GlaxoSmithKline: Offsetting Results
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|PRODUCT||2013 SALES||2012 SALES|
All sales are in millions of dollars and were translated using the Federal Reserve Board’s average rate of exchange in 2013: £1.5642.
All sales are in millions of dollars except EPS, and were translated using the Federal Reserve Board’s average rate of exchange in 2013: £1.5642.
2013 was the most productive period of research and development output in GlaxoSmithKline’s history. According to leadership, GSK led the sector for new medicine approvals by the Food and Drug Administration with six, accounting for 19 percent of U.S. new drug approvals during the year. GSK also lays claim to having received more FDA approvals of new molecular entities (NMEs) than any other company since 2009.
GSK management says the notably strong performance from its R&D organization during 2013 – with six major new product approvals coming in areas such as respiratory disease, HIV and cancer – is critical to the longer-term prospects of the Group. “That this has been achieved at the same time as R&D is effectively managing its cost base to deliver an improved estimated rate of return of 13 percent is particularly encouraging,” says Sir Christopher Gent, chairman of GSK. Management continues to target a 14 percent rate of return on a longer-term basis.
In addition to the industry-leading six major Rx product approvals, five other regulatory submissions were completed in 2013. The new product launches are anticipated to bolster businesses in Respiratory, Vaccines, HIV and Oncology. GSK’s pipeline remained substantial as of mid-2014 with more than 40 NMEs in late-stage development. Management says about 30 assets in the company’s pipeline have potential to be first-in-class in areas such as respiratory, immuno-inflammation, epigenetics and cardiovascular. During 2014 and 2015, GSK anticipates Phase III read-outs for six new molecular entities and is planning 10 NME Phase III starts in key areas including respiratory, oncology and immuno-inflammation.
The conversion of the company’s advanced pipeline to approved products represents the next step in GSK’s strategy to deliver sustainable organic growth and value to shareholders. Improved R&D productivity is underpinning GSK’s strategy to create more flexibility around the pricing of the company’s new medicines to meet the needs of payers and governments.
GSK has a significant worldwide commercial presence in 150-plus markets, a network of 86 manufacturing sites in 36 countries, and large R&D centers in the United Kingdom, United States, Spain, Belgium and China.
Management has reshaped the company’s business in recent years to better align to the strategic approach GSK has had in place since 2008. This reshaping has enabled the Group to better access markets with high-growth potential such as those in Asia Pacific, Latin America and Japan.
The company generated sales and earnings growth during 2013, with core EPS of 112.2p (18 cents) up 4 percent compared to 2012 at constant exchange rates (CER) and in line with market guidance. Turnover improved 1 percent CER to £26.5 billion ($41.46 billion) despite some unexpected challenges, including significantly reduced sales in GSK’s Chinese business. The Vaccines business delivered solid sales growth despite the adverse impact on Cervarix sales stemming from the suspension of the recommendations for the use of HPV vaccines in Japan.
Management continued to strengthen and focus GlaxoSmithKline’s core business areas in 2013. During the year, the Group divested non-core products and other assets for proceeds totaling £2.5 billion ($3.91 billion). Continuing organic structural initiatives delivered incremental year-on-year savings of roughly £400 million ($626 million). Execs say this is creating greater flexibility to invest in GSK’s growth markets and new product launches and – combined with continued improvement in the company’s financial efficiency – strengthens its ability to deliver EPS growth ahead of sales. Additionally, new efficiencies resulting from GSK’s strategic priority to simplify its business are increasingly evident in manufacturing, supply chain and core business services.
According to GSK, Sir Andrew Witty continued to adopt industry-leading positions on multiple corporate responsibility issues during 2013. During the year, the company was widely acknowledged to have taken additional innovative steps to improve global public health in developing countries, to increase access and transparency of its clinical data and to modernize its commercial practices and interactions with customers.
GSK made new commitments to increase transparency of its clinical research. GSK is supporting the AllTrials campaign and became the first pharma company to commit to publishing detailed clinical study reports for all of its medicines. GSK also set an industry-first by launching an online system allowing researchers to request access to the anonymized patient-level data from its clinical trials.
