GlaxoSmithKline sees profits fall despite €1.66bn Covid related sales

The group is pressing ahead with a demerger of its consumer healthcare arm, which includes brands such as Sensodyne toothpaste and Panadol

Fourth-quarter pre-tax profits came in lower than expected at £706m (€838.4m), down 14%, or 8% higher on a constant currency basis.

Pharmaceuticals giant GlaxoSmithKline has said its pre-tax profits dropped last year, despite notching up £1.4bn (€1.66bn) in Covid-19 related sales.

The firm reported a 22% fall in pre-tax profits to £5.4bn (€6.41bn) for 2021 - a 10% decline with currency movements stripped out.

GlaxoSmithKline (GSK) said it remained on track to spin off its consumer healthcare arm by the middle of 2022, having recently rejected a £50bn (€59.39bn) approach for the division by Marmite maker Unilever, which it dismissed for being too low.

GSK's results revealed strong demand for its Covid-19 antibody drug Sotrovimab helped boost pandemic-related sales and expects a similar level this year, but it cautioned over a "substantially reduced profit contribution" due to lower margins on its anti-body treatment.

Fourth-quarter pre-tax profits came in lower than expected at £706m (€838.4m), down 14%, or 8% higher on a constant currency basis.

The group said the full-year drop in earnings was largely down to the sale of Horlicks and other consumer brands, as well as its share in Hindustan Unilever.

Without the hit from lower Covid-related sales, it forecast underlying operating profits to rise by between 12% and 14% on a constant currency basis this year on sales 5% to 7% higher.

The group is pressing ahead with a demerger and separate London Stock Exchange listing of its consumer healthcare arm, which includes brands such as Sensodyne toothpaste and Panadol pain relief.

Analysts had previously predicted that the spin-off, which is a joint venture with Pfizer, would be worth around £45bn (€53.43bn), but GSK is said to have been holding out for an improved bid of at least £60bn (€71.25bn) from Unilever.

Emma Walmsley, chief executive of GSK, said: "We have ended the year strongly, with another quarter of excellent performance driven by first-class commercial execution, and we enter 2022 with good momentum.

"This is going to be a landmark year for GSK, with a step-change in growth expected and multiple R&D catalysts, including milestones on up to seven key late-stage pipeline assets. 2022 is also the year when we demerge our world-leading Consumer Healthcare business."