GSK optimistic as sales beat forecasts
GlaxoSmithKline (GSK) said sales rose five percent in the fourth quarter of last year, narrowly beating expectations and indicating that the U.K. pharmaceutical giant's fortunes may be picking up.
GSK reported fourth quarter turnover of £6.91 billion ($11.3 billion), topping analysts' forecasts of £6.84 billion. While for the full-year 2013, sales rose 1 percent to £26.5 billion, in line with analysts' expectations.
Fourth quarter core operating profit fell 8 percent to £2.09 billion.
Looking ahead, the company said it expected sales in 2014 to rise by around 2 percent at constant exchange rates (on an ex-divestment basis).
GSK's CFO Simon Dingemans told CNBC there had been good progress across the company in 2013, "despite some unexpected headwinds."
Last year proved to be a tough one for GSK, with a bribery scandal involving Glaxo executives in China weighing on results.
Its reputation in the world's second-biggest economy was hit after China alleged that Glaxo sales executives had bribed officials and doctors to the tune of millions.
Consumer healthcare sales fell 23 percent in China, mainly due to a reduction in sales of cold medicine Contac and painkiller Fenbid. Chinese pharmaceutical and vaccine sales fell 18 percent.
"The investigation is still ongoing," Dingemans said. "However you need to put that China business in context. China today represents about 2 percent of our (total) sales base and the rest of our emerging market business is still contributing very strongly across the board."
(Read more: Why GSK sales shift isa turning-point for pharma)
While Ishaq Siddiqi, market strategist at ETX Capital, added: "The scandal certainly drove (the fall in sales) but it seems GSK is now looking to put that episode behind them... but investors will continue to express their hesitancy until litigation cases are brought forward and GSK officially moves past the incident and restores reputational damage."
(Read more: China in new era of corporate crackdown)
Glaxo has since announced that by 2016 it will cease paying healthcare professionals to speak at, or attend, medical conferences —an industry-wide practice. It is also removing individual sales targets for its employees.
More generally, 2013 was a good one for the industry, with the number of new drug and treatment approvals starting to rise after years of decline.
Glaxo itself has several potential "blockbuster" drugs, which are due to be launched in the near-term. There are also several late-stage drugs reaching maturity this year.
"As we look back at 2013, the most notable thing is the R&D approvals we've had, which position us very well for the future and give us the confidence behind the guidance that we've given for 2014," Dingemans added.
Shares of Glaxo traded 2.2 percent higher on the London Stock Exchange after it reported results.