Final Results - Part 1
GlaxoSmithKline PLC
21 February 2001
PART 1
Preliminary Announcement of Results for the year ended 31st December 2000
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GLAXOSMITHKLINE'S STRONG PERFORMANCE FROM KEY THERAPY AREAS AND NEW
PRODUCTS DRIVES EARNINGS PER SHARE GROWTH TO 16% (14% CER)
HIGHLIGHTS
- Pharmaceutical sales up 10 per cent
- Sales growth in key therapy areas: CNS 16 per cent,
Respiratory 15 per cent, Anti-virals 14 per cent
- New products contributed nearly £1 billion in growth,
up 60 per cent
- Avandia sales of £462 million
- Seretide sales of £208 million, US launch of Seretide/Advair
planned for April 2001
- Business performance profits before tax up 11 per cent;
EPS up 14 per cent
GlaxoSmithKline plc (GSK) today announces its results for the year
ended 31st December 2000, summarised below. The merger of Glaxo
Wellcome (GW) and SmithKline Beecham (SB) was completed on 27th
December 2000, and the results for 2000 reflect the combined results
of the separate GW and SB businesses in 2000.
2000 BUSINESS PERFORMANCE RESULTS
----------------------------------
2000 1999 Increase Increase
£m £m CER% £%
Total Sales 18,079 16,164 9 12
Trading Profit 5,026 4,378 12 15
Profit Before Tax 5,327 4,708 11 13
Earnings Per Share 61.0p 52.7p 14 16
Commenting on the performance for the year, Jean-Pierre Garnier, Chief
Executive Officer, said:-
'These results, achieved while we were separate companies, demonstrate
the strength and performance of the two organisations we have brought
together to form GSK. Clearly our employees remained focused on
maintaining the momentum of our separate businesses, despite the
distraction of integration planning, and delivered excellent results.
I'm particularly pleased by the performance of Seretide and Avandia.
The business is in good shape and GSK is off to a strong start.'
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Business performance results exclude merger items and restructuring
costs. Growth rates are at constant exchange rates (CER) unless
otherwise stated. 1999 sales and trading profit exclude Healthcare
Services.
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Fourth quarter 2000 - Sales growth in the fourth quarter was 4 per
cent, essentially reflecting the impact of wholesaler stocking in the
third quarter in the USA. Key products, such as Paxil, Augmentin and
Wellbutrin, achieved significantly higher growth in prescription
volume than in reported sales, indicating that underlying business
performance in the fourth quarter remained strong.
Pharmaceuticals
---------------
Pharmaceutical sales of £15,429 million were 85 per cent of total
sales and grew at 10 per cent. With sales of over £2.6 billion, new
products represent 17 per cent of pharmaceutical sales and grew 60 per cent.
Pharmaceutical sales in the USA, which represents half of GSK's total
pharmaceutical business, grew 15 per cent driven by strong
performances from all major products. In Europe, pharmaceutical sales
growth was 6 per cent, while the rest of the world (RoW) was up 8 per cent.
Strong growth from key therapy areas: CNS growth driven by
Seroxat/Paxil - In GSK's largest sales category, CNS, excellent growth
of 16 per cent to £3,279 million was driven by an outstanding
performance from Seroxat/Paxil, which increased by 17 per cent to
£1,550 million. During 2000, Paxil became the market leader in the US
SSRI (selective serotonin reuptake inhibitor) market in new retail
prescriptions. Paxil benefited throughout the world from its new
indication for Social Anxiety Disorder. GSK's strategy of broadening
the label for new indications continued with filings for Generalised
Anxiety Disorder and Post Traumatic Stress Disorder, and the expected
launches during 2001 will contribute to further growth of Paxil in the
USA. In Europe, where Seroxat continues to be the number one
antidepressant, its sales grew by 11 per cent to £334 million, while
in the RoW growth was 29 per cent to £159 million. Paxil was launched
in Japan at the end of 2000 and is off to a strong start.
Wellbutrin for depression also made a significant contribution to
GSK's strong CNS performance. In the USA, sales grew 19 per cent,
and worldwide sales amounted to £452 million. In the company's
migraine portfolio - which achieved sales of £782 million, up 5 per
cent - Imigran/Imitrex remains the global market leader with sales of
£705 million.
Lamictal for epilepsy grew strongly - 28 per cent to £289 million
worldwide and 34 per cent in the USA to £138 million - owing to
additional promotional resources in the USA.
Three key Respiratory products - Seretide, Flixotide, and Serevent -
contributed £410 million in growth - In the Respiratory therapy area,
Flixotide/Flovent, up 29 per cent to £880 million, continues to be the
world's leading treatment for asthma. US sales growth of 57 per cent
represents an outstanding performance. Seretide achieved sales of
£208 million, and continues to be successfully launched in markets
around the world. Further Seretide growth will be driven by its US
launch planned for April under the trade name Advair. The company
expects Seretide/Advair to become the treatment of choice for
persistent asthma.
