Glaxo Wellcome Earnings Fall
LONDON (AP) _ Glaxo Wellcome PLC’s half-year profits fell 21 percent to 827 million pounds ($1.35 billion), mainly because it lost U.S. patents on two key medicines, but the drugmaker encouraged investors with a bullish outlook for new products.
Glaxo Wellcome shares rose 8 percent by early Thursday afternoon on the London Stock Exchange.
Glaxo Wellcome said its earnings for the six months ending June 30 compared with profits of 1.05 billion pounds in the same period a year earlier.
Glaxo Wellcome attributed the big decline to last year’s loss of U.S. patents for two top-selling medicines, the ulcer drug Zantac and the herpes medication Zovirax.
Revenues slipped to 3.87 billion pounds ($6.30 billion), compared with 4.11 billion pounds a year earlier.
``We expect the second half of 1998 to show a very different picture, as the effect of these patent expiries becomes a thing of the past,″ said Glaxo Wellcome chairman Sir Richard Sykes.
Sykes said Glaxo Wellcome plans to launch five important new drugs by the end of 1999 for HIV and AIDS, hepatitis B, asthma and flu. The company also is developing new treatments for illnesses that include stroke and diabetes.
Despite the slide in earnings, Sykes noted that Glaxo Wellcome is a much more diverse company than it was in 1994, the year before Glaxo PLC’s $15 billion hostile takeover of Wellcome PLC.
Back then, Zantac accounted for more than 40 percent of sales, Sykes said, but Glaxo Wellcome now has a wider portfolio of new drugs and medicines in the advanced stages of development.
Respiratory drugs now account for 27 percent of sales, with Flixotide showing a 71 percent jump in sales and Serevent rising 24 percent, Glaxo Wellcome said.
Anti-viral products now make up 17 percent of total sales, with Valtrex up 71 percent and the HIV medication Combivir up 18 percent.
Glaxo Wellcome’s migraine drugs, Imigran-Imitrex and Naramig-Amerge, enjoyed 13 percent sales growth in the huge U.S. market. The depression treatment Wellbutrin SR saw sales double, while the epilepsy medicine Lamictal was up by 28 percent.