GSK produced about £4.7 billion ($7.35 billion) in adjusted free cash flow during 2013. That, along with £2.5 billion ($3.91 billion) realized from divestments, gives the Group the flexibility GSK needs to protect its credit profile, fund organic investment and restructuring programs, and to meet its dedication to a growing dividend, further share buy-backs and bolt-on acquisitions.
The company during 2013 returned £5.2 billion ($8.13 billion) to shareholders via dividends and share buy-backs – helping generate the best yearly total shareholder return performance since GSK’s formation. Since Sir Andrew Witty became CEO of GSK in 2008 through early 2014, about £30 billion ($46.93 billion) has been returned to shareholders via £20 billion ($31.28 billion) of dividends and £10 billion ($15.64 billion) of share buy-backs.
Heading into 2014, management anticipated continued business momentum and targeted core EPS growth of 4-8 percent CER on turnover growth of about 2 percent CER on an ex-divestment basis (2013 EPS base of 108.4p, turnover £25.6 billion). This guidance range took into account the roll-out of new products along with potential competition from generics to older GSK medicines including Lovaza. But upon releasing first-half 2014 results, GSK leaders said it was unlikely that the company will deliver full-year sales growth and expected full-year core EPS on a CER and ex-divestment basis would be broadly similar to 2013.
During first-half 2014, turnover was reported at £11.17 billion ($17.48 billion). That amount represented a decrease of 3 percent CER based on core results and 7 percent CER based on total results compared to January-June 2013. Significant strategic progress was accomplished in the first six months of 2014 with the three-part Novartis AG transaction on track for completion during first-half 2015 and continued momentum in new Respiratory and HIV product launches.
Announced in April 2014, the major three-part inter-conditional transaction with Novartis involving GSK’s Consumer Healthcare, Vaccines and Oncology businesses. The companies will create a new world-leading Consumer Healthcare business with 2013 pro-forma revenue of £6.5 billion ($10.17 billion). GSK will hold majority control with an equity interest of 63.5 percent. GSK will acquire Novartis’ worldwide Vaccines business (excluding influenza vaccines) for an initial cash consideration of $5.25 billion with subsequent potential milestone payments of up to $1.8 billion and continuing royalties. GSK will divest its marketed Oncology portfolio, related R&D activities, and rights to its AKT inhibitor and additionally grant commercialization partner rights for future oncology products to Novartis for an aggregate cash consideration of $16 billion (of which up to $1.5 billion depends on the results of the COMBI-d trial). Also, GSK shareholders will receive £4 billion ($6.26 billion) capital return funded by net cash transaction proceeds that is expected to be delivered via a B share scheme.
“This proposed three-part transaction accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings,” Sir Andrew Witty notes. “Opportunities to build greater scale and combine high-quality assets in Vaccines and Consumer Healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.”
In terms of sales, GSK managers say 2013 was a broadly based performance. There was an improved performance in the U.S. business, where sales advanced 1 percent (or 4 percent excluding the divestment of Vesicare) compared to 2012. GSK reported a stabilization of its European business, which generated flat sales, with the benefits of the company’s restructuring program helping to offset economic and pricing pressures in the region.
Leadership remains dedicated to investing for continuing growth in GSK’s significant Emerging Markets business. Sales for 2013 in the region improved 5 percent for the year and 11 percent in the fourth quarter, excluding China.
GSK took steps during 2013 to increase the company’s equity holdings in its fast-growing Indian pharmaceuticals and consumer subsidiaries. Plans were revealed to build new manufacturing capacity in India.
The Pharmaceuticals business develops and manufactures medicines to treat a wide array of acute and chronic diseases. The portfolio is composed of patent-protected and off-patent medicines. Turnover during 2013 for this GSK segment amounted to £17.9 billion ($28 billion), representing 67 percent of the Group’s overall sales for the year.
GSK’s Vaccines business is one of the largest globally, producing pediatric and adult vaccines against various infectious diseases. The company distributed 860-plus million doses to 170 countries in 2013, of which more than 80 percent were supplied to developing countries. Vaccines sales for the year reached £3.4 billion ($5.32 billion), accounting for 13 percent of Group sales.
GSK develops and markets a broad portfolio of consumer healthcare products based on scientific innovation. The company has brands in four primary categories: Total Wellness, Oral Care, Nutrition and Skin Health. These categories consist of well-known brands such as Sensodyne, Panadol and Horlicks.
