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Respiratory slump drags down Q2 sales for GSK [Medical Marketing and Media](Medical Marketing and Media Via Acquire Media NewsEdge) GLAXOSMITHKLINE'S sec- ond-quarter results had execu- tives encouraging investors to focus on the long term. "What we need to be very clear about is making sure we're making the right decisions for the long- term future of the group," CEO Andrew Witty stated. CFO Simon Dingemans also talked about future opportuni- ties in an interview, saying it "will take time to build" its primary care and respiratory businesses. Results for the quarter indi- cate why GSK is taking that view: sales fell 4% if looking at con- stant exchange rates (13% if not allowing for rate fluctuations), to almost $9.5 billion for the quar- ter. Sales for the first half of the year were down 3% if keeping exchange rates constant-12% if not-to almost $20 billion. The company missed consen- sus expectations for the quarter and told investors it does not expect sales to grow in 2014. Weak respiratory and con- sumer sales were significant factors in the firm's quarter and half-year numbers. Total US sales fell 12% for the quarter, to just shy of $3 billion compared to the same period last year. Pricing pressures helped drive the 14% drop in US respirato- ry sales compared to the same period last year. Advair sales slipped 19% during the quarter compared to the same period last year, to $899.5 million. US respiratory sales for the first-half of the year fell 17%, compared to the same six-month period in 2013. The hit to Advair's half- year sales: a 24% drop, to almost $1.7 billion, compared to the same six months the year before. A surprise for GSK, but not for Leerink analyst Seamus Fernandez, was Lovaza's per- formance. Sales for the fish-oil drug plummeted 81% compared to the same period last year, to just under $46 million. Teva introduced a generic in April. GSK is also looking to regain momentum in the consumer space after a recall of weight- loss drug alli and other OTC supply issues. And the firm is in major adaptation mode fol- lowing a three-party asset swap earlier this year, which has GSK handing off its oncology division to Novartis in exchange for the Novartis vaccine business. But respiratory's performance has the attention of Leerink's Fernandez. "Without a pickup in switching to new respiratory portfolio products, we struggle to see a compelling value proposi- tion in GSK particularly as com- petition is poised to intensify with new respiratory entrants... as well as the expected introduc- tion of Advair generics in 2017," he wrote. -Deborah Weinstein Sagging Advair sales had a major impact on GSK's bottom line (c) 2014 Haymarket Media, Inc. |