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* Too early to quantify sales hit in China from bribery case
* CEO remains highly committed to China, will still invest
* Considering adopting more tiered pricing in China
* Q2 sales 6.62 bln pounds vs consensus 6.60 bln
* Q2 EPS 26.3 pence vs consensus 26.2p
By Ben Hirschler
LONDON, July 24 (Reuters) - A "shameful" corruption scandalin China will inevitably impact GlaxoSmithKline's business, the British drugmaker's chief executive said onWednesday, adding he was ready to go to Beijing "at the rightmoment".
In his first public comments since the crisis broke afortnight ago, Andrew Witty said head office had had noknowledge of the alleged bribery, which GSK believes involvedsenior Chinese staff working around its systems.
"The alleged activities are not what we expect of our peopleand are totally contrary to our values," Witty told reporters ashe presented the company's second-quarter results.
"Clearly, we are likely to see some impact to ourperformance in China as a result of the current investigation,but it is too early to quantify the extent of this."
GSK's reputation has been damaged and its management team inChina left in disarray by Chinese police allegations that itfunnelled up to 3 billion yuan ($489 million) to travel agenciesto facilitate bribes to doctors and officials.
China's official news agency Xinhua suggested on Wednesdaythat more foreign and local pharmaceutical firms could soon beimplicated in the corruption scandal sweeping the industry.
GSK has admitted that some Chinese executives appeared tohave broken the law and says it plans to change its businessmodel to lower the cost of medicines in the country.
Witty said this could include adopting more tiered pricingof medicines in China - an approach designed to make drugs moreaffordable in poorer countries. It is a model that GSK has usedin other developing regions, including Africa.
Despite the problems, Witty stressed he remained committedto China and saw it as a key country for further investments.
China is an important growth market for GSK and other largedrugmakers, which are relying on the middle classes in emergingmarkets to buy more of their products as sales in Westerncountries falter due to patent losses and government cutbacks.
GSK's sales in China, where it employs more than 7,000, rose14 percent in the second quarter to 212 million pounds ($326million).
The bribery scandal suggests business in China is going toget tougher, especially if Beijing succeeds in driving down thepremium prices enjoyed by Western firms.
WORLDWIDE SALES UP 2 PERCENT
In the latest quarter, GSK's worldwide sales rose a modest 2percent to 6.62 billion pounds, generating core earnings pershare (EPS) up 1 percent at 26.3 pence.
That was marginally better than the market had expected,given that Britain's biggest drugmaker has been struggling togrow in recent quarters due to loss of patent protection on someof its medicines and falling prices in austerity-hit Europe.
Analysts, on average, had forecast sales of 6.60 billionpounds and core EPS, which excludes certain items, of 26.2p,according to Thomson Reuters.
The company reiterated that it expected sales growth for theyear to be around 1 percent in local currency terms, with EPSrising by between 3 and 4 percent.
It also repeated that it planned to buy back between 1billion and 2 billion pounds of shares in 2013.
GSK has been investing heavily in China in recent years andnow has five factories and a research centre in the country.
Ensuring compliance with global standards, however, has notbeen easy. Sources familiar with the matter have said GSKconducts up to 20 internal audits of its Chinese operations eachyear, many of which find problems.
The head of GSK's research centre in China was sacked inJune due to misrepresentation of data in a scientific study andtwo years earlier deficiencies were identified at the Shanghaifacility, which GSK says have now been fixed.
