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LONDON (Alliance News) - GlaxoSmithKline PLC Wednesday posted a drop in pretax profit for 2014, hit by lower revenue for asthma and chronic obstrucitve pulmonary disease treatment Advair, although it promised a GBP4 billion return to shareholders from its transaction with Novartis AG.
It also said it was continuing to evaluate the possibility of an initial public offering for a minority stake in its HIV joint venture ViiV Healthcare.
Glaxo posted a pretax profit of GBP2.97 billion for the three months to end-December, compared with GBP6.65 billion in 2013, as revenue fell to GBP23.01 billion from GBP26.51 billion. For its fourth quarter it posted a pretax profit of GBP531 million, down from GBP2.55 billion in the previous year.
Sales of Advair were down 25% in the US for the full year, including a 27% fall in the fourth quarter.
It posted core earnings per share of 95.4 pence at constant currency, compared with 112.2 pence in 2013. It had previously guided that its 2014 core earnings per share would be broadly similar to 2013 at constant currencies.
The pharmaceutical giant proposed a total dividend of 80 pence, up from 78 pence, and said it expects to maintain its dividend for 2015 at the same level. It also announced plans to return GBP4 billion of net proceeds from its transaction with Novartis to shareholders in 2015.
Glaxo expects the headwinds it faced in 2014 to continue into the first half of 2015, although it expects a stronger performance during the second half.
The company expects Advair sales to continue to decline in 2015 given the sustained price pressure in the US and Europe, and generic competition in Europe.
Earlier Wednesday Sky News reported that the company has appointed banks as financial advisers on its HIV medicines joint venture ViiV Healthcare, fueling the prospect that the company will float the division. Glaxo owns 78% of the joint venture, with the remainder held by Pfizer Inc and Shionogi & Co.
Shares in the company are trading up 2.9% at 1,494.50 pence Wednesday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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