GSK completed an important divestment in the Consumer Healthcare business with the sale of the drink brands Lucozade and Ribena to Suntory Beverage & Food Ltd. of Japan for £1.35 billion ($2.11 billion). “While these are iconic brands, particularly in the UK, we believe their growth potential is better realized by a company with existing category presence and a substantial drinks distribution infrastructure in the emerging markets,” GSK management says.
Consumer Healthcare sales in 2013 rose 4 percent to £5.2 billion ($10.98 billion) – representing 20 percent of Group turnover – excluding divested brands, with growth occurring across all regions. Including the non-core OTC brands that were divested during first-half 2012, sales improved 2 percent in 2013.
Like the Consumer Healthcare business, the specialist HIV company ViiV Healthcare functions as a global unit. ViiV was founded with Pfizer Inc. during 2009. After a long-term collaboration on the co-development of several novel medicines, Shionogi & Co. joined ViiV during 2012.
ViiV sales in 2013 were flat at £1.4 billion ($2.19 billion). Growth generated by Epzicom/Kivexa and Selzentry/Celsentri (maraviroc), combined with the launch of the recently approved Tivicay (dolutegravir), was offset by the impact of continued competition to older products. Operating profit advanced 3 percent over the 2012 result.
GSK divested its anti-coagulant products for more than £700 million ($1.09 billion) during 2013 to The Aspen Group. GSK additionally created a new Established Products Portfolio composed of GSK’s older, largely non-promoted brands. The aim of the new portfolio is to find more opportunities to reduce complexity, enhance profitability and optimize the value of that group of products.
Respiratory represents GSK’s largest-selling Pharmaceuticals segment. Respiratory sales for GSK totaled £7.52 billion ($11.76 billion) during 2013, an increase of 4 percent at constant exchange rates and 3 percent in terms of pounds compared to 2012. The category’s sales in the first half of 2014 decreased 9 percent year-over-year (YoY) to £3.11 billion ($4.86 billion).
Worldwide sales of Advair/Seretide, GSK’s best-selling medicine, improved 4 percent during 2013 to £5.27 billion ($8.25 billion). This growth was largely fuelled by a strong U.S. performance. Flovent/Flixotide global sales advanced 2 percent over the 2012 figure to £796 million ($1.25 billion). Ventolin sales were up 2 percent to £642 million ($1 billion) for 2013. Xyzal total sales, almost exclusively produced in Japan, rose 26 percent to £137 million ($214 million) based on a strong allergy season.
For the first six months of 2014, Advair/Seretide sales fell 14 percent YoY to £2.13 billion ($3.33 billion). Sales for Flovent/Flixotide dropped off 4 percent from first-half 2013 to £365 million ($571 million) and Ventolin sales improved 11 percent to £328 million ($513 million). Xyzal sales during January-June 2014 grew 4 percent to £68 million ($106 million), with a majority of that amount coming from Japan.
Company management is highly encouraged by the growing strength of GSK’s respiratory portfolio. With Advair, Flovent, Ventolin, Breo, Anoro and seven other respiratory products in late-stage development, managers are confident in GSK’s ability to maintain a leadership position in this area well into the next decade. The transition of the respiratory portfolio is under way due to decreasing Advair sales, new sales growth anticipated from Breo, Anoro and Incruse, and promising pipeline products.
According to GSK, the company has been at the forefront of respiratory science since the introduction of Ventolin more than 40 years ago. Now GSK has launched the new Ellipta multi-dose dry powder inhaler, marking the next generation of company innovation in inhalation devices.
Sales of Anti-virals during 2013 declined 6 percent CER to £667 million ($1.04 billion) compared to the prior year. The drop-off reflected decreases in Zeffix and Hepsera in China, partially offset by tender shipments of Relenza in Japan. Valtrex led the category in 2013 with sales of £224 million ($350 million). First-half 2014 sales for Valtrex dropped off 24 percent from 1H 2013 to £74 million ($116 million). The Zeffix total for 1H 2014 decreased 18 percent to £85 million ($133 million) compared to January-June 2013 sales. Valtrex and Zeffix sales are now reported by GSK under its new classification segment known as Established Products.
