GSK warns profits to be hit by generic drugs competition

AP News
|
Posted: Feb 08, 2017 11:57 AM

LONDON (AP) — Pharmaceutical company GlaxoSmithKline saw its sales and profits grow in the fourth quarter but warned that tougher competition from generic drugmakers could depress its earnings this year.

The London-based company said Wednesday its net income rose to 257 million pounds, from a loss of 354 million pounds a year earlier. Sales rose to 7.6 billion pounds, above both market expectations for 7.5 billion pounds and the previous year's figure of 6.3 billion pounds.

Outgoing CEO Andrew Witty, however, dampened the mood by noting that "this year we face some uncertainty as to the level of our earnings performance."

He highlighted the risk that a generic version of GSK's asthma drug Advair could be introduced in the U.S. If that happens, core earnings would be flat, instead of up by 5-7 percent.

After trading over 2 percent lower upon Witty's warning, shares in GSK recovered somewhat to close flat on the day.

Witty is due to retire in March and leave his position to Emma Walmsley, currently head of the consumer healthcare division.