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GSK CEO: 'Very committed' to China despite probe

GlaxoSmithKline's chief executive Andrew Witty has reiterated the company's commitment to the Chinese market, despite a high profile corruption investigation there, as the pharma giant announced disappointing sales results.

GSK's problems in China were one of several factors hitting the company's sales in the first half of 2014. These included: tougher pricing on its biggest-seller, asthma treatment Advair; slow uptake on Advair's replacements, and the strength of its reporting currency sterling.

Peter Parks | AFP | Getty Images

GSK's share price plunged immediately following the announcement of its second quarter results on Tuesday, as the pharma giant's chief executive Andrew Witty conceded: "It is now unlikely that we will deliver sales growth this year." In April, the company forecast core earnings growth of 4-8 percent for the year.

The company announced turnover of £5.6 billion, down 4 percent from the same time in 2013, and core earnings of 19.1p, down 12 percent and below the 22p forecast on average by analysts.

The results were "worse than expected" and imply "earnings per share cuts of more than 5 percent, with even the more cautious observers likely to cut," Mark Clark, analyst at Deutsche Bank, warned in a research note.

The Chinese investigation hit emerging markets pharmaceuticals and vaccines sales growth by around four percentage points, with sales in China down 25 percent to £129 million.

Witty expressed confidence in the new management team GSK has installed in China, but said he was "not at liberty" to comment on the specifics of the investigation. He added that the allegations and are "contrary to the values I believe in."

GSK is under investigation both by Chinese authorities and the U.K.'s Serious Fraud Office following the allegations of bribery by its employees, and may be facing fines as a result.

The company said "it is not possible at this time to make a reliable estimate of the financial effect, if any, that could result from these matters," in a statement.

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