For the company’s CNS category (now reclassified under Established Products), global 2013 sales fell 8 percent to £1.48 billion ($2.32 billion). GSK’s former best-selling franchise Paxil/Seroxat produced 2013 sales of £285 million ($446 million), down 16 percent compared to 2012, mainly due to generic competition in Japan and Europe. Requip decreased 18 percent to £125 million ($196 million) for 2013, reflecting generic competition in the United States and Europe. Lamictal declined 7 percent to £557 million ($871 million), mainly due to U.S. generic competition to Lamictal XR that began during first-quarter 2013.
In the first two quarters of 2014, because of generic competition Paxil/Seroxat sales fell 22 percent YoY to £104 million ($163 million). Lamictal sales for 1H 2014 improved 3 percent to £250 million ($391 million), and the Requip amount during that period came in at £54 million ($84 million).
The Cardiovascular and Urogenital segment generated 2013 global sales of £2.24 billion ($3.5 billion), a decrease of 8 percent versus the 2012 result. Sales in the category declined primarily due to the impact of the conclusion of the Vesicare joint-promotion pact during first-quarter 2012. Excluding Vesicare, Cardiovascular and Urogenital overall sales fell 1 percent.
Among other Cardiovascular and Urogenital products during 2013, the Avodart franchise rose 10 percent to £857 million ($1.34 billion), with 31 percent growth generated by Duodart/Jalyn. Avodart sales advanced 5 percent to £648 million ($1.01 billion) compared to 2012. Lovaza decreased 5 percent to £584 million ($913 million) as a result of increased competition and the decline in the non-statin dyslipidemia prescription market. Arixtra 2013 sales dropped off 15 percent to £167 million ($261 million).
Now classified as the Cardiovascular, Metabolic and Urology segment, first-half 2014 sales dropped off 2 percent to £474 million ($741 million) compared with the one-year-earlier period. The Avodart franchise rose 2 percent to £398 million ($623 million), with 15 percent growth coming from Duodart/Jalyn and a 2 percent decline produced by Avodart. Levitra decreased 30 percent to £48 million ($59 million) compared to the drug’s January-June 2013 performance. Prolia advanced 18 percent to £23 million ($36 million), before the termination in Europe of the joint-commercialization deal with Amgen Inc.
Anti-bacterials 2013 sales were flat in terms of CER growth versus the prior calendar term, coming in at £1.24 billion ($1.94 billion). Augmentin sales advanced 5 percent to £630 million ($985 million), with strong growth in EMAP partially reflecting a comparison with some supply interruptions in 2012. In first-half 2014, Augmentin sales grew 1 percent to £299 million ($468 million) versus the drug’s January-June 2013 result. Zinnat sales for full-year 2013 were flat at £169 million ($264 million), and Zinacef sales during the same period declined 14 percent to £55 million ($86 million).
Oncology and Emesis sales for 2013 advanced 22 percent to £969 million ($1.52 billion), which was the second straight year of double-digit percentage growth for the segment. U.S. sales during the year improved 17 percent, with strong performances by Votrient, Promacta and Arzerra. The market introductions of two new metastatic melanoma products, Tafinlar and Mekinist, aided 2013 U.S. growth. Sales in Europe rose 28 percent and EMAP increased 18 percent. Globally, Votrient sales improved 80 percent to £331 million ($518 million), Promacta sales jumped up 46 percent to £186 million ($291 million) and Arzerra sales rose 23 percent to £75 million ($117 million). Tykerb/Tyverb sales dropped off 13 percent to £207 million ($324 million) due to increased competition. According to GSK, Hycamtin in Europe and EMAP as well as Argatroban in the United States continued to be adversely affected by generic competition in 2013.
First-half 2014 sales in the Oncology business rose 33 percent YoY to £556 million ($870 million). Votrient during 1H 2014 improved 36 percent to £188 million ($294 million) and Promacta grew 33 percent to £103 million ($208 million). Arzerra sales declined 21 percent to £28 million ($44 million) and Tykerb/Tyverb sales dropped off 10 percent to £87 million ($136 million). Generic competition to Hycamtin and Argatroban was more than offset by the new products Tafinlar and Mekinist, which recorded first-half 2014 sales of £55 million ($86 million) and £29 million ($45 million) respectively.
