Glaxo beats forecasts with 14% profits fall

Drugs giant GlaxoSmithKline today reported a 14% slide in third quarter profits and said it was losing close to £3bn (€3.81bn) in annual sales as competition from cheaper generic rivals heats up.

The group posted underlying pre-tax profits of £1.88bn (€2.38bn) for the three months to the end of September, excluding restructuring costs, although the results were better than markets had been expecting.

GSK said cheaper competition was having a significant impact on pharmaceutical sales, down 4% in the quarter on a constant currency basis to £4.89bn (€6.21bn).

Its under-fire Avandia diabetes treatment – which has been rocked by allegations the drug increases the risk of heart attack – continued to suffer with sales down another 23% and GSK said the outlook “remained negative”.

But the weaker pound helped boost total sales, ahead by 7% to £5.88bn (€7.46bn).

GSK said it was also so far seeing only modest effects of the economic slowdown on consumer product sales.

However, recently appointed boss Andrew Witty said the group needed to “monitor closely the impact that changes in the global economy will have”, cautioning that countries may start to put healthcare spend under review.