Glaxo profits hit by Avandia sales fall

GlaxoSmithKline today said first quarter profits dropped 13% after results showed a sharp fall in sales for under-fire diabetes treatment Avandia.

The group revealed Avandia sales dived by 56% to £191m (€237m) in the first three months of the year, after demand for the product suffered in the wake of claims made last year that the drug increased the risk of heart attack.

The allegations were strongly denied by the firm, which said today it was hopeful the worst of the sales declines may be over. It pointed out that the number of prescriptions written for the once high-selling drug had stabilised in the past six to eight weeks.

Glaxo reported pre-tax profits of £1.87bn (€2.3bn), down from £2.14bn (€2.6bn) in the same period last year.

The results were dragged lower by the Avandia sales fall, as well as competition from cheaper generic rivals, which combined to see pharmaceutical revenues drop 4% to £4.79bn (€5.9bn).

Profits were also impacted by an £87m (€108m) hit as the firm continued restructuring the business under plans announced last October to save £700m (€871m) a year.

Glaxo has already said it was “inevitable” that some of its 22,000-strong UK workforce would be affected, but has yet to provide details and declined to confirm the number of expected job losses again today.