LONDON, July 24 (Reuters) - Drugmaker GlaxoSmithKline, rocked by charges of corruption in China, reported amodest 2 percent rise in group sales on Wednesday but said thebribery scandal would inevitably have an impact.
"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," ChiefExecutive Andrew Witty said.
Britain's biggest drugmaker has been struggling to grow inrecent quarters due to loss of patent protection on some of itsmedicines and falling prices in austerity-hit Europe.
GSK's worldwide sales in the first quarter were 6.62 billionpounds ($10.17 billion), generating core earnings per share(EPS) up 1 percent at 26.3 pence. Analysts, on average, hadforecast sales of 6.60 billion pounds and core EPS, whichexcludes 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.
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.
The company admitted on Monday that some of its seniorChinese executives appeared to have broken the law and said itplanned to change its business model to lower the cost ofmedicines in the country.
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.
The bribery scandal suggests business in the country isgoing to get tougher, especially if Beijing succeeds in drivingdown the premium prices enjoyed by Western firms.
Glaxosmithkline (GSK)