Drugs giant Glaxo sees pre-tax profits slide 17% to £1.63 billion

DRUGS giant GlaxoSmithKline posted a 17% fall in half-year profits yesterday as it continued to suffer from the impact of generic competition.

The blue-chip group, which said copycat versions of anti-depressant drugs Paxil and Wellbutrin had eroded sales, saw pre-tax profits fall to £1.63 billion in the second quarter in 2004.

But “outstanding” growth by newer products coming on stream was helping it to overcome competition elsewhere and meant turnover on a constant currency basis was up 2% at £5.06 billion.

Glaxo said asthma drug Advair and diabetes treatment Avandia performed particularly well, with their sales up 22% and 59% respectively during the three months to June 30.

The weak US dollar affected the results, and meant that operating profits fell by 9% to £1.71 billion, a fall of 1% when measured on last year’s exchange rates. Although the third quarter would be challenging, Glaxo said it expected a return to earnings growth in the fourth quarter.

Chief executive Jean-Pierre Garnier said: “Outstanding sales growth for several of our key products is enabling us to overcome the impact of generic competition to Paxil and Wellbutrin.

“In particular, Advair and Avandia continue to be significant engines of growth for the company.”