Anti-viral leadership continued with the launch of Trizivir, the first
triple combination treatment for HIV/AIDS - The growth of GSK's HIV
products, up 14 per cent to £1,145 million, contributed strongly to
the performance of the company's Anti-viral therapy area. Combivir
grew 21 per cent to £562 million, while Trizivir, the first triple
combination HIV therapy, was launched in the USA in December 2000 and
subsequently in the UK, France and Switzerland. Strong performances
from Ziagen and Agenerase, with combined sales of over £200 million,
reflect the broadness of the HIV portfolio. In the herpes franchise,
Valtrex, up 32 per cent to £242 million, gained significant market
share owing to the convenience of its once-daily dosing.
Confirmed success of Avandia drove the Metabolic & GI business -
Avandia for the treatment of Type 2 diabetes continues to fulfil its
outstanding potential, achieving sales of £462 million. With sales in
the US of £433 million and a 55 per cent market share, Avandia has
been prescribed to over 1.7 million patients. In 2001, further growth
is expected from Avandia as it continues to rollout in Europe and RoW.
Lotronex, a treatment for irritable bowel syndrome, was launched in
the USA in March 2000 and generated sales of £36 million before being
withdrawn in November 2000.
Augmentin retained momentum in Anti-bacterials, with long-term
opportunities for growth - The highlight of the performance in the
Anti-bacterial therapy area was Augmentin in the USA, where it grew by
13 per cent to £725 million, benefiting from increased awareness of
its effectiveness in treating drug-resistant bacteria. Worldwide,
Augmentin achieved total sales in 2000 of £1,219 million, up 8 per cent.
Vaccines increased 11 per cent to £842 million - New vaccines,
accounting for 63 per cent of the total vaccine portfolio, were up 20
per cent, boosted by the performance of Infanrix, the company's DTPa
(diphtheria, tetanus and pertussis) range of combination vaccines -
growing at 47 per cent.
Consumer Healthcare
-------------------
Consumer Healthcare sales grew 3 per cent; trading profit grew 7 per
cent - In the USA, consumer sales decreased 3 per cent, reflecting the
impact of private label smoking control products and a mild 'flu season.
Worldwide sales of Oral Care products rose 6 per cent to £642 million,
with sales growth of 13 per cent in the Aquafresh product line.
Nutritional Healthcare products increased 9 per cent to £535 million.
Sales growth was primarily driven in the UK by the strength of
Lucozade Sport and by the success of Ribena. Worldwide sales of
over-the-counter (OTC) medicines totalled £1,454 million, down 1 per
cent primarily owing to an 8 per cent decline in the smoking control
franchise.
Consumer Healthcare set to benefit from Block Drug acquisition - In
January 2001, GSK completed the acquisition of Block Drug, the
manufacturer of Sensodyne toothpaste and other oral healthcare and
consumer products, for $1.24 billion. This strategic acquisition will
enhance the Consumer Healthcare performance through a significant
increase in sales and sales synergies through geographic expansion of
major brands, significant cost savings, and other improvements in
trading margins.
Dividend
--------
Both GW and SB had already announced dividends for the period up to
31st December 2000. GW will pay a second interim dividend and SB a
fourth interim dividend on 17th April 2001.
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GSK - one of the world's leading research-based pharmaceutical and
healthcare companies - is committed to improving the quality of human
life by enabling people to do more, feel better and live longer. For
company information, visit GSK on the World Wide Web at www.gsk.com.
Enquiries:
UK Media enquiries Martin Sutton (020) 8966 8000
------------------ Philip Thomson (020) 8966 8000
Alan Chandler (020) 8975 2290
US Media enquiries Nancy Pekarek (215) 751 7709
------------------ Mary Anne Rhyne (919) 483 2839
European Analyst/Investor enquiries Jennie Younger (020) 8966 8378
----------------------------------- Duncan Learmouth (020) 8966 5961
Joan Toohill (020) 8966 8715
Anita Kidgell (020) 8966 8369
US Analyst/Investor enquiries Frank Murdolo (212) 308 5185
------------------------------ Tom Curry (215) 751 5419
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GSK prepares its financial results in £ sterling. Accordingly this
Announcement is issued in £ sterling. A convenience translation in
US$ is also issued and is available on 'Corporate Home' at www.gsk.com.
Cautionary statement regarding forward-looking statements
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Under the safe harbor provisions of the US Private Securities
Litigation Reform Act of 1995, GSK cautions investors that any forward-
looking statements or projections made by GSK, including those made in
this Announcement, are subject to risks and uncertainties that may
cause actual results to differ materially from those projected.
Factors that may affect GSK's operations include generic and brand
competition for existing products, ability to integrate the businesses
and realise synergies and cost savings, difficulties and uncertainties
inherent in new product development, pricing pressures, changes in
government laws and regulations, efficacy or safety concerns over
marketed products, adverse outcome of material legal proceedings,
changes in tax laws, and economic factors over which GSK has no
control including changes in inflation, interest rates and foreign
currency exchange rates and controls.
