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GSK promises growth this year after 2012 shortfall

Wed, 6th Feb 2013 12:13

LONDON, Feb 6 (Reuters) - GlaxoSmithKline, Britain'sbiggest drugmaker, renewed its promise to return to growth thisyear, after failing to deliver a hoped-for sales and marginrecovery in 2012.

GSK also announced a restructuring of European operations,drug manufacturing and research, designed to save at least 1billion pounds ($1.57 billion) annually by 2016, while it placedits Lucozade and Ribena drinks brands under strategic review.

After putting a number of major drug patent losses behindit, GSK had originally banked on pulling out of its trough in2012. In the event, sales were held back by larger-than-expecteddrug price cuts in austerity-hit Europe.

Sales in the final quarter of 2012 fell 3 percent to 6.80 billion pounds, generating "core" earnings per share (EPS) up 4percent at 32.6p pence, the company said on Wednesday.

Analysts, on average, had forecast sales of 6.88 billionpounds and core EPS, which excludes certain items, of 31.3p,according to Thomson Reuters I/B/E/S.

Chief Executive Andrew Witty is now looking to a clutch ofnew medicines to revive growth, starting with six drugs thathave already been submitted for approval in lung disease,melanoma, diabetes and HIV/AIDS.

Keenly awaited final-stage Phase III clinical trial resultsare also due for two high-risk, high-reward projects in heartdisease and cancer.

That makes 2013 a crucial year for GSK's pipeline, althoughthe main impact on the sales line will be felt during 2014 andbeyond - assuming that the new medicines live up toexpectations.

GSK's stock has underperformed in the past year, due todisappointment at its lack of growth, and it now languishessecond to last among large European drugmakers in terms ofsell-side analysts' ratings, ahead only of AstraZeneca,according to Thomson Reuters data.

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