LONDON (AP) - Drugmaker GlaxoSmithKline saw it shares rise Wednesday after it said it was sticking to a generous dividend and that its blockbuster asthma medicine, Advair, was weathering competition from generic versions.
Shares rose almost 4 percent after the company said sales increased about 1 percent in the fourth quarter from a year earlier to 7.6 billion pounds. The company also cheered investors by keeping the dividend unchanged at 80 pence a share.
The company nonetheless posted a fourth-quarter loss of 546 million pounds ($758 million) from a profit of 257 million pounds a year earlier. The company said the impact of U.S. tax changes reduced earnings by 1.63 billion pounds.
CEO Emma Walmsley said that improving the pharmaceuticals business remains GSK’s “main priority,” and that it was strengthening two current therapy areas, respiratory and HIV, and two potential areas, oncology and immuno-inflammation.
The company is bracing, meanwhile, for competition in the coming year in the respiratory and HIV businesses. The company says it can see a potential for a generic version of its blockbuster asthma drug, Advair.
Like many pharma companies, GSK is trying to continue to deliver growth as older treatments lose patent protection and new generic products eat away at profit margins.
But Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said GSK has benefited from the fact that the company’s rivals have so far struggled to get a generic version of Advair past U.S. regulators.
“GSK is seeing sales of its respiratory blockbuster hold up better than expected. However, the looming increase in competition remains a ticking time bomb under the group,” he said. “Advair accounts for 10 percent of group sales - if a generic makes it to market early next year, it will blow a hole in the GSK income statement.”
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