Final days of swine flu boost profits and sales for GSK

DRUGS giant GlaxoSmithKline has reported a 13 per cent leap in first-quarter sales, boosted by the tail end of the demand for swine flu vaccine.

The group yesterday said that 698 million in vaccine sales helped to drive the lift in revenues to a better-than-expected 7.4 billion.

Profits rose 16 per cent, with currency movements stripped out, to 2.2bn in the first three months of the year, but GSK only expects to see some 200m in swine flu sales this year, after governments scaled back orders as the threat of a pandemic receded.

It has already signalled a tough year ahead as the swine flu benefits drop out and amid increasing pressure from cheaper generic competitors to its blockbuster drugs.

The group is offsetting this by slashing costs and confirmed yesterday it was on track to make cumulative annual savings of 1.5bn by year's end, as part of efforts to trim 2.2bn by 2012.

GSK said in February that part of this would come from cuts in research and development, particularly neuroscience dealing with depression and pain.

Large-scale job losses are not expected at the company's sites in Scotland – where it employs 300 people at Irvine and 250 at Montrose.