GSK profits drop by a quarter as European competition increases

GSK shares hit at a one year low after the pharmaceuticals company suffered a 23 per cent fall in pre-tax profits earning £986m, down from £1.29bn the same time last year.

GSK is one of the UKs biggest companys

Shareholders expressed concern with the age of major drug Advair, which makes up nearly a fifth of sales, as similar products are starting to appear in Europe, with others to follow in the US.

Sales dropped worldwide due to a rise in competition: with a ten per cent fall of drug and vaccine sales in the US and a twenty per cent decrease in China following allegations of bribery and corruption in the region.

Earnings per share dropped 25 per cent to 19.1p upon the drug maker releasing the report.

This comes after GSK sold of two of its biggest brands, Lucozade and Ribena, to Suntory for £1.35bn last year.

Sir Andrew Witty, CEO of GlaxoSmithCline, said: “Clearly the quarter saw a number of significant challenges, particularly in the US where we saw further pressure in price and contracting - a trend that we've been talking about for some time -impacting sales, especially for Advair.

“Now that also has affected some of the launch profiles for our new products. And I think we're seeing it broadly in the marketplace, but where we're especially feeling it is in respiratory as we transition our old portfolio to our new portfolio.”

He added: “Given the pressures in the US, we are not expecting sales in 2014 to grow but given the progress we have made across the portfolio… we are now expecting the figures will be broadly similar to 2013s.’”

The drug maker is hoping two new inhaled respiratory medicines, Breo and Anoro will receive a high uptake later in the year although it will also have to deal with the patent loss of heart pill Lovaza.

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