Glaxo boosted by HIV drug success

THE outgoing boss of GlaxoSmithKline said the drugs giant was ‘on the right track’ after a surge in sales and profits.

Sir Andrew Witty, who is standing down as chief executive of Britain’s biggest pharmaceuticals company in March next year, said a ‘strong’ start to the year ‘demonstrates the momentum we have across the group’.

Revenues rose by a better-thanexpected 11pc to £6.2bn in the first quarter of the year and core operating profits rose 19pc to £1.6bn.

The business was boosted by new product sales of £821m – up from £269m in the same period last year – driven in part by HIV drugs Tivicay and Triumeq.

There was also strong demand for lung drugs Breo, Anoro, Incruse and Nucala, and meningitis vaccines Menveo and Bexsero.

The encouraging performance will have come as a relief for Witty, who has been heavily criticised by investors for his management.

‘This puts us on the right track although inevitably we expect some volatility,’ said the 51-yearold, who oversaw the £14bn deal with Novartis last year to raise Glaxo’s exposure to consumer healthcare where it has brands including Sensodyne, Day & Night Nurse, Horlicks and Panadol.

Glaxo shares, which have risen by almost a third since Witty took charge eight years ago, ticked 2.1pc, or 30p, higher to 1488.5p.

Mick Cooper, an analyst at Trinity Delta, said: ‘These results are a welcome distraction from the endless debate on Sir Andrew’s successor. It has been good quarter.’

Tim Anderson, at Bernstein, said: ‘A rebound has started, if measured from the rather deep hole that had been dug.’

Glaxo is on the hunt for a new chief executive to replace Witty, who joined the company in 1985. Witty’s future has been in doubt for some time amid flagging sales and profits and questions over his focus on consumer health products such as headache pills.

Investors, including star fund manager Neil Woodford, a top 20 shareholder through Woodford Investment Management, have argued the company should focus on developing and selling drugs.

The London arm of Och-Ziff Capital Management, the activist hedge fund in New York, also called for a shake-up as Glaxo deals with the decline of its blockbuster asthma drug Advair.