Glaxo Profit Falls on Divestments as Approvals Awaited

GlaxoSmithKline Plc (GSK), the U.K.’s largest drugmaker, said first-quarter profit fell 6 percent after losing revenue from several products it divested.

Earnings excluding some items fell to 1.93 billion pounds ($2.95 billion), or 26.9 pence a share, from a restated 2.05 billion pounds, or 26.9 pence, a year earlier, London-based Glaxo said in a statement today. That beat the 25.2-pence average of 14 analysts’ estimates compiled by Bloomberg.

Sales fell 3 percent to 6.47 billion pounds after Glaxo sold 17 over-the-counter products to Prestige Brand Holdings Inc. and after Astellas Pharma Inc. (4503) took over the promotion of the overactive bladder treatment VESIcare. Analysts had estimated revenue of 6.42 billion pounds.

Glaxo is counting on regulatory decisions on six drugs as it seeks to boost sales 1 percent this year and earnings per share by 3 percent to 4 percent.

Glaxo fell 0.3 percent to 1,673.50 pence as of 12:05 p.m. in London. The shares have returned 21 percent in the past year including reinvested dividends, compared with a 32 percent return for the Bloomberg Europe Pharmaceutical Index.

The company has filed for U.S. approval of the lung drugs Anoro and Breo Ellipta, dolutegravir for HIV, dabrafenib and trametinib for skin cancer, and albiglutide for Type 2 diabetes.

Advisers to the U.S. Food and Drug Administration recommended last week that Breo Ellipta be approved to treat chronic obstructive pulmonary disease, also known as smoker’s cough. Sales of the drug may reach 703 million pounds in 2020, according to Tim Anderson, an analyst at Sanford C. Bernstein & Co. The FDA’s decision on Breo is scheduled for May 12.

Priority Review

Dolutegravir will get a priority review by the FDA, with a decision expected Aug. 17, as it aims to challenge Gilead Sciences Inc., maker of the world’s best-selling AIDS medicine.

Results from late-stage studies of experimental treatments darapladib for heart disease and MAGE-A3, a cancer treatment, also will be released this year.

Glaxo has completed a review of its Lucozade and Ribena drink brands, and has decided to sell them, the company said today. The brands don’t fit with either the company’s health- care products business or its emerging-markets business, Chief Executive Officer Andrew Witty said in February.

If sold, the brands could generate as much as 2.5 billion pounds for Glaxo, according to analysts at Deutsche Bank AG.

To contact the reporter on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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