PROFIT AND LOSS ACCOUNT
2000
=======================
Merger, rest-
ructuring and
disposal of
Business performance subsidiaries Total
-------------------- ------------ ---------------
2000 1999 CER 2000 1999 2000 1999
£m £m % £m £m £m £m
SALES ------ ------ --- ----- ----- ------ ------
Retained businesses
* Pharmaceuticals 15,429 13,618 10 - - 15,429 13,618
* Consumer Healthcare 2,650 2,546 3 - - 2,650 2,546
------ ------ ----- ----- ------ ------
18,079 16,164 9 - - 18,079 16,164
* Healthcare Services - 632 - - - 632
------ ------ ----- ----- ------ ------
Total Sales 18,079 16,796 - - 18,079 16,796
------ ------ ----- ----- ------ ------
Cost of sales (3,811) (3,499) (8) (151) (399) (3,962) (3,898)
Selling, general and (6,732) (6,002) (9) (404) (44) (7,136) (6,046)
administration
Research and (2,510) (2,285) (7) (16) - (2,526) (2,285)
development
------ ------ ----- ----- ------ ------
Operating costs - (13,053) (11,786 ) (571) (443) (13,624) (12,229)
retained businesses
------ ------ ----- ----- ------ ------
Operating costs - - (607) - (30) - (637)
Healthcare Services
TRADING PROFIT
Retained businesses
* Pharmaceuticals 4,581 3,973 13 (526) (423) 4,055 3,550
* Consumer Healthcare 445 405 7 (45) (20) 400 385
------ ------ ----- ----- ------ ------
5,026 4,378 12 (571) (443) 4,455 3,935
* Healthcare Services - 25 - (30) - (5)
------ ------ ----- ----- ------ ------
Total Trading Profit 5,026 4,403 12 (571) (473) 4,455 3,930
Other operating 274 413 - - 274 413
income/(expense)
------ ------ ----- ----- ------ ------
Operating profit 5,300 4,816 (571) (473) 4,729 4,343
Disposal of associates 144 39 - - 144 39
Profits/(losses) of 65 15 (8) (8) 57 7
associates
Divestments - - 1,402 9 1,402 9
Merger transaction costs - - (121) - (121) -
------ ------ ----- ----- ------ ------
Profit before interest 5,509 4,870 11 702 (472) 6,211 4,398
Net interest payable (182) (162) - - (182) (162)
------ ------ ----- ----- ------ ------
PROFIT BEFORE TAXATION 5,327 4,708 11 702 (472) 6,029 4,236
Taxation (1,454) (1,327) (245) 109 (1,699) (1,218)
------ ------ ----- ----- ------ ------
Profit after taxation 3,873 3,381 12 457 (363) 4,330 3,018
Minority interests (120) (110) - - (120) (110)
Preference share (56) (49) - - (56) (49)
dividends
------ ------ ----- ----- ------ ------
EARNINGS 3,697 3,222 13 457 (363) 4,154 2,859
====== ====== ===== ===== ====== ======
EARNINGS PER SHARE 61.0p 52.7p 14 68.5p 46.7p
====== ====== ====== ======
To illustrate 'Business performance', merger items and restructuring
costs in 2000 and restructuring costs and disposal of subsidiaries in 1999
have been excluded and an adjusted EPS presented.
Appropriations of profit attributable to shareholders are set out
under 'Appropriations'.
PROFIT AND LOSS ACCOUNT
Q4 2000
=======================
Merger and
Business performance restructuring Total
-------------------- ------------ ---------------
Q4 2000 Q4 1999 CER Q4 2000 Q4 1999 Q4 2000 Q4 1999
£m £m % £m £m £m £m
SALES ------ ------ --- ----- ----- ------ ------
Retained businesses
* Pharmaceuticals 4,304 3,883 5 - - 4,304 3,883
* Consumer Healthcare 725 701 (1) - - 725 701
------ ------ ----- ----- ------ ------
5,029 4,584 4 - - 5,029 4,584
* Healthcare Services - - - - - -
------ ------ ----- ----- ------ ------
Total Sales 5,029 4,584 - - 5,029 4,584
------ ------ ----- ----- ------ ------
Cost of sales (1,048) (979) (1) (89) (166) (1,137) (1,145)
Selling, general and (1,858) (1,743) 2 (181) (18) (2,039) (1,761)
administration
Research and development (716) (673) (2) (13) - (729) (673)
------ ------ ----- ----- ------ ------
Operating costs - (3,622) (3,395) (283) (184) (3,905) (3,579)
retained businesses
------ ------ ----- ----- ------ ------
Operating costs - - - - (24) - (24)
Healthcare Services
TRADING PROFIT
Retained businesses
* Pharmaceuticals 1,266 1,085 14 (280) (167) 986 918
* Consumer Healthcare 141 104 29 (3) (17) 138 87
------ ------ ----- ----- ------ ------
1,407 1,189 15 (283) (184) 1,124 1,005
* Healthcare Services - - - (24) - (24)
------ ------ ----- ----- ------ ------
Total Trading Profit 1,407 1,189 15 (283) (208) 1,124 981
Other operating 148 190 - - 148 190
income/(expense)
------ ------ ----- ----- ------ ------
Operating profit 1,555 1,379 (283) (208) 1,272 1,171
Disposal of associates - - - - - -
Profits/(losses) of 14 24 (1) (8) 13 16
associates
Divestments - - 1,402 9 1,402 9
Merger transaction costs - - (75) - (75) -
------ ------ ----- ----- ------ ------
Profit before interest 1,569 1,403 9 1,043 (207) 2,612 1,196
Net interest payable (44) (52) - - (44) (52)
------ ------ ----- ----- ------ ------
PROFIT BEFORE TAXATION 1,525 1,351 10 1,043 (207) 2,568 1,144
Taxation (416) (376) (321) 36 (737) (340)
------ ------ ----- ----- ------ ------
Profit after taxation 1,109 975 11 722 (171) 1,831 804
Minority interests (34) (28) - - (34) (28)
Preference share (15) (13) - - (15) (13)
dividends
------ ------ ----- ----- ------ ------
EARNINGS 1,060 934 12 722 (171) 1,782 763
====== ====== ===== ===== ====== ======
EARNINGS PER SHARE 17.5p 15.4p 12 29.4p 12.5p
====== ====== ====== ======
To illustrate 'Business performance', merger items and restructuring costs
in 2000 and restructuring costs in 1999 have been excluded and an adjusted
EPS presented.