Dermatology sales for 2013 fell 8 percent to £770 million ($1.2 billion), primarily due to a decrease in the United States, declining 40 percent to £140 million ($219 million). The U.S. performance was negatively affected by generic competition, particularly to Bactroban, Duac and Soriatane. Also impacting sales was the effect of the disposal of various tail brands during second-quarter 2013. EMAP sales in 2013 rose 6 percent to £397 million ($621 million), with strong growth coming from Bactroban, Dermovate and Duac, particularly in Middle East/Africa and Latin America. European sales during 2013 grew 5 percent YoY to £170 million ($266 million).
Sales for the Dermatology area continued to decline during first-half 2014. The total for that time frame was £249 million ($389 million), a decrease of 17 percent compared to the January-June 2013 period, as generic competition remained a negative factor for GSK in this segment.
Rare diseases sales in 2013 were up 7 percent at constant exchange rates to £495 million ($774 million). Volibris sales rose 21 percent to £147 million ($230 million), and Mepron increased 8 percent to £101 million ($158 million). Volibris and Mepron were the primary drivers of the 7 percent category growth. Flolan sales in 2013 dropped down 16 percent to £103 million ($161 million), primarily due to the biennial price reduction in Japan during second-quarter 2012 and continued generic competition in the United States and Europe. Rare diseases sales for January-June 2014 totaled £205 million ($321 million), down 5 percent YoY.
Immuno-inflammation turnover rose from £70 million ($109 million) during 2012 to £161 million ($252 million) for 2013. Benlysta global sales for 2013 amounted to £146 million ($228 million), with £134 million ($210 million) coming from the U.S. market. Worldwide Benlysta sales for first-half 2014 rose 24 percent to £71 million ($111 million) versus its January-June 2013 result.
ViiV Healthcare global sales of £1.39 billion ($2.17 billion) in 2013 were flat versus the 2012 result. Sales in the United States improved 5 percent, Europe decreased 3 percent and EMAP fell 12 percent. Epzicom/Kivexa sales rose 14 percent to £763 million ($1.19 billion) compared with 2012, and Selzentry increased 10 percent to £143 million ($224 million). Tivicay produced 2013 sales of £19 million ($30 million) from the early stages of its U.S. market introduction that began during August. Growth contributions within ViiV’s operations were offset by decreases in the mature portion of the portfolio, mainly Combivir, which decreased 36 percent to £116 million ($181 million).
ViiV recorded first-half 2014 turnover of £663 million ($1.04 billion), an increase of 9 percent over the 2012 amount. For January-June 2014, global sales improved 9 percent. ViiV’s U.S. sales increased 20 percent versus 1H 2013, Emerging Markets fell 6 percent, Japan rose 17 percent, and Europe edged down 1 percent. Sales in first-half 2014 for Epzicom/Kivexa went up 9 percent to £365 million ($571 million), Selzentry advanced 4 percent to £71 million ($111 million) and Tivicay generated £95 million ($149 million). This growth was partially offset by decreases in the mature portfolio, mainly spurred by generic competition to Combivir, down 42 percent to £32 million ($50 million), and Trizivir, dropping 60 percent to £18 million ($28 million).
GSK managers say the performance of the Vaccines business improved towards the end of 2013, with a significant improvement in tender sales during the fourth quarter. The 2 percent increase in Vaccines sales to £3.42 billion ($5.35 billion) was principally attributable to the growth of Infanrix/Pediarix, Fluarix/FluLaval and Boostrix. Growth in 2013 was largely offset by the decrease of Cervarix in Japan. The decline resulted from the suspension of the recommendations for the use of HPV vaccines in Japan along with an adverse comparison with strong Cervarix sales in 2012, which benefited from the final stages of the HPV vaccination catch-up program in that country. Cervarix sales fell 37 percent versus 2012 to £172 million ($269 million). Excluding Cervarix in Japan, global Vaccines sales improved 5 percent.
