A SURGE in sales of vaccines and Sensodyne toothpaste helped pharmaceutical giant GlaxoSmithKline (GSK) beat sales forecasts in its latest financial results.
GSK, which has 1,200 staff at its plants in Barnard Castle and in Cumbria, said revenues rose by 3% to £7.1bn in the three months to September 30.
Some of its strongest lines currently are cervical cancer vaccine Cervarix, especially in Japan, while Sensodyne revenues soared 23% on the back of its new repair & protect toothpaste.
Lucozade had a tough quarter as it faced tough competition, GSK said, though this was offset by growth elsewhere in the nutritional healthcare division.
Underlying profits in the three months rose 2% to £2.01bn and for the nine months of the current year totalled £6.4bn before one-off charges.
Chief executive Andrew Witty said as the company develops its drugs pipeline – with treatments for Parkinson’s disease, hepatitis C and asthma set to launch – sales should accelerate in 2012.
GSK, the UK’s largest drug group, has nine treatments in late-stage trials that are due to complete before the end of 2012 covering respiratory diseases, oncology, diabetes and HIV.
Witty added that healthcare reform in the US and price cuts in Europe will lop £325m off revenues this year with the possibility of more measures to reduce prices to come.
Even so, he expects the group’s underlying margins to start to improve gradually from 2012. The group is also pushing ahead with the sale of some of its non-core consumer businesses, he added, with bids to be in by the end of the year.
Shares in the drugs group rose by 1% on the figures, with analysts pleased by the 6% increase in the quarterly dividend and £300m increase in next year’s share buyback target.
Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, said the figures provide “reassurance“ while the carrot of new blockbuster drugs continues to be dangled.
The company is currently working on cutting costs and this summer said an additional £300m in savings have been identified, which will bring total cost cuts to £2.5bn by next year.
The company’s bid to save £2.2bn by 2012 has led to the loss of 4,000 jobs worldwide, including 200 at Barnard Castle and 300 in Ulverston in Cumbria over the last two years.
But it is considering Barnard Castle, Ulverston or Montrose in Scotland as possible sites for a new plant employing 1,000 people, which are part of a £500m expansion into new markets.