Pharmaceutical sales by therapeutic area
-----------------------------------------
2000
--------------------------------------------------------
Total USA Europe RoW
£m CER% £m CER% £m CER% £m CER%
------------ ------------ ----------- -----------
CNS 3,279 16 2,307 15 678 16 294 28
Depression 2,002 17 1,495 18 334 11 173 31
Seroxat/Paxil 1,550 17 1,057 18 334 11 159 29
Wellbutrin 452 19 438 19 - - 14 58
Migraine 782 5 588 5 152 - 42 11
Imigran/Imitrex 705 3 542 4 127 (2) 36 6
Naramig/Amerge 77 20 46 20 25 15 6 51
Lamictal 289 28 138 34 116 20 35 35
Requip 58 20 26 19 30 20 2 26
Zyban 115 54 60 1 34 >100 21 23
RESPIRATORY 2,789 15 1,122 26 1,117 9 550 10
Flixotide/Flovent 880 29 414 57 305 2 161 49
Serevent 622 8 330 24 253 (6) 39 14
Seretide 208 >100 - - 179 >100 29 >100
Flixonase/Flonase 408 16 294 18 45 10 69 14
Ventolin 343 (7) 31 (21) 149 (5) 163 (6)
Becotide 205 (25) 4 (82) 152 (12) 49 (40)
ANTI-BACTERIALS 2,472 2 1,142 7 705 (4) 625 1
Augmentin 1,219 8 725 13 320 (3) 174 9
Zinnat/Ceftin 430 - 204 (7) 113 3 113 10
Fortum 213 (9) 40 (17) 88 (1) 85 (14)
Amoxil 199 1 52 55 61 (18) 86 -
ANTI-VIRALS 1,899 14 917 17 531 13 451 12
HIV 1,145 14 686 16 345 18 114 (9)
Trizivir 7 >100 6 >100 1 >100 - -
Combivir 562 21 345 17 173 38 44 (5)
Epivir 309 (7) 164 - 100 (9) 45 (22)
Retrovir 61 (30) 25 (22) 23 (35) 13 (33)
Ziagen 154 75 100 46 44 >100 10 >100
Agenerase 52 60 46 52 4 81 2 >100
Herpes 616 5 188 14 162 1 266 3
Valtrex 242 32 147 24 58 22 37 >100
Zovirax 374 (7) 41 (12) 104 (8) 229 (6)
Zeffix 70 >100 5 >100 7 >100 58 >100
Relenza 32 97 14 29 6 51 12 >100
METABOLIC & GASTRO- 1,232 33 594 >100 248 (13) 390 3
INTESTINAL
Avandia 462 >100 433 >100 8 >100 21 >100
Zantac 575 (11) 119 (18) 189 (16) 267 (4)
Lotronex 36 >100 36 >100 - - - -
VACCINES 842 11 212 (5) 390 11 240 29
Hepatitis 462 (3) 168 (4) 210 (3) 84 (2)
Infanrix 171 47 35 59 98 34 38 84
ONCOLOGY & EMESIS 710 11 499 12 129 9 82 10
Zofran 491 13 338 15 93 12 60 6
Hycamtin 95 1 63 (5) 23 6 9 40
CARDIOVASCULAR 463 - 282 (8) 120 19 61 10
Coreg 148 11 148 17 - - - -
ARTHRITIS (Relafen) 210 (28) 183 (30) 17 (7) 10 (23)
DERMATOLOGICALS 249 (4) 35 (20) 62 (5) 152 -
OTHER 837 (2) 171 (6) 228 (7) 438 2
------------ ------------ ----------- -----------
TOTAL SALES 14,982 11 7,464 15 4,225 6 3,293 9
CONTINUING BUSINESS
Divested products 447 (2) 241 (1) 43 (5) 163 (3)
Famvir 152 11 114 20 18 (13) 20 (5)
Kytril 219 (7) 123 (14) 25 1 71 2
Other 76 (9) 4 (40) - - 72 (7)
------------ ------------ ----------- -----------
TOTAL 15,429 10 7,705 15 4,268 6 3,456 8
PHARMACEUTICAL SALES ============ ============ =========== ===========
SALES
Pharmaceutical sales by therapeutic area
----------------------------------------
Q4 2000
--------------------------------------------------------
Total USA Europe RoW
£m CER% £m CER% £m CER% £m CER%
------------ ------------ ----------- -----------
CNS 911 5 634 1 188 7 89 31
Depression 546 3 398 (1) 93 - 55 45
Seroxat/Paxil 421 - 277 (5) 93 - 51 45
Wellbutrin 125 12 121 11 - - 4 48
Migraine 222 - 172 2 38 (10) 12 14
Imigran/Imitrex 201 - 160 2 31 (12) 10 11
Naramig/Amerge 21 4 12 4 7 (2) 2 42
Lamictal 82 20 41 26 31 14 10 16
Requip 17 3 8 6 9 1 - -
Zyban 36 76 15 (12) 14 >100 7 66
RESPIRATORY 806 14 341 25 305 7 160 9
Flixotide/Flovent 265 28 139 64 77 (6) 49 36
Serevent 184 10 106 30 68 (8) 10 (1)
Seretide 77 >100 - - 63 >100 14 >100
Flixonase/Flonase 104 5 77 5 10 4 17 4