Infanrix/Pediarix sales during 2013 improved 9 percent to £862 million ($1.35 billion), with growth mainly reflecting stronger tender shipments in Europe and EMAP as well as the benefit in the United States of a competitor supply shortage. Boostrix sales, additionally benefitting from the U.S. competitor supply issue, rose 19 percent to £288 million ($450 million). Hepatitis vaccines declined 4 percent to £629 million ($984 million), primarily reflecting lower U.S. sales due to the return of competing vaccines to the market in 2H 2012, combined with decreases in Europe and China. Synflorix sales advanced 2 percent to £405 million ($634 million), aided by strong tender sales in Middle East/Africa and Latin America. Rotarix sales improved 5 percent to £375 million ($587 million), with strong growth in Middle East/Africa and Europe partially offset by the effect of increased competition in Japan. Fluarix/FluLaval sales grew 25 percent to £251 million ($393 million) after the U.S. market introduction of the Quadrivalent formulation.
Vaccines worldwide sales in first-half 2014 totaled £1.42 billion ($2.22 billion), increasing 4 percent compared to the same time period in 2013. U.S. sales went up 9 percent and Emerging Markets increased 10 percent versus 1H 2013, partly offset by decreases in Europe, down 1 percent, and Japan, which fell 27 percent. The U.S. result was aided by a favorable comparison with first-half 2013, due to CDC stockpile movements. The Emerging Markets performance mainly reflected the phasing of sales of Boostrix and Rotarix.
Boostrix global sales in the first six months of 2014 grew 45 percent to £154 million ($241 million), reflecting growth in all regions. Sales benefited in the United States partly from competitor supply issues, and in Emerging Markets due to the phasing of tenders. Cervarix sales fell 28 percent to £56 million ($88 million) versus first-half 2013, largely reflecting decreases in Japan. Sales of hepatitis vaccines dropped down 9 percent to £262 million ($410 million), partly reflecting the phasing of shipments in the United States and Emerging Markets. First-half 2014 sales of Infanrix/Pediarix went up 9 percent to £404 million ($632 million). Most of that growth stemmed from the United States, which benefited from a favorable comparison with January-June 2013 because of product withdrawal from the CDC stockpile. Rotarix improved 24 percent to £189 million ($296 million) as growth was spurred by tender shipments in Europe and Emerging Markets. Synflorix sales in the first two quarters of 2014 advanced 7 percent YoY to £167 million ($261 million), reflecting the phasing of tenders in Emerging Markets.
Consumer Healthcare sales in 2013 advanced 2 percent over the 2012 result to £5.19 billion ($8.12 billion). Excluding the non-core OTC brands divested in first-half 2012, turnover improved 4 percent with overall growth generated by all three regions.
Total wellness sales of £1.94 billion ($3.03 billion) in 2013, excluding the divested non-core OTC brands, rose 1 percent compared to the prior year. In the United States and Europe, alli produced strong growth, largely resulting from being out of stock for much of 2012. A severe cold and flu season during early 2013 aided growth of several respiratory brands such as Coldrex, Beechams and Panadol Cold and Flu. This growth was partly offset by a 57 percent reduction in Contac sales in China because of new shelving requirements, and Fenbid, which decreased 31 percent in advance of mandatory price reductions.
Oral care sales for 2013 reached £1.88 billion ($2.94 billion), up 6 percent versus the prior calendar year. The improvement was fuelled by growth in Specialist oral health. Sensodyne Sensitivity and Acid Erosion advanced 15 percent and denture care brands improved 9 percent, with Aquafresh falling 12 percent in 2013.
Nutrition sales for 2013 went up 7 percent to £1.1 billion ($1.72 billion) with strong growth in Rest of World markets. The performance was paced by Horlicks, up 14 percent, and Boost in India as well as key expansion markets in the sub-continent. Lucozade grew 4 percent and Ribena rose 3 percent over their 2012 results.
Skin health global sales during 2013 totaled £272 million ($425 million). Growth of 5 percent was spearheaded by Abreva in the United States.
For the first two quarters of 2014, turnover of £2.15 billion ($3.36 billion) was accomplished by the Consumer Healthcare unit, a 2 percent decrease versus 1H 2013. The decline reflects the impact of supply issues, comparison to a strong cold and flu season in first-quarter 2013, and slowing in some Rest of World markets partly because of economic pressures. Estimated market growth was 2 percent, according to GSK.
