Sales in Glaxo’s diabetes drug tumble

GlaxoSmithKline, the world’s second largest drug maker, said its diabetes drug, Avandia, had experienced a 56% fall in the first quarter of 2008 to £191 million.

Operating profit fell by 5% to £2.05 billion on a business performance basis, or by 9% to £1.96 billion on a statutory basis, with margins hit by higher spending on research and development and prices hit by generic competition.

Glaxo said yesterday it is on target to meet guidance for the year that it gave with 2007 results in February.

A report last May linked Avandia to increased heart attack risk. The pharmaceutical company insisted the drug was safe.

Chief executive, Jean Pierre Garnier who retires in May, said sales had levelled off. In the last six to eight weeks we have seen stability in the number of prescriptions written.

Sales of Advair, its treatment for asthma and chronic obstructive pulmonary disease, increased 10% to £954 million.

Mr Garnier said it had been a good quarter for the development of the group’s pipeline of new products which was now very impressive with two important drugs gaining approvals.

The drugs giant has bid for Sirtris Pharmaceuticals in a deal worth £362 million. Sirtris, which is listed on Nasdaq and based in Massachusetts, has recently discovered a class of enzymes which are believed to be involved in the ageing process.

Talking about the bid, Mr Garnier said GSK was acquiring a technology which we feel is of great promise. However, he said it would do nothing for GSK’s profits in the short term.

Other pharmaceutical giants have reported mixed results over the last few days, reflecting a global slowdown in sales and a squeeze on margins.

Last week, investors disposed of their pharmaceutical shares following disappointing sales or outlooks from Forest Laboratories, Pfizer and Roche.

Profits at Merck, Novartis and Wyeth are expected to suffer due to competition from cheap generics.

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