Ventolin 97 (10) 11 (20) 40 (8) 46 (8)
Becotide 50 (34) (1) >(100) 39 (19) 12 (41)
ANTI-BACTERIALS 720 (7) 360 (3) 194 (12) 166 (9)
Augmentin 371 (2) 237 4 89 (12) 45 (6)
Zinnat/Ceftin 135 (4) 70 (9) 34 4 31 (2)
Fortum 56 (16) 10 (30) 22 (11) 24 (16)
Amoxil 52 (19) 11 3 17 (35) 24 (10)
ANTI-VIRALS 539 11 261 11 136 4 142 18
HIV 321 12 193 13 92 13 36 -
Trizivir 7 >100 6 >100 1 >100 - -
Combivir 159 18 96 16 48 23 15 16
Epivir 85 (3) 47 6 25 (7) 13 (20)
Retrovir 16 (22) 7 (16) 5 (26) 4 (27)
Ziagen 41 31 26 13 12 64 3 82
Agenerase 13 - 11 (11) 1 41 1 >100
Herpes 170 3 55 16 38 (8) 77 2
Valtrex 78 51 43 28 15 19 20 >100
Zovirax 92 (18) 12 (13) 23 (19) 57 (19)
Zeffix 23 >100 2 >100 2 >100 19 >100
Relenza 12 (23) 1 (93) 1 (76) 10 >100
METABOLIC & GASTRO 341 23 162 86 65 (11) 114 2
- INTESTINAL
Avandia 140 >100 127 >100 4 >100 9 >100
Zantac 153 (16) 29 (33) 48 (16) 76 (8)
Lotronex 4 >100 4 >100 - - - -
VACCINES 215 5 52 17 98 (8) 65 23
Hepatitis 113 (10) 42 7 50 (21) 21 (6)
Infanrix 46 20 10 88 25 12 11 8
ONCOLOGY & EMESIS 201 11 144 16 33 (2) 24 6
Zofran 135 13 94 18 24 6 17 3
Hycamtin 29 (1) 20 1 6 (11) 3 24
CARDIOVASCULAR 123 (3) 74 (12) 31 18 18 3
Coreg 40 23 40 23 - - - -
ARTHRITIS (Relafen) 49 (31) 43 (30) 4 (40) 2 (31)
DERMATOLOGICALS 67 (5) 10 (17) 15 (2) 42 (3)
OTHER 229 8 49 26 62 (11) 118 16
------------ ------------ ----------- -----------
TOTAL SALES 4,201 6 2,130 9 1,131 (1) 940 8
CONTINUING BUSINESS ------------ ------------ ----------- -----------
Divested products 103 (26) 44 (40) 10 (18) 49 (11)
Famvir 31 (23) 22 (25) 4 (27) 5 (10)
Kytril 48 (32) 21 (51) 6 (11) 21 (8)
Other 24 (15) 1 (40) - - 23 (14)
------------ ------------ ----------- -----------
TOTAL 4,304 5 2,174 7 1,141 (1) 989 7
PHARMACEUTICAL
SALES ============ ============ =========== ===========
FINANCIAL REVIEW - PROFIT AND LOSS
==================================
Pharmaceutical sales by therapeutic area
----------------------------------------
GSK pharmaceutical sales in 2000 amounted to £15,429 million, compared
to £13,618 million in 1999, an increase of 10 per cent. Excluding the
sales of divested products (products divested in 2000 to fulfil
regulatory conditions for approval of the GW/SB merger), sales growth
of the continuing business was 11 per cent. The growth was
substantially all volume increase, with only a minor net increase from price.
Sales of new products (those launched in a major market within the
last five years) were £2,646 million, representing 17 per cent of
sales, compared to 12 per cent in 1999, and grew by 60 per cent.
Sales of franchise products (established products) were £8,077 million,
representing 52 per cent of sales, and grew by 11 per cent. Sales of
older products, now less actively promoted, were £4,259 million,
representing 28 per cent of sales, and declined by 8 per cent.
In the fourth quarter 2000 pharmaceutical sales growth was 5 per cent
(excluding divested products, 6 per cent). Sales growth in the USA
was affected by the impact of wholesaler stocking in the third quarter
2000 in anticipation of price increases. Key products, such as Paxil,
Augmentin and Wellbutrin, achieved significantly higher growth in
prescription volume than in reported sales, indicating that underlying
business performance remained strong. Sales growth in Europe was
affected by generic competition and mild 'flu-season demand for anti-
bacterial products.
