British pharmaceutical giant GlaxoSmithKline said today that its net profits fell in 2007 due to disappointing sales of the diabetes drug Avandia and increased competition from generic drugs makers.
Net profit dropped 3.2% to £5.214 billion sterling last year, compared with £5.389 billion in 2006. Revenues sank 2.2% to £22.716 billion pulled lower as Avandia sales tumbled to £1 billion, down from £1.6 billion in 2006.
'In 2008, GSK expects that the impact of lower Avandia sales together with increased generic competition will lead to a mid-single digit percentage decline in earnings per share,' GSK said today.
'The decline in Avandia sales, together with increased generic competition in the USA, will adversely impact our earnings in 2008, but looking ahead we remain confident in GSK's future,' added CEO Jean-Pierre Garnier, presenting his last annual results before retiring.
Demand for Avandia tumbled last year after US medical journals concluded that the drug significantly increased the risk of heart attack and cardiovascular problems.
The US Food and Drug Administration required a label to be put on Avandia, and similar treatments, warning of increased risk of heart failure.
GSK had already stated that the full extent of Avandia's sales fall will not be known until the end of the second quarter of 2008.
Andrew Witty, who is head of Pharmaceuticals Europe for GlaxoSmithKline, will succeed Garnier following his retirement as chief executive at the end of May 2008.
