GlaxoSmithKline Net Jumps

The U.K. drugmaker posts a strong fourth quarter and sees an important year ahead.
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GlaxoSmithKline

(GSK) - Get Report

said Thursday that it delivered gains in fourth-quarter sales and earnings despite what its chief executive said was "a difficult year" due to generic competition.

The U.K.-based drug company reported a pretax profit of $2.59 billion, or 15 cents a share, on revenue of $9.9 billion for the three months ended Dec. 31. Using United Kingdom GAAP standards, revenue rose 3%, pretax profit rose 17% and earnings per share rose 15% for the quarter vs. the fourth quarter of 2003 on a constant exchange-rate basis.

For the fiscal year, corporate revenue rose by 1% to $37.3 billion, pretax profit rose 2% to $11.2 billion, while EPS rose 2%, based on a constant exchange rate and according to GAAP.

The company said earnings per share for 2005 are expected to grow "in the low double-digit range" on a constant exchange-rate basis.

"These results confirm the success with which GlaxoSmithKline navigated a difficult year, absorbing over $2.7 billion of lost sales due to generics, and still managing the grow the business," said J.P. Garnier, the company's chief executive.

He added that this year will be an important one for the company's experimental drugs in late-stage clinical trials or before regulatory agencies. For example, Garnier said he expects the Food and Drug Administration to decide this month on Requip for restless leg syndrome.

The company expects to seek regulatory approval this year or next year for a variety of compounds, including a drug aimed at combating certain cancer tumors, a migraine medication, a leukemia drug and a treatment for bacterial skin infections.

However, plans for seeking FDA approval of an arthritis drug are on hold until next week when the agency holds advisory committee hearings on the class of arthritis drugs known as COX-2 inhibitors. In addition, the company said an experimental obesity drug failed to demonstrate "sufficient efficacy" vs. competitors, so research has been cancelled.