GSK Q4 profits rise 32pc, but plans more savings

4 Feb 2010

Pharmaceutical giant GlaxoSmithKline (GSK) has announced a 32pc rise in fourth-quarter net profits, largely thanks to strong sales of its pandemic flu products and growth in its emerging markets and consumer healthcare divisions. However, the company also today unveiled fresh restructuring plans.

In the final three months of 2009, GSK’s net profits soared to £1.8bn from the £1.36bn reported during the same period in 2008.

The company’s Q4 bottom line was boosted by record sales of its H1N1 vaccine Relenza, in addition to a one-off HIV joint venture company launched with Pfizer last November.

With regard to its levels of sale for its H1N1 vaccines, GSK said it expects these to be at roughly the same level in 2010 as they reached in 2009.

Good progress in sales
GSK said it saw full-year sales growth of 3pc during 2009.

 “We have seen good progress in our sales performance and we are maintaining a strong focus on cost reduction,” said GSK CEO Andrew Witty.

“Our strategy is delivering and I believe that GSK is now moving to a position where we can deliver our goal of long-term sustainable financial performance … I am confident of our prospects in 2010,” he added.

Job cuts
However, despite the Q4 profit bump, GSK today announced an expansion of its restructuring plan as it seeks to make additional savings of £500m by 2012 .

Much of the cost savings from this new restructuring will be generated through a reduction of its R&D infrastructure, GSK said.

It is proposing to stop its discovery research in selected areas including depression and pain, while at the same time establishing a new rare diseases unit.

Meanwhile, its neuroscience research will focus on neurodegeneration and neuroinflammation.

The UK-based pharma giant said while it would not be providing targets for job reductions, it remained “very conscious” of the impact restructuring has on its employees.

“We will announce restructuring outcomes once employees, relevant works councils and trade unions have been consulted,” GSK said, adding that “where possible, we will continue to try to preserve jobs”.

Photo: GSK CEO Andrew Witty

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