GlaxoSmithKline hails drug pipeline after 2013’s China scandal

UK pharmaceutical company said it had 10 promising drugs and vaccines in late-stage development

GlaxoSmithKline has heralded the most productive year ever for its scientists, as it seeks to draw a line under a massive corruption scandal in China.

GSK, one of the UK’s largest companies, announced it had 10 promising drugs and vaccines in late-stage development, including oncology medicines and treatments to tackle respiratory problems.

The pharmaceutical giant unveiled its drugs pipeline as it revealed that turnover rose 1% to £26.5bn in 2013, while pre-tax profits inched up by 0.7% to £6.6bn. Sales continued to slide in its scandal-hit China division, but the pace of decline slowed down: drug and vaccine sales were down 18% in the final quarter of 2013, compared with a 61% drop in the previous quarter.

Chinese authorities have accused GSK of being a “criminal godfather”, running a £320m slush fund to bribe doctors and hospital officials with cash payments and visits to prostitutes, in order to sell its products.

GSK has reported itself to the Serious Fraud Office, as well as the US Department of Justice and the Securities and Exchange Commission, but said on Wednesday it was unable to estimate the final bill for the China scandal.

“I am obviously unhappy with what we have been accused of in China,” GSK’s chief executive Andrew Witty said. “We are working very closely with the Chinese authorities and respect the process. Obviously the timing of the process will be determined by them. I am pleased that the [China] business is stabilising and within the overall group you can see we have delivered a very robust performance.”

Although the Chinese corruption scandal has cast an unwelcome spotlight on its sales teams, GSK has been faring better in the lab. GSK won US approval for five new drugs last year, more than any of its rivals. In addition to the 10 medicines it hopes to run clinical trials for in 2014 and 2015, 30 more promising treatments are in the pipeline. Witty hailed respiratory medicines, Breo and Anoro, that had won approval in the US, as well as GSK’s Tivicay HIV medicine, and a vaccine for malaria the company plans to submit for approval this year, which Witty described as “a significant additional tool in the armoury against malaria”.

Speaking a day after BP’s boss said he did not want to see Scotland “drifting away” from the rest of the UK, Witty struck a more cautious note, saying he was “intensely neutral” on the question of Scottish independence. He added that GSK expected to increase investment in its two Scottish factories, in Montrose and Irvine, in the coming years.

He also batted away concerns about volatility in emerging markets, following recent currency turbulence in Argentina, Indonesia and Turkey. “The core fundamentals” of emerging markets, he said, citing their growing population, rising per-capita incomes and increasing demand for healthcare, all played well with GSK.

“We are prepared to take the short-term ups and downs, to take the long-term direction of travel the emerging markets undoubtedly have.”

Jennifer Rankin © 2014 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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