PHARMACEUTICAL giant GlaxoSmithKline has seen profits rise by 14% to £1.525bn in the first quarter, despite a slump in product sales.
Glaxo, which has 1,200 staff at plants in Barnard Castle, County Durham and in Cumbria, said that savings from a major cost-cutting programme and asset disposals helped to offset a 10% drop in sales to £6.585bn in the three months to March 31 compared with a year earlier.
The company was hit last year by the EU medicines regulator decision to pull its diabetes product Avandia off the shelves over fears that it increased the risk of heart attack and strokes. Regulators also restricted its availability in the United States.
The company said that sales were down 10% reflecting a £1bn reduction in sales of pandemic products and it expects to take a big hit from the Avandia decision.
Chief executive Andrew Witty said: “This impact is set to decline going forward and we expect underlying sales growth to translate into sustainable reported growth in 2012.”
He said that the first quarter was “positive on many fronts, with good progress made in delivery of our strategy to improve long-term financial performance”.
The company has been making sweeping cost savings including the axing of thousands of jobs worldwide including 200 at its Barnard Castle site where it now employs 900 staff. But it is also looking to invest £500m which could create jobs in the North.
