Tail-end of swine flu boom lifts Glaxo Q1 profits

Tail-end of swine flu boom lifts Glaxo Q1 profits

London: Bumper sales of swine flu vaccine boosted GlaxoSmithKline’s first-quarter earnings per share 17%, more than expected, but the rest of 2010 may be tougher as H1N1 business wanes.

While Glaxo is better placed than many of its rivals when it comes to patent expiries, it will be hit by accelerating erosion in sales of antiviral Valtrex as multiple generics enter the US market later this year.

As a global player, it also faces pressure from government healthcare reforms and price cuts — not just in the United States but also Japan and Germany.

On the plus side, the threat to its top product, the lung drug Advair, seems to be receding after a decision by Novartis’s generics unit Sandoz to drop a US partnership with Vectura on developing a copy of the medicine.

Pre-tax profit was £2.23 billion ($3.41 billion), equivalent to earnings before major restructuring up 17% at 30.7 pence per share as sales rose 9% to £7.36 billion.

The mean consensus forecast had been for earnings of 29.5p and sales of £7.17 billion, according to Thomson Reuters.

Sales of pandemic H1N1 flu vaccine were 698 million, ahead of expectations.

Glaxo’s strong performance follows better-than-expected quarterly results and resilient outlooks from rival European drugmakers Roche, Novartis and Novo Nordisk.

Some US companies, however, notably Eli Lilly, have warned that President Barack Obama’s healthcare reforms will hit earnings in 2010 and 2011.

Unlike many other large drugmakers, Glaxo does not give explicit guidance on sales and earnings.