Lackluster earnings bogged down a number of health stocks midweek, while others found solace in regulatory approvals and clinical data.
GlaxoSmithKline (GSK - Get Report) reported a disappointing quarter, facing tough generic competition in the U.S. and a decrease in sales of its diabetes drug Avandia. For the three months ended Sept. 30, GlaxoSmithKline said net profit fell 6% year over year to $2.68 billion, while revenue fell 2% to $11.02 billion.
In light of results, GlaxoSmithKline also announced a $3.1 billion program to cut costs, beef up research and development and streamline manufacturing. The company estimates this will result in annual pretax cost savings of up to $1.4 billion by 2010. It expects 40% of the $1.4 billion savings to come from manufacturing, 40% in sales and administration, and 20% in research and development -- though it didn't give a job-cut figure.
Shares fell 89 cents, or 1.7%, to $51.19. The stock is a component of the Amex pharmaceutical index, which edged down 3.35, or 1%, to 343.45.Also on the decline was Illumina (ILMN - Get Report), which said non-GAAP third-quarter earnings fell 12.8% to 34 cents a share. It beat Street estimates but fell in after-hours trading and then gave up $4.19, or 6.7%, to $58.19 in recent trading Wednesday. Looking ahead, the company raised fourth-quarter guidance to non-GAAP net income of $19 million to $21 million, or 32 cents a share to 35 cents a share.