GlaxoSmithKline 4th quarter profit up 66 pct with strong boost from swine flu vaccine

GlaxoSmithKline Q4 profit up 66 pct

LONDON — GlaxoSmithKline PLC, the world’s second largest drug maker by revenue, reported Thursday that its fourth-quarter profit soared by 66 percent, boosted by strong sales of swine flu vaccine and flu medicine.

In the three months ending Dec. 31, Glaxo turned a net profit of 1.63 billion pounds ($2.6 billion), compared to 982 million pounds a year earlier.

The strong finish pushed full-year profits up 20 percent to 5.5 billion pounds.

Sales of Relenza, the company’s drug for treating flu, totaled 720 million pounds for the year, compared to just 57 million pounds in 2008. In the fourth quarter, Relenza sales rose to 256 million pounds from 13 million pounds a year earlier.

Total vaccine sales were up 30 percent for the year to 3.7 billion, the company said, including sales of 883 million pounds for swine flu vaccine.

“I believe that GSK is now moving to a position where we can deliver our goal of long-term sustainable financial performance,” said Chief Executive Andrew Witty. “2009 saw GSK return to sales growth and I am confident of our prospects in 2010.”

The company raised its full-year dividend by 7 percent to 61 pence.

Glaxo shares closed up 0.7 percent at 1,226 pence on the London Stock Exchange, retreating from earlier highs in the session.

“Whilst we believe that it is still too early in the year to be thinking about estimate upgrades these results should be taken positively,” said Jeremy Batstone-Carr, analyst at Charles Stanley.

He called Glaxo “an island of relative tranquillity in a market characterized by falling risk appetite.”

Jonathan Jackson, analyst at Killik & Co., noted GSK’s ambition of raising its return on investment on its late-stage development pipeline to 14 percent, from the industry average of 11 percent.

“While there is little visibility over whether the group will achieve its target,” he cautioned, “success would deliver significant value for shareholders.”

The company said it aimed to cut expenditure by 500 million pounds by 2012, but said it would not announce a target for job reductions. Published reports have said that about 4,000 of GlaxoSmithKline’s 99,000 employees worldwide might be affected.

GSK said sales for the year were up 16.5 percent to 28.4 billion pounds.

Sales gains of 16 percent in Asia Pacific and 9 percent in Europe helped offset a 13 percent drop in the United States, where Glaxo said several products suffered from generic competition.