Central nervous system
----------------------
In the anti-depressant sector sales of £2 billion were achieved, with
strong growth of Seroxat/Paxil and Wellbutrin contributing to growth
of 17 per cent. In the important US market, Seroxat/Paxil was
supported by a successful direct-to-consumer (DTC) campaign and
promotional efforts also enabled Wellbutrin to increase its market
share. Both products benefited from overall growth in the US anti-
depressant market. New Drug Application (NDA) dossiers for Paxil as a
treatment for generalised anxiety disorder and for post traumatic
stress disorder were filed with the US Food and Drug Administration
(FDA) in 2000. Paxil was launched in November 2000 in Japan as the
only once-a-day selective serotonin reuptake inhibitor for treatment
of both depression and panic disorder.
The migraine portfolio of Imigran/Imitrex and Naramig/Amerge grew by 5
per cent. This reflects a return to growth in the USA, which accounts
for three quarters of sales, where DTC marketing campaigns and
migraine awareness programmes were instrumental in increasing sales.
In Europe sales were stable, with strong growth in France offsetting
declines in other markets. Imigran was launched in Japan in April 2000.
Sales of Lamictal, the epilepsy treatment, grew strongly worldwide and
particularly in the USA where greater market penetration was achieved
in an expanding market. Requip, for the treatment of Parkinson's
disease, now marketed in 20 countries, increased sales by 20 per cent,
benefiting from the positive outcome of a five year comparative study
published in May 2000. In the smoking cessation market, Zyban's
growth of 54 per cent reflects its rollout into European markets
following European Union approval in April 2000. Initial sales were
particularly strong in the UK and Germany.
Respiratory
-----------
Flixotide/Flovent continues to be the world's highest selling asthma
medication and is also indicated for chronic obstructive pulmonary
disease (COPD). Sales increased by 29 per cent, notably in the USA
where DTC promotion and an expanding market led to a 57 per cent
increase in sales. In Europe, where the Group's new combination
product, Seretide, has been launched in most markets, sales of
Flixotide were maintained despite Seretide's success. Serevent grew
by 8 per cent. Again growth was particularly strong in the US market,
where Seretide has yet to be launched.
Seretide, the new combination of Flixotide and Serevent, continues to
be successfully rolled out in markets around the world, generating
sales of over £200 million in 2000. Significant new markets in 2000
included Spain, Italy and Australia. In the UK and Germany, where
Seretide has been available for over a year, it continues to make
strong gains in market share. Launch in the USA under the name Advair
is planned for April 2001. Approval was received at the end of 2000
to market the product in the European Union in the metered dose
inhaler delivery device.
Whilst there is an impact on sales of Flixotide and Serevent from the
introduction of Seretide, both continue to be leading asthma
medications as individual products. Combined sales of Flixotide,
Serevent and Seretide increased by almost one third, indicating their
collective strength. In total, anti-asthma/COPD sales grew by 16 per
cent. This reflects the strong performance of Flixotide, Serevent and
Seretide, offset by declining sales of the older asthma products,
Ventolin and Becotide, as patients convert to newer products.
In the rhinitis sector, growth of Flixonase/Flonase is similarly
offset by decline in the older product, Beconase. Overall, the Group's
products in this sector grew by 12 per cent, supported by DTC
advertising in the USA, where over two thirds of sales are made.
Anti-bacterials
---------------
Sales of anti-bacterial products increased by 2 per cent, with growth
in Augmentin offset by flat sales of Zinnat/Ceftin and Amoxil and a
decrease in Fortum.
With sales reaching £1.2 billion, Augmentin continued to perform
strongly. In the USA sales grew 13 per cent, with a market share of
nearly a quarter. Solid growth was achieved in Latin America and
South East Asia. In Europe sales were affected by generic competition.
Zinnat/Ceftin declined by 7 per cent in its largest market, the USA,
but this was offset by growth in the emerging markets of the Middle
East, Africa, Latin America and Asia Pacific.
Anti-virals
-----------
Growth in anti-viral sales of 14 per cent reflects strong growth in
the HIV franchise, where the Group markets a range of reverse
transcriptase inhibitors (RTIs) and a recently launched protease
inhibitor, Agenerase, as well as steady growth in sales of herpes
products and continued uptake of new products against other viral diseases.
Sales of RTIs increased by 12 per cent. Combivir again grew strongly,
reflecting conversion of patients from its constituent single
products, Epivir and Retrovir. In aggregate the three products
achieved real growth of 5 per cent; excluding the effect of one-off
contracts in Brazil in 1999 which were not repeated in 2000,
underlying growth was nearer 8 per cent. The newer RTI, Ziagen, grew
by 75 per cent, reflecting continued uptake in the USA and in Europe.
Trizivir, which combines Epivir, Retrovir and Ziagen, was launched in
the USA in December 2000 and in the European Union (the UK and France)
in January 2001. The triple combination tablet simplifies the dosing
regimen for patients who are often taking several tablets a day.
The new protease inhibitor, Agenerase, also benefits from a relatively
simple dosing regimen. The majority of its sales were in the USA,
where it has been available since May 1999. European Union approval
was received in October 2000, and the product was launched in some
markets, including the UK and France, before the end of the year.
