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Group sales were down, but R&D progress points to future growth.
GSK ended 2012 with Group sales down 1%, although sales were flat excluding prior-year comparisons related to over-the-counter (OTC) product disposals, the company announced in a Feb. 6, 2013 press release. The company maintained its core earnings per share on a CER basis and returned £6.3 billion (approximately 9.9 billion USD) to shareholders. GSK reported significant R&D progress, and filed six new drugs for regulatory review in 2012.
Although overall sales were down, there were some bright spots. Total sales in emerging markets grew 10% during 2012 and now account for 26% of GSK’s business, noted CEO Sir Andrew Witty in the press release. Excluding divested OTC products, Consumer Healthcare division sales grew 5%. Pharmaceutical and Vaccines division sales in the US were down 2%, but this was an improvement over 2011, in which sales were down 5%. Performance was adversely impacted by weak sales from the European business, down 7%, and negative pricing which adversely impacted growth by approximately 6%.
R&D delivered six new drug filings in 2012, and Phase III data is expected on 14 assets in 2013 and 2014, including nine new drugs and vaccines. “Over the next three years, GSK has the potential to launch around 15 new products globally. We are confident that we can sustain this level of productivity and that we can deliver our long-term goal of improving R&D returns to around 14%,” said Sir Witty in the release. “Allied to GSK’s stronger, globally diversified sales base, this R&D output provides a clear platform for growth, with 2013 marking the start of what should be a series of growth years for GSK.”
GSK also announced cost-savings measures through a change program to eliminate complexities, simplify supply-chain processes, shorten cycle times, lower inventory levels, and reduce the company’s carbon footprint. The company also plans further restructuring of the European pharmaceuticals business and expects to “continue to deliver targeted divestments at the periphery of the Group,” noted the release.