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GlaxoSmithKline’s Global Pharmaceuticals Business in 3Q17

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Global Pharmaceuticals segment

GlaxoSmithKline’s (GSK) Global Pharmaceuticals business includes products from the Respiratory franchise, Immuno-inflammation franchise, and Established Products portfolio. The Global Pharmaceuticals business reported revenues of 3.1 billion pounds during 3Q17.

The chart below compares revenues for several of the key products in GSK’s Global Pharmaceuticals business.

Immuno-inflammation franchise

GSK’s Global Pharmaceuticals business includes the Immuno-inflammation franchise, which is led by Benlysta. Sales for Benlysta rose 27.0% to 94.0 million pounds during 3Q17. These sales include 24.0% growth in revenues at constant exchange rates and 3% growth in revenues due to the positive impact of foreign exchange.

Benlysta’s US sales increased by 29% to 85 million pounds, while the sales in European markets increased to 7 million pounds, offset by 33% decline in international sales to 2 million pounds during 3Q17.

Respiratory franchise

GlaxoSmithKline’s Respiratory franchise includes the Ellipta portfolio, Avamys/Veramyst, Flixotide/Flovent, Nucala, Seretide/Advair, and Ventolin. The Respiratory franchise reported revenues of ~1.6 billion pounds during 3Q17, reflecting 1% growth compared to its 3Q16 revenues. This growth includes flat operating revenues and 1.0% growth due to the positive impact of foreign exchange.

The franchise’s US sales rose 1.0% to 813.0 million pounds, while the sales in the European market rose 2.0% to 334.0 million pounds. The franchise’s international sales rose 2.0% to 464.0 million pounds during 3Q17.

The Respiratory franchise’s growth was driven by strong sales of Anoro Ellipta, Arnuity Ellipta, Incruse Ellipta, Nucala, and Relvar/Breo Ellipta. Its growth was substantially offset by lower sales of other drugs in the franchise.

Established Pharmaceuticals franchise

The Established Pharmaceuticals franchise reported revenues of ~1.4 billion pounds during 3Q17, a 4.0% decline in revenues compared to 3Q16. The Established Pharmaceuticals franchise’s revenues declined due to lower sales of Avodart following its loss of exclusivity. Lower sales of Eperzan/Tanzeum, Imigran/Imitrex, Requip, Serevent and Zeppix during 3Q17 also affected the franchise’s sales.

The franchise’s declining revenues were substantially offset by strong sales of its dermatology products, particularly Augmentin, Coreg, Lamictal, and Valtrex. These revenues were also impacted by the divestments of the Romanian distribution business during 4Q16 and its anesthesia and thrombosis businesses to Aspen during 1Q17.

The Vanguard FTSE Europe ETF (VGK) holds 12.3% of its total assets in healthcare companies. VGK holds 0.8% in GlaxoSmithKline (GSK), 0.8% in AstraZeneca (AZN), 1.0% in Sanofi (SNY), and 1.8% in Novartis AG (NVS).

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