After Q1 sales slip, GSK seeks to reassure investors

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GlaxoSmithKline ended the first quarter of the year with sales dipping to $10 billion, 2% less than in the same period last year. US sales slipped 5%, to $3.4 billion. The US slide was second to Japan, where sales fell 6%, to $780 million. US pharmaceuticals and vaccines sales fell 6% during the quarter, to $3 billion, again, second to Japan where sales fell 8%.

The company attributed part of the stark contrast in performance to a high 2012 bar, and said pharmaceutical sales were also hurt by the end of the co-promotion agreement for bladder drug Vesicare in Q1 2012. Respiratory sales, meanwhile, grew 9% during the quarter. Higher prescription numbers drove US Advair sales to a 5% increase over the same period last year, while respiratory drugs Flovent and Ventolin also saw a growth spurt in US sales. None of this growth was mirrored in Europe.

The company said in February that the year was going to be a foundational one, and CEO Andrew Witty said in a statement that this quarter's performance was in line with these expectations.

Jefferies analyst Jeffery Holford titled his take on the company's sales recap “Spin Doctors,” noting that GSK's recent move to create a Global Established Products portfolio “looks like a precursor to a spin-off.”

In addition to touting its hopes for the future, GSK also called attention to an FDA advisory panel's endorsement of its experimental COPD treatment, Breo. The regulator is expected to deliver a decision within the next month, but analysts have expressed tempered enthusiasm for its potential for two reasons: physician and patient satisfaction with GSK's Advair, and the likelihood that the COPD medication does not have an asthma indication in its future.

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