GSK reports higher profit, sales

GlaxoSmithKline reported stronger first-quarter profit, as the British drugmaker boosted sales of its flu vaccine, Advair asthma medicine and other products.

The company's net income rose about 19 percent from a year earlier to $2.04 billion, beating analysts' expectations.

GSK is the largest pharmaceutical company in the Triangle, with about 5,000 employees at its North American headquarters in Research Triangle Park and a manufacturing plant in Zebulon.

The company reported some signs of recovery for its U.S. pharmaceuticals business, with sales down 1 percent compared to a 24 percent drop in the same quarter last year. Growth was much stronger outside of the U.S., with sales up 45 percent in Asia Pacific, 43 percent in emerging markets and 16 percent in Europe.

GSK has been cutting thousands of jobs worldwide to offset slowing sales, especially in the U.S. And in February, the company announced it was cutting research on depression and pain treatments to focus on more promising therapies for Alzheimer’s and Parkinson’s diseases and multiple sclerosis.

"GSK has made a good start to 2010 and this provides further confirmation that our strategy is working," said CEO Andrew Witty. "[We] remain confident of our prospects for the year."

The results eased fears among investors as GSK faces the threat of generic medicines stealing more business, Gbola Amusa, an analyst at UBS in London, told Bloomberg News.

“It was a solid set of numbers and if anything somewhat boring,” Amusa said  “A solid and boring quarter in a way is very good because it tells the market that all these concerns are overblown.”

Costs resulting from President Barack Obama’s health-care overhaul have prompted rivals such as Eli Lilly, Johnson & Johnson and Abbott Laboratories to cut 2010 sales forecasts. GSK said its cost-cutting efforts will allow it to offset any financial hit from increased drug discounts under the Medicaid and Medicare programs.

GSK's American depositary receipts, similar to common shares for foreign companies, fell 26 cents today to $37.30. The stock is up 22 percent in the past year.

Get GSK's full results and watch videos of Witty discussing the earnings online here.