GlaxoSmithKline PLC on Wednesday reported that first-quarter profit fell 13.7 percent from a year ago as generic competition in the United States cut into sales of its anti-depressant and heart medication drugs.
Profit for the three months ending March 31 was 1.3 billion pounds ($2.58 billion) compared to 1.5 billion pounds a year earlier.
Revenue for Glaxo _ the world's second-largest drug maker after Pfizer Inc. _ rose 1.6 percent to 5.69 billion pounds ($11.3 billion). In the key U.S. market, however, revenue fell 10 percent to 2.14 billion pounds ($4.25 billion, 2.67 billion euros).
The results were broadly in line with market expectations, according to Jeremy Batstone-Carr, analyst at Charles Stanley. GlaxoSmithKline shares rose 1.6 percent to 1,120 pence ($22.24).
"Our performance this quarter was in line with our expectations," said J.P. Garnier, who is stepping down as chief executive officer in May. "We continue to see sustained growth from key areas of our business such as Seretide/Advair, vaccines and consumer. However, sales were impacted by generic competition and declines in Avandia sales."
Glaxo, based in London, said sales of asthma medication Seretide/Advair rose 10 percent to 954 million pounds ($1.89 billion 1.19 billion euros), with strong growth in all regions; while sales of Avandia, for type 2 diabetes, fell 56 percent to 191 million pounds ($379 million 238 million euros).
Avandia received a black box warning, the most serious a drug can carry, from the U.S. authorities last November. The labeling alerts doctors and patients that the drug could increase the risk of heart attacks, though the evidence is inconclusive. Glaxo has agreed to a major study assessing Avandia's heart effects, but it won't be complete until 2014.
Sales of heart medication Coreg fell 77 percent to 48 million pounds ($95 million), following the introduction of generic competition in September.
Other products hit by generic competition included the antidepressant Wellbutrin, down 3 percent, the Flixonase/Flonase treatment for rhinitis, down 33 percent, and the anti-nausea drug Zofran, where sales fell 69 percent.
Glaxo said it expected to file additional information about Cervarix, its cervical cancer vaccine, with the U.S. Food and Drug Administration in the second quarter. Cervarix, which is expected to become a major earner for the company, has been approved in more than 60 countries, Glaxo said.
"The absence of any developments regarding Cervarix, which is due to be filed with the FDA by end-June, is somewhat concerning," Batstone-Carr said.
Glaxo announced on Tuesday that was buying Sirtris Pharmaceuticals Inc., based in Boston, for $720 million in cash.
Sirtris' research focuses on a recently discovered class of enzymes known as sirtuins that are believed to be linked to the aging process, and appear to restrict calorie intake without a change in eating habits.
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