The Group's two herpes treatments, the newer Valtrex and the older
Zovirax, grew at a combined rate of 5 per cent. Valtrex continues to
protect the Group's franchise in this area, with strong increases in
all regions and a successful launch in Japan in August. Zeffix, for
chronic hepatitis B, achieved sales of £70 million. First launched in
the Asia Pacific region, it performed strongly in the Chinese and
South Korean markets. Relenza, the new influenza treatment, doubled
its sales to £32 million and, following launch in Japan in December,
is now available in most major markets.
Metabolic and gastro-intestinal
-------------------------------
Avandia, GSK's new treatment for Type 2 diabetes, achieved sales
approaching half a billion pounds, the majority in the USA, where it
was first launched in 1999. Avandia scrips now account for over half
of the US thiazolidinedione market, a market which grew by 75 per cent
in 2000. In April 2000 the US FDA approved Avandia in combination
with a sulphonylurea, having previously approved it both as a
monotherapy and in combination with metformin. Avandia will be rolled
out into Europe and Rest of the World markets in 2001. In August 2000
Avandia received a positive recommendation in the UK from the National
Institute for Clinical Excellence (NICE).
Zantac continues to decline in the face of competition from generic
products and alternative anti-ulcerant treatments. The rate of
decline slowed to 11 per cent in 2000. Zantac's largest market is now
Japan, where sales remained stable.
Lotronex, a treatment for irritable bowel syndrome, was launched in
the USA in March 2000 and generated sales of £36 million before being
withdrawn in November 2000 following discussions with the US FDA over
the interpretation of data relating to gastro-intestinal side effects.
The company disagreed with the FDA's assessment of the safety profile
of Lotronex, but agreed to withdraw it from the US market and has also
withdrawn all other regulatory submissions worldwide.
Vaccines
--------
Vaccines sales reached £842 million, an increase of 11 per cent. In
the hepatitis franchise, Engerix-B declined 8 per cent due to lower
sales in the USA, Havrix, for hepatitis A, grew slightly and Twinrix,
a combined hepatitis A and B vaccine in both adult and paediatric
strengths, grew 5 per cent to £95 million. Infanrix, GSK's range of
combination vaccines for diphtheria, tetanus, and pertussis (whooping
cough), grew 47 per cent. In October 2000 the European Commission
approved Infanrix PeNta, which provides additional protection for
hepatitis B and polio and Infanrix HeXa which further adds protection
against haemophilus influenzae type b disease.
Oncology and emesis
-------------------
Zofran, for emesis, a now well-established product and a leader in its
sector, benefited from market growth in the USA, where over two thirds
of its sales are generated.
Other therapeutic areas
-----------------------
Cardiovascular sales were stable, with 11 per cent growth in Coreg and
recent launches of Pritor for hypertension in European markets
offsetting declines in older products. Future sales should benefit from
new data showing Coreg's effectiveness in treating severe heart failure.
The disposal of the anaesthesia franchise in the USA at the end of
1999 contributed to a fall in this therapeutic area of 21 per cent.
In October 2000, GW's US company also disposed of its portfolio of
dermatological products, contributing to the 4 per cent decline in
this sector.
Pharmaceutical sales by geographic area
---------------------------------------
2000
---------------------------
% of total £m CER%
---------- ------ ----
USA 50 7,705 15
Europe 28 4,268 6
France 786 10
UK 701 (2)
Italy 574 10
Germany 482 3
Spain 424 6
Central & Eastern Europe 472 6
Other Europe 829 6
Rest of World 22 3,456 8
Asia Pacific 1,049 12
Japan 832 5
Latin America 682 2
Middle East & Africa 511 12
Canada 382 10
---------- ------ ----
TOTAL PHARMACEUTICAL SALES 100 15,429 10
========== ====== ====
USA
---
Sales in the US market, representing half of total Group
pharmaceutical sales, grew by 15 per cent.
Avandia, launched in June 1999, achieved sales of £433 million and is
the market leader in its class. It benefited from the withdrawal of a
competitor product from the market in the first quarter of the year.
Respiratory sales increased by 26 per cent, reflecting in particular
increased acceptance of inhaled steroids in the treatment of asthma.
The planned launch of Seretide in April 2001 will further enhance the
potential of the Group's range of asthma treatments.
CNS sales increased by 15 per cent. In the growing anti-depressant
market, DTC campaigns focussing on social anxiety disorder helped
Paxil to grow by 18 per cent. In the migraine portfolio growth of
5 per cent reversed the decline seen in the previous year, reflecting
the promotional efforts in 2000 and some overall expansion in the market.
Lamictal, although a smaller product, contributed significantly
to growth as its sales increased by 34 per cent.
In the anti-viral sector, HIV sales grew by 16 per cent, reflecting
continuing growth in the established products and uptake of the newer
products: Ziagen, Agenerase, and initial sales of Trizivir together
generated over £150 million in sales. Approval to market Trizivir was
received in November 2000. In the herpes sector strong sales of
Valtrex benefited from the convenience of its once-daily dosage form
and from its wider usage as a long-term herpes suppression therapy.
