British pharmaceutical giant GlaxoSmithKline reported on Thursday a 3.5 percent decline in profit for the third quarter due to competition from generic drugs and the European and American ban on the diabetes drug Avandia.
For the three months ending September 30, GSK reported a net profit of £1.29 billion ($2 billion), compared to £1.34 billion achieved a year earlier. Revenues stagnated at £6.8 billion, which increased by two percent when excluding the impact of exchange rates. The company raised its dividend in the third quarter by seven percent to 16 pence.
In September, European regulators ordered the removal of Avandia from the market while the U.S. Food and Drug Administration (FDA) strictly limited its use in the United States, in both cases due to an increased risk of heart attack. The bans on Avandia and generic competition for Valtrex, a herpes medication, pressured revenues in the U.S., where they recorded an eight percent decline, and in Europe, where they were down nine percent, the company reported.
In the U.S., GSK reported a 32 percent increase in vaccine sales revenue, a 34 percent increase in cancer drug sales revenue, and a 20 percent increase in sales revenue from Lovaza, a fish oil pill for controlling blood fats. CEO Andrew Whitty stated that the group expects a two percent decline in revenue for the third quarter due to U.S. healthcare reform and reduced spending by European governments. (H)
