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LONDON (Alliance News) - Drugmaker GlaxoSmithKline PLC on Wednesday reported a drop in first quarter earnings and warned on the negative impact of currency movements on the remainder part of the year.
Shares in Glaxo were down 1.6% at 1,439.20 pence following the update.
For the three months to the end of March, revenue declined 2% to GBP7.22 billion from GBP7.38 billion a year before. Pretax profit fell to GBP1.11 billion from GBP1.55 billion year-on-year.
In Pharmaceuticals, revenue fell 4% at actual exchange rates to GBP4.01 billion, while Vaccines saw turnover rise 7% to GBP1.24 billion and Consumer Health down 3% to GBP1.98 billion.
At constant exchange rates, Pharmaceuticals grew 2%, Vaccines up 13% and consumer Healthcare up 2%.
Pharmaceuticals was helped by "continued strong growth" in HIV sales and growth from Nucala and the Ellipta portfolio, including the first full quarter of sales of Trelegy, Glaxo said, adding that the growth was was partly offset by lower sales of Seretide/Advair, Ventolin and Established Pharmaceuticals.
Overall Respiratory sales declined 6% at actual exchange rates, but were flat at constant currencies.
Vaccines sales were driven by Shingrix in the US as well as increased demand for Bexsero and Hepatitis vaccines. Consumer Healthcare saw strong performances from "power brands" in the Pain relief and Oral health categories as well as cold & flu seasonal brands, though the division was impacted by generic competition to Transderm Scop in the US.
By geography, US sales declined 4%, but grew 7% at constant currencies. Europe sales grew 2% at actual exchange rates but were flat at constant currencies, while International sales declined 4% at actual rates but grew 4% at constant currencies.
Sales in Emerging Markets declined 4% at actual exchange rates but grew 4% at constant exchange rates.
Glaxo said it expects to make "continued progress" in 2018, although its expectation for adjusted earnings per share growth is impacted by a "number of factors" including uncertainties related to potential generic competition to Advair in the US.
In the event that no generic competitor to Advair is introduced to the US market in 2018, Glaxo said it continues to expect 2018 earnings per share growth of 4% to 7% at constant exchange rates.
Turning to currency, Glaxo said if exchange rates hold at the closing rates on March 31 for the rest of the year, the estimated hit to sterling turnover growth would be around 5%.
"If exchange gains or losses were recognised at the same level as in 2017, the estimated negative impact on 2018 Sterling Adjusted EPS growth would be around 8%," Glaxo added.
Glaxo declared a 19p dividend for the quarter, and continues to target an 80p dividend for the full-year.