Strong growth in sales of Augmentin and Amoxil offset declines in
Ceftin and Fortum, enabling sales in the anti-bacterial area to
outperform market growth. Augmentin benefited from increased
prescriber awareness of its effectiveness against bacteria resistant
to other antibiotics.
There was a minor impact on sales growth from product disposals: the
anaesthesia portfolio in 1999 and the dermatological range in October
2000. Lotronex, for irritable bowel syndrome, achieved sales of £36
million in 2000 prior to its withdrawal from the market.
Europe
------
Sales in Europe, representing 28 per cent of the Group's
pharmaceutical sales, grew by 6 per cent.
In France, GSK's largest market within the region, sales grew
strongly, reflecting growth in the HIV portfolio and in the asthma
franchise; the launch of Trizivir and Seretide in January 2001 add to
sales potential. In the major markets of Italy, Germany and Spain,
Seretide was a key contributor to growth. The UK market benefited
from increased sales of Seretide and a successful launch of Zyban, but
overall sales declined slightly due to generic competition and
parallel trade.
The success of Seretide in those markets where it has already been
launched contributed to a 10 per cent growth in the asthma/COPD range,
while growth in Lamictal and launches of Zyban contributed to 16 per
cent increase in total CNS sales. Sales of HIV products increased by
18 per cent, a combination of solid growth in the established product
range and uptake of the recently launched Ziagen. Sales of Infanrix,
the combination vaccine for children, grew by over a third, with
recent approvals for Infanrix PeNta and Infanrix HeXa offering further
potential for growth. In the cardiovascular area, the launch of
Pritor led to a 19 per cent increase in sales. Offsetting these
strong performances were a decline in sales of Augmentin, due to a
mild 'flu season and the impact of generic competition in the UK and
Germany, and the continuing decline in Zantac. Avandia was launched
in the UK and Germany in late 2000 and is expected to be launched in
other European markets in 2001.
Rest of World
-------------
Overall growth of 8 per cent reflects a mix of double digit growth in
Asia Pacific, Middle East and Africa, and Canada, with slower growth
in Japan and Latin America.
In Asia Pacific, the markets principally contributing to sales growth
were Australia, the area's largest market, with launches of Seretide
in August and Zyban in November, and China, where Zeffix, launched in
1999, was the key factor in sales growth of 20 per cent.
In Japan, the Group's second largest market, sales grew by 5 per cent.
Sales of asthma products grew by a quarter, and the launch of Paxil in
November and Relenza in December together added £19 million to sales.
This was offset by a decline in sales of antibiotics.
In Latin America, overall sales growth of 2 per cent was affected by
difficult conditions in Brazil. Excluding Brazil, sales in the region
grew by 10 per cent. In Mexico, the Group's largest market in the
region, sales grew by 14 per cent, with good performances in most
therapeutic areas and particularly in vaccines. In Brazil sales were
affected by a government drive to promote generic products and by the
impact of HIV contracts in 1999 which were not repeated in 2000.
The Middle East and Africa region grew by 12 per cent, with notable
increases in HIV products and in antibiotics.
In Canada sales grew by 10 per cent reflecting strong growth in Paxil
and recent launches of Seretide and Avandia. The rest of the
asthma/COPD range and Wellbutrin also contributed to growth, while
Zyban declined by 13 per cent.
Consumer Healthcare sales
-------------------------
Q4 2000 2000
-------------- -------------
£m CER% £m CER%
----- ---- ----- ----
OTC medicines 416 (7) 1,454 (1)
Oral care 166 3 642 6
Nutritional healthcare 137 16 535 9
----- ---- ----- ----
Total sales continuing business 719 (1) 2,631 3
Divested products 6 18 19 73
----- ---- ----- ----
Total Consumer Healthcare sales 725 (1) 2,650 3
===== ==== ===== ====
GSK Consumer Healthcare sales in 2000 amounted to £2,650 million,
compared to £2,546 million in 1999, an increase of 3 per cent.
OTC medicines
-------------
Sales growth in vitamins and naturals and in dermatologicals was
offset by declines in other categories, notably in smoking control.
Gastro-intestinal sales were affected by lower sales of Tums in the
competitive US market. Analgesics were affected by the voluntary
recall of Panadol in Australia, a key market, following a tampering
threat.
Smoking control sales declined 8 per cent, reflecting competition in
the US market following the introduction of private label Nicotine
Replacement Therapy (NRT) gum and patch. The introduction of two new
GSK smoking control products in the US market, Clear NicoDerm Patch
and Nicorette Orange Gum, prevented further inroads from private label
brands. Excluding the USA, smoking control sales grew by 58 per cent.
Oral Care
---------
Sales of Aquafresh toothpastes and toothbrushes increased by 13 per
cent, notably in the USA and in Rest of the World markets. This was
offset by declines in other oral care brands. In Western Europe, GSK
continues to hold the number one oral care ranking.
Nutritional Healthcare
----------------------
Strong sales growth was achieved across the nutritional healthcare
range. Sales of Lucozade benefited from strong growth of Lucozade
Sport in the UK.
Block Drug
----------
In January 2001 GSK acquired Block Drug, the manufacturer of Sensodyne
toothpaste and other oral healthcare and consumer products. The
acquisition will extend the Consumer Healthcare product range and is
expected to enhance sales performance.
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