Healthy GSK expects to start shipping flu vaccine in September

Published on Wednesday 22 July 2009 21:35

GLAXOSMITHKLINE should begin shipping a swine flu vaccine by September it said yesterday. Reporting a rise in second quarter profits, the drugs giant said that it was in discussions with more than 50 countries about its treatments.

The drug maker, which is one of several firms commissioned by the World Health Organisation (WHO) to produce a vaccine for the pandemic virus, said it had already agreed contracts for 195 million doses with 16 countries worldwide.

GlaxoSmithKline (GSK) said it expected further "significant orders" of the H1N1 vaccine and announced plans to triple the availability of its swine flu treatment Relenza to 190 million doses per year by the end of the year.

GSK also has agreements worth $250 million (152.3m) with the US government to supply the ingredients for the vaccine and Relenza.

The company said sales of Relenza rocketed in the first half of this year as governments across the world moved to stockpile the drug in response to the pandemic threat. Sales were 282m in the six months, up from 32m in the first half of last year.

In the past three months, GSK's group turnover fell 2 per cent at constant exchange rates, hit by the performance of its US pharmaceuticals business.

Sales in the US division were down 15 per cent to 2.3 billion as GSK's drug patents continue to expire, leading to increased competition from competitors making generic medicines.

But GSK said revenues across all other areas of its business grew, with particularly strong performances in emerging markets, up 14 per cent to 700m and consumer healthcare with sales up 9 per cent to 1.2bn.

Pre-tax profits were 2.06bn in the second quarter when the effects of its major restructuring were included, up from 1.8bn in 2008's second quarter.

Stripping out the effects of the restructuring, profits were 2.25bn, ahead of analysts' expectations, while pre-tax profits for the first six months on the same basis were 4.18bn, up from 3.98bn last year.

The company said its restructuring programme has achieved annual cost savings of 900m and was expected to deliver cumulative annual savings of 1.7bn by the end of 2011.

Meanwhile, sales of Horlicks, GSK's malt-based bedtime drink, powered ahead by 18 per cent in the first half of the year and helped to offset slumping demand for Lucozade.

The pharmaceuticals giant said that while Horlicks continued to post rising sales, its sports drinks suffered as consumers shied away from impulse buys.

GSK said sales at its consumer healthcare division grew 7 per cent in the first six months of the year to 2.3bn, with European revenues climbing 3 per cent to 940m in the period. The company, which produces the Sensodyne and Aquafresh toothpaste brands, said its oral healthcare ranges rose 6 per cent to 734m in the second quarter.