UK pharmaceuticals giant GlaxoSmithKline has reported lower-than-expected 2003 profits and warned that earnings could stagnate in 2004 as generic competition undermines sales.
Pre-tax profit before exceptional items rose 3% to £6.72 billion sterling in the year to December, below analyst expectations of profit of £7-7.17 billion. Excluding the impact of currency fluctuations, the figure rose by 9%. Including one-off items, 2003 pre-tax profits grew by 15% to £6.33 billion.
GlaxoSmithKline is seeing sales of some of its star drugs slide as generic copies of the products erode its market share. In the fourth quarter alone, pre-tax profits before exceptionals tumbled by 25% from the same time the previous year to £1.28 billion.
Revenue rose by just 1% to £21.4 billion, supported by sales of asthma drug Advair/Seretide which jumped by 39%. But sales of its former blockbuster anti-depressant Seroxat/Paxil fell by 4% over the year, slumping by 40% in the fourth quarter alone as generic competition took its toll.
GlaxoSmithKline also gave a cautious outlook, saying earnings per share excluding the effect of exchange rate fluctuations might fail to grow in 2004 from last year's levels.
'As the impact of generics becomes less significant, GSK looks forward to a return to earnings per share growth in constant exchange rate terms in 2005,' the group said in a statement.
