood diseases. U.S. sales of Glaxo’s seasonal flu vaccine, Fluarix, also declined.

The fourth quarter will see “very significant” growth in vaccines, helped by Cervarix to prevent cervical cancer, the swine flu vaccine, and Rotarix, he said.

Yesterday, Glaxo and partner Genmab A/S won U.S. clearance for their Arzerra leukemia treatment, while Glaxo’s Cervarix vaccine was approved in the U.S. on Oct. 16 to prevent cervical cancer in females ages 10 to 25.

Glaxo’s earnings per share excluded costs of a reorganization program, expanded in February, aimed at saving 1.7 billion pounds a year by 2011. Glaxo has slashed about 10,000 jobs since October 2007.

To contact the reporters on this story: Trista Kelley in London at tkelley2@bloomberg.net

Last Updated: October 28, 2009 13:06 EDT