Wellness sales for January-June 2014 amounted to £782 million ($1.22 billion), an 8 percent decrease primarily due to the supply issues and product recalls that significantly impacted sales of products for Smokers Health (down 31 percent) and alli. Oral health sales during the same period improved 2 percent to £891 million ($1.39 billion). The continued growth of Sensodyne (up 10 percent) was offset by a 17 percent decrease in Aquafresh sales, which were impacted by supply issues in Europe and the United States along with competitive pressures to the brand. Nutrition sales rose 10 percent to £321 million ($502 million) versus 2012. Horlicks grew 9 percent, reflecting strong growth in India, and Boost advanced 12 percent. Skin health product sales in 1H 2014 fell 11 percent to £155 million ($242 million), primarily due to lower sales of Bactroban in China.
Recent Product Approvals/In The Pipeline
GlaxoSmithKline’s business is sustained via research and development investment. In 2013 the company spent £3.4 billion ($5.32 billion) before non-core items and £3.92 billion ($6.14 billion) in total on the development of innovative medicines, vaccines and consumer products. The total expenditure – both before and including divestments – for first-half 2014 amounted to £1.55 billion ($2.61 billion, representing 13.9 percent of turnover), down 4 percent versus January-June 2013.
GSK leaders rate 2013 as the most productive period of R&D output in the company’s history. Of the six major new medicine submissions the company profiled at the beginning of 2013, five were approved during the year: Breo and Anoro for respiratory disease, Tafinlar and Mekinist for melanoma, and Tivicay for HIV. The sixth asset, Tanzeum (albiglutide), was FDA-approved during April 2014.
Breo Ellipta combines the inhaled corticosteroid fluticasone furoate “FF” and the long-acting beta2-agonist (LABA) vilanterol “VI” (FF/VI 100/25 mcg). The medicine is indicated for the long-term, once-daily, maintenance treatment of airflow obstruction in patients with COPD, including chronic bronchitis and/or emphysema. GSK and Theravance launched the drug during October 2013. The companies announced in late June 2014 the submission of an sNDA with FDA for Breo Ellipta as a once-daily treatment for asthma in patients aged 12 years and older.
Anoro Ellipta is the first FDA-approved once-daily product combining two long-acting bronchodilators in one inhaler for the maintenance treatment of COPD, including chronic bronchitis and/or emphysema. The combination anticholinergic/LABA contains umeclidinium/vilanterol 62.5 mcg/25 mcg. Cleared by FDA in December 2013, Anoro Ellipta’s U.S. launch activities began in first-quarter 2014. Anoro Ellipta for treating COPD received EU approval in May 2014. GSK and Theravance announced in early July 2014 that the medicine was approved in Japan for the relief of various symptoms due to airway obstruction with COPD.
Tafinlar and Mekinist were each cleared by U.S. regulators in May 2013 as single agents for unresectable or metastatic melanoma with BRAF V600E mutation. Mekinist additionally was FDA-approved for BRAF V600K mutation. These mutations must be detected by an FDA-approved test, such as the THxID-BRAF companion diagnostic assay from bioMérieux SA. EU clearance for Mekinist was revealed by GSK on July 4, 2014, as a single agent in treating adult patients with unresectableor metastatic melanoma with a BRAF V600 mutation.
Tafinlar and Mekinist were granted accelerated FDA approval for use in combination with each other during January 2014. The approved indication was for treating patients with unresectable melanoma (melanoma that cannot be removed by surgery) or metastatic melanoma (melanoma that has spread to other parts of the body) with BRAF V600E or V600K mutations.
A big highlight for ViiV during 2013 was the FDA marketing clearance of the integrase inhibitor Tivicay during August. According to GSK, physician response to Tivicay has been extremely positive and the product launch trajectory is on pace with the best recent launches in the HIV space. The new medicine was approved in Europe during January 2014 and market introductions were planned in several markets throughout the rest of the year.
GSK and Janssen R&D Ireland Ltd. announced a new development and commercialization collaboration in June 2014 for a single-tablet combination for maintenance treatment of HIV-1. The one-tablet regimen would consist of Tivicay and Janssen’s non-nucleoside reverse transcriptase inhibitor Edurant (rilpivirine).
The glucagon-like peptide-1 receptor agonist Tanzeum is a biological product for treating type 2 diabetes. The new medicine is administered once-weekly using an injector pen supplied with a 5mm 29-gauge thin-walled needle. GSK launched Tanzeum in the United States during late July 2014. Albiglutide was approved by the European Medicines Agency during March 2014 under the brand name Eperzan for use in adult patients with type 2 diabetes.
