(Alliance News) - GlaxoSmithKline PLC on Wednesday posted a higher profit for the third quarter of 2019 thanks to a rise in vaccines revenue and the commencement of its consumer healthcare combination with US peer Pfizer Inc.
For the three months ended September 30, the London-headquartered pharma major reported a 14% increase in pretax profit to GBP1.95 billion from a GBP1.71 billion profit the year before.
Revenue rose 16% to GBP9.39 billion from GBP8.09 billion, with particularly sharp 20% growth from Vaccines and 30% growth in Consumer Healthcare - to GBP2.31 billion and GBP2.53 billion respectively.
Vaccines revenue growth was thanks to higher sales of shingles vaccine Shingrix, as well as meningitis and flu vaccine contributions. Consumer Healthcare, meanwhile, grew as a result of Glaxo's acquisition of legacy brands from Pfizer.
Pfizer and Glaxo combined their consumer healthcare businesses into a joint venture during the period, with the newly created business owning both Glaxo's Sensodyne toothpaste and Pfizer's Advil painkiller and Caltrate calcium supplement brands. Pfizer received a 32% equity stake in the joint venture, with Glaxo holding the rest. Within three years of the joint venture's formation, GSK will separate it via a demerger and separate listing in the London.
For the first nine months of 2019, pretax profit was GBP4.51 billion, a 31% change from GBP3.43 billion a year ago and revenue increased by 9.9% to GBP24.86 billion from GBP22.62 billion.
The company declared a 19 pence per share quarterly dividend, flat from the year before. As in 2018, the company is forecasting a dividend of 80p per share for 2019 as a whole.
Glaxo has upgraded its annual guidance and is now forecasting a flat adjusted earnings per share figure at CER, having previously forecast a 3% to 5% decline at CER.
The company said its "new guidance reflects operating performance in the nine months, increased investment in R&D and priority assets and a lower expected effective tax rate of around 17% for the year."
Chief Executive Officer Emma Walmsley said: "GSK has made further good progress in Q3, with sales growth across all three businesses, and we have today upgraded our full-year EPS guidance. This quarter we have continued to strengthen our pipeline and have advanced assets in Respiratory, HIV and, notably, Oncology, where we are on track to file three innovative medicines by year end, following positive pivotal trial data. We also achieved a significant milestone with the completion of our new Consumer Healthcare Joint Venture with Pfizer, to create a new world leading consumer healthcare business."
Shares in Glaxo were up 2.0% at 1,774.20p in London on Wednesday afternoon following the midday announcement.
By Anna Farley; annafarley@alliancenews.com
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Glaxosmithkline (GSK)