Legal charges leave Glaxo £304m in red
MAMMOTH legal costs and restructuring charges hit GlaxoSmithKline’s (GSK) second quarter financial performance causing the pharmaceutical giant to report losses for the period.
The drugmaker said losses amounted to £304m for the three months ended 30 June after it swallowed a £1.57bn legal charge connected to a number of court disputes while at the same time paying out £590m in restructuring costs.
However, the drugmaker’s underlying business remained fairly stable with turnover up four per cent for the period to £7bn.
Chief executive Andrew Witty said he felt encouraged by GSK’s performance and that he remained confident about the firm’s full year prospects.
GSK’s drug sales in the US, which make up 45 per cent of its business, performed poorly after falling by 13 per cent during the second quarter to £1.9bn.
Sales in the region declined after GSK lost herpes drug Valtrex to generic competitors, at the same time it discontinued its osteoporosis treatment Bovnia.
It also saw a 26 per cent fall in sales to £152m for its diabetes drug Avandia but the company did receive some good news last week after an advisory committee of America’s Food and Drugs Administration voted to recommend keeping the drug on the market – albeit with additional warning labels over potential side-effects.
Meanwhile, GSK and partners Shionogi have entered into the final stages of testing a new anti-HIV drug expected to increase competition in this area.