During 2013, GSK launched its new injectable quadrivalent flu vaccine in the United States. FDA approved the vaccine during December 2012 under the trade name Fluarix Quadrivalent. The flu vaccine was cleared for approval in its first European markets during 2013. The vaccine is marketed as Influsplit Tetra in Germany and as Fluarix Tetra in the UK. This is the first four-strain influenza vaccine to be approved in a European country for active immunization of adults and children from 3 years of age for the prevention of influenza disease caused by the two influenza A virus subtypes and the two influenza B virus types contained in the vaccine.
Arnuity Ellipta (fluticasone furoate inhalation powder) was cleared by U.S. regulators in August 2014 as prophylactic therapy in patients aged 12 years and older for maintenance treatment of asthma. The once-daily inhaled corticosteroid medicine was approved for doses of 100mcg and 200mcg.
Another Ellipta product given the green light by the U.S. regulatory agency during 2014 is Incruse (umeclidinium). In April, FDA approved Incruse Ellipta for the long-term, once-daily, maintenance treatment of airflow obstruction in patients with COPD, including chronic bronchitis and/or emphysema. The European Commission also granted marketing authorization for Incruse Ellipta during April. Umeclidinium represents GSK’s first once-daily anticholinergic.
Regulatory submission in Japan for umeclidinium monotherapy for COPD was announced by the company during May 2014.
GSK has been concentrating on reducing the gap between approvals of pipeline products in Japan with those in the United States and Europe. During 2013, Japan became the first country to gain regulatory approval for Relvar Ellipta in asthma with its launch occurring in early December.
ViiV filed its investigational single-tablet regimen containing dolutegravir, abacavir and lamivudine to U.S. and EU regulators during October 2013. In early September 2014, ViiV announced European Commission approval for Triumeq tablet for treating HIV in adults and adolescents aged 12 years and older and weighing at least 40kg. FDA clearance was granted in August 2014 for the treatment of HIV-1 infection. Triumeq is ViiV’s first once-daily one-pill dolutegravir-based regimen that combines the integrase strand transfer inhibitor dolutegravir with the nucleoside reverse transcriptase inhibitors abacavir and lamivudine.
Promacta (eltrombopag) gained a new indication from FDA during August 2014: for use in patients with severe aplastic anaemia (SAA) who have had an insufficient response to immunosuppressive therapy. Once-daily Promacta now represents a first-in-class treatment option for this previously treated SAA patient population, for which it was granted Breakthrough Therapy designation by FDA in March 2014.
The CD20-directed cytolytic monoclonal antibody Arzerra was approved by U.S. and EU regulators during 2014 for a new indication. In early July, GSK and Genmab A/S announced European Commission clearance for Arzerra in combination with chlorambucil or bendamustine for treating patients with chronic lymphocytic leukemia (CLL) who have not received prior therapy and who are not eligible for fludarabine-based therapy.
In April 2014, FDA approved a supplemental biologic license application (sBLA) for Arzerra in combination with chlorambucil for treating previously untreated patients with CLL for whom fludarabine-based therapy is considered inappropriate.
Work on the experimental integrase inhibitor GSK-744 continues to advance. A clinical trial of the long-acting injectable form of this drug was expected to start during second-quarter 2014.
The company has dedicated research programs for diseases that affect the developing world. GSK is one of the few healthcare companies researching new vaccines and new medicines for all three of the World Health Organization’s priority diseases: HIV/AIDS, malaria and tuberculosis.
GSK has a malaria vaccine candidate that has demonstrated the potential to cut in half the amount of malaria cases in young children. Managers say this vaccine could save the lives of hundreds of thousands of children in Africa, and the company is dedicated to making it available at a not-for-profit price. GSK announced in July 2104 the EU approval filing of RTS,S. The malaria vaccine candidate is intended exclusively for use against the Plasmodium falciparum malaria parasite, which is most prevalent in sub-Saharan Africa (SSA). About 90 percent of estimated deaths from malaria occur in SSA, and 77 percent of those are in children younger than 5 years.
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August 2015 Focus: Top 200 Medicines