GSK cheers investors with asthma drug sales, big dividend

LONDON — Drugmaker GlaxoSmithKline saw it shares rise Wednesday after it said it was sticking to a generous dividend and that its blockbuster asthma medicine, Advair, was weathering competition from generic versions.

Shares rose almost 4 percent after the company said sales increased about 1 percent in the fourth quarter from a year earlier to 7.6 billion pounds. The company also cheered investors by keeping the dividend unchanged at 80 pence a share.

The company nonetheless posted a fourth-quarter loss of 546 million pounds ($758 million) from a profit of 257 million pounds a year earlier. The company said the impact of U.S. tax changes reduced earnings by 1.63 billion pounds.

CEO Emma Walmsley said that improving the pharmaceuticals business remains GSK's "main priority," and that it was strengthening two current therapy areas, respiratory and HIV, and two potential areas, oncology and immuno-inflammation.

The company is bracing, meanwhile, for competition in the coming year in the respiratory and HIV businesses. The company says it can see a potential for a generic version of its blockbuster asthma drug, Advair.

Like many pharma companies, GSK is trying to continue to deliver growth as older treatments lose patent protection and new generic products eat away at profit margins.

But Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said GSK has benefited from the fact that the company's rivals have so far struggled to get a generic version of Advair past U.S. regulators.

"GSK is seeing sales of its respiratory blockbuster hold up better than expected. However, the looming increase in competition remains a ticking time bomb under the group," he said. "Advair accounts for 10 percent of group sales — if a generic makes it to market early next year, it will blow a hole in the GSK income statement."

You may also interested in

China launches second space station, Tiangong 2

Sep 15, 2016

China has launched its second space station in a sign of the growing sophistication of its...

China says some factories have violated anti-smog...

Jan 3, 2017

China's environmental ministry says an unspecified number of companies have violated measures meant...

China begins to ease its 2,000-year-old monopoly...

Jan 3, 2017

China has started an overhaul of its salt industry, easing a monopoly that has existed in some form...

Choked by smog, Beijing creates new environmental...

Jan 8, 2017

Officials in Beijing have announced a new environmental police squad to root out illegal burning in...

China exports shrink as Trump trade tensions loom

Jan 13, 2017

China's exports fell back into contraction again last month, signaling renewed weakness for the...

About Us

Frontal Report is an emerging leader in all forms of media. We aim to be the leading news brand for readers around the world.

Contact us: sales[at]frontalreport.com

Subscribe Now!