Glaxo Shifts Its Focus to Cancer Drugs -- WSJ
07 Febrero 2019 - 02:02AM
Noticias Dow Jones
By Denise Roland and Carlo Martuscelli
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 7, 2019).
GlaxoSmithKline PLC said it expects profit to fall this year as
it boosts spending on developing new cancer drugs and faces generic
competition for its best-selling inhaler product for the first
time.
The British pharmaceutical giant on Wednesday reported upbeat
full-year earnings but warned that adjusted earnings per share -- a
measure closely watched by analysts -- could fall by 5% to 9% in
2019.
Glaxo, under pressure from investors to replenish its pipeline,
is determined to bolster its presence in the competitive cancer
market, focusing on drugs designed to aid the body's immune
response to tumors.
The company gained a foothold in the oncology market in December
with its $4.16 billion acquisition of Tesaro, which sells ovarian
cancer drug Zejula. The deal also added several research programs
to Glaxo's pipeline. But Glaxo has said it expects the deal to
weigh on earnings for the next two years as it absorbs costs
related to the transaction and ramps up research investment.
Many drug companies are doubling down on cancer research, driven
by recent advances in the field, and the promise of big winnings
for those who succeed.
Glaxo, a relative minnow in cancer medicine, is set on gaining a
toehold in this lucrative market. "It is very competitive and it is
expensive to invest in, but what matters is choosing right assets
to back and pursue, " Chief Executive Emma Walmsley said on a call
with reporters Wednesday.
Ms. Walmsley said Glaxo's cancer pipeline had doubled in size to
16 drugs since July. The increase was driven by the Tesaro deal and
a separate agreement announced Tuesday to collaborate with Merck
KGaA on an experimental cancer therapy in the German drugmaker's
pipeline.
The company's push into cancer treatments comes as it scales
back in other areas. Ms. Walmsley has cut dozens of research
projects and is also looking to eventually exit consumer health
care. In December, Glaxo announced a plan to combine its consumer
health-care unit with Pfizer Inc.'s and then spin off the joint
venture.
Glaxo's earnings also will be hit this year by the launch of a
generic version of its top-selling inhaler Advair. The U.S. Food
and Drug Administration last week said it had approved Mylan's
version of the drug. Revenues from Advair have declined in recent
years because of increased competition from other products, but it
is still one of the company's biggest-selling drugs, generating
GBP2.4 billion ($3.1 billion) in 2018.
Glaxo provided the earnings outlook as it reported a 2% rise in
sales to GBP30.8 billion for 2018 and a 7% increase in adjusted
earnings per share to 119.4 pence.
The results, which beat analyst expectations, sent Glaxo's share
price up 1.5% Wednesday afternoon.
Sales from its pharmaceuticals division were up 2% at constant
exchange rates for the year, with growth in all therapy areas. HIV
drugs were its fastest-growing segment in the division, with sales
up 11% at constant currencies.
Vaccines sales grew by 16% at constant currencies, driven by its
shingles shot Shingrix. The medicine was in high demand in 2018 and
Glaxo has previously reported shortages, forcing it to ration
doses.
The company said it expects to declare a full-year dividend of
80 pence per share in 2019 -- in line with the year before.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
February 07, 2019 02:47 ET (07:47 GMT)
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