GlaxoSmithKline's quarterly earnings beat analyst forecasts today as a weak pound softened the blow of generic competition in the United States to several older products.
Earnings per share before restructuring charges rose 6 per cent to 25.2 pence on sales up 7 per cent at £5.88 billion. Analysts polled by Thomson Reuters had on average forecasts EPS of 24.3p.
Glaxo's top-selling drug Advair - for asthma and chronic respiratory disease - showed reasonable growth in the third quarter, helped in part by price rises and use of higher doses.
The results highlight the relative resilience of large pharmaceutical companies to the economic downturn, following better than expected figures from Pfizer - the global leader - on Tuesday.
Glaxo, however, stuck to its cautious full-year forecast for a mid-single-digit decline in earnings per share in local currencies.
The British group's shares trade on just over 10 times forecast 2009 earnings, reflecting investor scepticism about a once high-flying industry sector that faces an unprecedented threat to sales as a slew of blockbuster drugs lose patent protection over the next 5 years.
In a bid to broaden the business and reduce risk, Glaxo's new chief executive, Andrew Witty, who took over in May, is diversifying into less traditional non-pharma areas, such as consumer healthcare and selling older, cheaper products in emerging markets.
He has struck two deals in the past week that reflect the diversification trend by buying dry-mouth treatment Biotene for $170 million and snapping up Bristol-Myers Squibb Co's mature products business in Egypt for $210 million.
Reuters