Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

It's been a long road back to growth for GlaxoSmithKline. 

The sales decline of its blockbuster respiratory drug Advair due to patent loss and price pressure has been faster and rougher than expected. Advair sales last year were down more than $2.5 billion from the drug's peak in 2013. That has overshadowed Glaxo's ambitious attempt to create a more balanced pharma conglomerate by swapping its cancer drugs with Novartis for that company's vaccines and a majority stake in a bigger consumer unit in 2015.  

That is, perhaps, until this quarter.

The company announced Wednesday it had produced its first core (meaning some costs excluded) EPS growth since 2013 in the latest quarter and that sales were up 6 percent from a year ago, excluding lost sales from those swapped cancer drugs. Glaxo is still digging out of a large, purple-diskus-shaped hole. The company is moving on next year from Andrew Witty, the CEO who came up with the firm's unusual strategy of de-emphasizing expensive branded drugs. But he's leaving a steadied ship that might even have a bit of momentum.

It's a Start
Glaxo reported core EPS growth for the first time in years; now it just needs to keep it up.
Bloomberg Intelligence
Note: Core EPS excludes certain costs

The good results are a psychological boost for the firm, which wants investors to focus on something, anything, other than Advair's decline. For the full year, the company says it expects core EPS to grow 10 to 12 percent, ahead of analyst expectations. Shares were up as much as 2.3 percent on Wednesday. 

Comeback On?
Glaxo shares have gone nowhere over five years as its big blockbuster has declined. But a big business reform and some growth from new drugs may start to turn that around.
Source: Bloomberg

Behind this growth? In part, newer drugs, which made up a fifth of Glaxo's pharma revenue in the quarter. The company's rapidly growing HIV drugs Triumeq and Tivicay, part of a joint venture with Pfizer and Shionogi, did particularly well. Glaxo projects that its respiratory business will finally return to growth in 2016 after years of decline, buoyed by sales of newer treatments. 

Making Up
Glaxo's new drugs are starting to stem the bleeding from the continued decline of its blockbuster, Advair
Source: Blooomberg

If you look hard, you can find a glimmer of justification for the company's conglomerate strategy; 14 percent pro-forma growth from the vaccine business helped prop up a shaky quarter from the respiratory business. 

Still, Advair isn't done declining. Sales fell 19 percent in the quarter from a year ago, even more than analysts expected. Though Glaxo touted the growth of its new drugs, its biggest selling new respiratory drug, Breo Ellipta, missed analyst sales expectations. That will need to improve. The company's new respiratory drugs may end up narrowly offsetting Advair's decline, but they will almost certainly never fully replace what it was. 

After years of high-profile and highly expensive failures, such as the heart drug darapladib and its MAGE-A3 cancer vaccine, it's hard to find a drug in Glaxo's pipeline that seems like a safe bet to drive significant growth any time soon. Things like a newly approved severe asthma drug, a shingles vaccine, and an anti-arthritis drug in the pipeline all have potential. But going by analyst expectations, finding a blockbuster anywhere in Glaxo, outside of its HIV treatments, is a stretch. 

The company may have turned a corner. But growth off a badly eroded base is one thing. Figuring out a way to outperform the industry -- its stock is just about flat over the past five years, while a Bloomberg Intelligence index of its peers is up 60 percent -- will be the difficult job of Witty's successor. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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Mark Gongloff at