Industry Trend Analysis - GSK Reinforces Commitment To Business Restructuring Plan - MAY 2016

BMI View : GSK's management will need to convince shareholders that its current operational structure - a business that has a not insignificant focus on consumer healthcare products, which some investors deem is at the expense of higher-margin pharmaceuticals - will result in improved long-term revenue earning prospects for the company. GSK suffered a steep fall in profits in 2015 and there was no let up in the decline during the fourth quarter , but CEO Andrew Witty said the UK drugmaker was on course for recovery this year.

In Q415, multinational drugmaker GlaxoSmithKline (GSK) registered sales of GBP6,286mn (USD9,131mn), equating to a 4% increase in sales in constant exchange rate (CER) terms and 2% in sterling terms - boosted by strong sales in the company's HIV and Vaccines businesses. ViiV Healthcare, the HIV drugs business in which it owns an 80% stake, was nearly floated in May 2015. However, the company shelved plans on the signs of encouraging growth. That decision has paid off, with sales up 51% in Q415.

In Q415, GSK's global pharmaceuticals turnover was GBP3,068mn (USD4,457mn), down 17% in CER terms and 9% in sterling terms, primarily reflecting a 3% decline in respiratory product sales, a 20% decline in sales of established products in the US and Europe (primarily a decline in Lovaza (omega-3-acid ethyl esters)), intensifying competition in Europe, the impact of the reshaping of the China business, and the disposal of the Oncology business to Novartis.

GSK Reports A Loss
GSK: Q415 Financial Snapshot
Source: GSK

This article is part of our Western Europe coverage. To access this article subscribe now or sign up for free trial