on Thursday issued a third-quarter financial report whose results were sufficiently strong that the British drug giant raised its full-year earnings-per-share estimates.
Without providing specific numbers, the company lifted its EPS growth rate-percentage prediction to the midteens from the "low double digits." GlaxoSmithKline said third-quarter sales of $10.1 billion topped by 9% the revenue from the same period last year when measured at a constant exchange rate. The profit of 39 cents a share beat last year's third quarter by 16%.
Tim Anderson of Prudential Equity Group says that although GlaxoSmithKline's results beat his prediction and the Wall Street consensus, the margin of victory was "mainly from asset sales." In a Thursday research note, he indicates that otherwise pretax income "would actually have come in below our forecasts."
Anderson has an underweight rating on the stock. He doesn't own shares, and his firm doesn't have an investment banking relationship.
Investors didn't mind. GlaxoSmithKline's shares were up $1.96, or 4%, to $51.32 on volume that was double the daily average for the past three months. GlaxoSmithKline is the second-largest seller of prescription drugs in the U.S.
The company's performance was paced by its asthma drug Advair, whose worldwide sales rose 20% to $1.3 billion vs. the same period last year. Sales of the Avandia and Avandamet diabetes drugs increased 22% to $637 million, and at the vaccines business sales advanced 20% to $721 million.
GlaxoSmithKline is expanding its vaccine efforts by buying plants and adding to existing capacity, as well as by acquiring the Canadian vaccine-maker
. The proposed $1.4 billion takeover is expected to close later this year or early next year. In July, GlaxoSmithKline bought the vaccine technology company
for $270 million.
The company said it's adding capacity partly in order to produce more vaccine for a flu pandemic. The company is developing a prototype vaccine for the avian flu, and clinical testing will begin soon. The results should be available during the second quarter of 2006.
GlaxoSmithKline also said it's trying to expand manufacturing capacity for Relenza, an inhaled antiviral drug to lessen the effects of influenza in people who exhibit symptoms for no more than two days. The company said it's considering seeking partners to help it make more Relenza.
Later this year, it expects to file applications with European and U.S. health regulators to approve Relenza as a flu prevention drug.