Vaccine sales boost SmithKline Beecham

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The Independent Online
A DOUBLING in sales of the hepatitis B vaccine, Engerix B, helped SmithKline Beecham, the Anglo-American drugs company, to a 9 per cent increase in pre-tax profits in the first nine months of the year.

Sales of the vaccine, which is administered over 12 months and gives protection for 10 years, are approaching pounds 200m. The performance in the US was 'exceptional', helped by growing recognition of the importance of vaccination and the fact that a competitor was out of stock for part of the third quarter.

Profits before tax in the first nine months were pounds 804m, up from pounds 735m in the previous period, on turnover 9 per cent higher at pounds 3.7m. In the third quarter, profits rose 8 per cent to pounds 272m.

In the pharmaceuticals division, trading profits rose 9 per cent to pounds 567m in the nine months. The strong performance of Engerix B and other recently-launched drugs helped to compensate for the decline in sales of Tagamet, its ulcer treatment, which declined 4 per cent in the third quarter.

Seroxat, the anti-depressant, has taken a 23.7 per cent share of the market in Britain - where it was launched last February - putting it ahead of Prozac, a rival from Eli Lilly. Seroxat has just been approved by an advisory committee of the US Food and Drug Administration which means it could be available there next year. Relafen, the arthritis treatment, is now among the top three in the US.

Some US analysts are concerned about the effect on the US drug industry if Bill Clinton is elected president. He is thought to be planning a reform of the health service, which could include the introduction of price controls similar to those in Britain. But a SmithKline spokesman said: 'It would not change our position. We would continue to price our drugs in a responsible manner and to develop innovative products.'

Consumer brands were affected by the poor summer, which cut sales of soft drinks such as Lucozade, and the recession, but profits rose 2 per cent to pounds 168m. The results were also affected by the sale of the Italian toiletries business. The group has announced a partnership for over- the-counter medicines with Marion Merrell Dow, but this will not produce benefits until next year.

The clinical laboratories business was hit by Hurricane Andrew, which affected its laboratories in Miami and New Orleans, and profits in the third quarter were static at pounds 18m.

Earnings per share rose 12 per cent to 19.7p and the quarterly dividend is 2.075p. James Dodwell, pharmaceuticals analyst with County NatWest, is forecasting full-year profits of pounds 1.1bn, but he has increased his expected earnings from 267.1p to 27.4p because of a lower tax charge. The shares gained 15p to 527p.

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