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LONDON (Alliance News) - GlaxoSmithKline PLC Wednesday said that it now expects to meet its target of GBP6 billion in revenue from new products up to two years earlier than it had previously guided, as it reported core earnings per share ahead of its financial guidance for 2015.
The pharmaceutical giant reported a pretax profit of GBP10.53 billion, significantly up from the GBP2.97 billion it reported a year as a result of an exceptional gain from its deal with Novartis AG, as it saw revenue of GBP23.92 billion, up from GBP23.00 billion a year before.
Revenue from the company's pharmaceuticals segment were down 7%, whilst Vaccines was up 19% and Consumer Healthcare was up 44% on the back of the company's three part deal with Novartis.
The fall in pharmaceuticals was primarily as a result of the company's sale of its oncology business to Novartis, and adjusting for this disposal revenue was down 1%, hit by a 7% decline in sales of respiratory products and a 15% decline in sales of established products, partly offset by growth in new pharmaceuticals products, particularly its HIV drugs Tivicay and Triumeq.
Sales of the company's key seller Seretide/Advair were GBP3.7 billion, the company said, down around 30% from their peak in 2013.
The company's closely watched core earnings per share fell 15% to 75.7 pence from the 95.4 pence it reported a year before, in line with the company's guidance and consensus expectations of 76 pence. At actual exchange rates core earnings per share was down 21%.
Glaxo said it continues to expect core earnings per share growth to reach double digits on a constant currency basis for 2016, although it added that is mindful that the "macro-economic and healthcare environment continue to be challenging."
The company proposed a final dividend of 23 pence, taking its total dividend for the year to 80 pence, in line with the previous year, and confirmed a special dividend of 20 pence per share from the Novartis deal. It continues to expect to pay a full year dividend of 80 pence for the next two years.
Glaxo said that new product sales were GBP2.0 billion in 2015, driven by sales of its HIV products, new respiratory drugs and its meningitis vaccines, and it now expects to reach its target of GBP6.0 billion of new product sales in 2018, rather than its previous guidance of 2020.
The company said its integration and restructuring programme following the deal is on schedule, with GBP1 billion of incremental cost savings delivered in 2015 at costs of GBP1.9 billion. It is on track to deliver GBP3 billion in cost savings by the end of 2017.
The company said that it sees "significant opportunities" for its portfolio of around 40 research and development assets, with up to 10 phase III trials expected to start in 2016 and 2017, up to 20 phase II trials expected to start, and up to 10 regulatory filings lined up.
"In 2015, we made substantial progress to accelerate new product sales growth, integrate new businesses in Vaccines and Consumer Healthcare and restructure our Global Pharmaceuticals business. This progress means the group is well positioned to return to core earnings growth in 2016," said Chief Executive Officer Andrew Witty in a statement.
Shares in Glaxo were up 2.0% at 1,455.50 pence Wednesday afternoon, one of the best performers in the FTSE 100.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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