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LONDON (AP) — Britain-based drugmaker GlaxoSmithKline has reported a drop in earnings in the first full quarter since its deal to swap some assets with Swiss rival Novartis.
Second-quarter net income fell to 149 million pounds from 654 million pounds a year earlier, while sales rose 6 percent to 5.89 billion pounds.
CEO Andrew Witty described the performance as encouraging, with plans on track to integrate and restructuring operations it took over from Novartis in April. In the deal, GSK agreed to sell its cancer-drug business to Novartis in a swap for the Swiss company's vaccines business and cash.
Synergy benefits are expected when the transaction begins to contribute more meaningfully.
"We remain confident that we can achieve our targets for this year and return the group to earnings growth in 2016," he said.
Witty says the company's new pharmaceutical products offset declining sales of Advair, a major respiratory treatment whose U.S. patent has expired. GSK, the world's No. 7 drugmaker, has been trying to either grow or eliminate noncore investments to focus on their strengths amid pressure from generic drugmakers.
Those deals included GSK's products swap with Novartis.
GSK has underperformed most of the industry in recent years, with sales in China falling after a bribery scandal. It issued a profit warning this spring and suspended share buybacks.
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