GSK posts fall in profit and sales

Pharma firm hit by increased competition, supply chain problems and unfavourable exchange rates

The UK's largest pharmaceutical manufacturer GlaxoSmithKline has reported a 23% fall in pre-tax profit to £1.89 billion for the first half of the year.

The company's revenue also declined to £11.17 billion in the first half of the year, from £13.10 billion year-on-year.

The group reported a 10% fall in its drug and vaccine sales in the US, largely due to increasing competition from generic drugs, while European sales were flat.

Sales in GSK's consumer healthcare business, which includes the brands Sensodyne, Panadol and Aquafresh, fell 4% due to problems in supply chains.

The strong pound reduced the impact of overseas profits, the company said.

The company said it has more than 40 new molecular entities in late stage development. About 30 assets in R&D have potential to be first in class in areas such as respiratory, immuno-inflammation, epigenetics and cardiovascular, it added.

GSK hopes that a complex three-part transaction with rival Novartis will help improve its fortunes. The deal unveiled in May will see the two firms create a £6.5 billion consumer healthcare powerhouse, with GSK's Aquafresh and Beechams combined with antiseptic range Savlon and cough and cold brand Tixylix from Novartis.

The company has been at the centre of controversy in recent months. It has been at the subject of a bribery probe by Chinese authorities, and in May it was disclosed that its commercial practices had come under ''formal criminal investigation'' by Britain's Serious Fraud Office.