GSK Annual Report 2002

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66 GlaxoSmithKline Operating and financial review and prospects 2001 Year In accordance with US SEC disclosure requirements, the following discussion compares results for the year to 31st December 2001 with the results for the year to 31st December 2000. Exchange On average during 2001 sterling exchange rates were weaker against the US dollar and the Euro and stronger against the Yen compared with 2000. In aggregate, currency movements in 2001 compared with 2000 had a net favourable effect on sterling results of two per cent in respect of sales and five per cent in respect of business performance earnings per share. Pharmaceutical sales Total pharmaceutical sales in 2001 were £17,205 million compared to £15,429 million in 2000, an increase of nine per cent. On a like for like basis, if sales of products divested in 2000 as part of the regulatory approval for the merger of Glaxo Wellcome and SmithKline Beecham were excluded, sales grew 12 per cent from £14,982 million in 2000. Approximately one per cent of this overall growth came from price increases. Within GlaxoSmithKline’s existing portfolio, sales of new products, those launched in a major market within the last five years, accounted for 22 per cent of total sales and grew by 48 per cent to £3,709 million. Sales of the more established, franchise products amounted to £9,481 million representing 55 per cent of total sales and growth of 11 per cent compared to last year. Older products, less actively promoted, at £4,015 million accounted for 23 per cent of total sales, and declined by seven per cent. Pharmaceutical sales growth in the fourth quarter of 2001 was 12 per cent to £4,719 million, with sales in the USA contributing £2,466 million; a growth of 15 per cent. Although US wholesaler buying patterns distorted some product sales, total reported sales growth was in line with underlying demand as indicated by prescription data. In Europe sales improved five per cent to £1,228 million, and in International sales improved 13 per cent to £1,025 million. Pharmaceutical sales by therapeutic area Central nervous system This major therapeutic area in GlaxoSmithKline’s portfolio recorded a sales growth of 16 per cent. Seroxat/Paxil and Wellbutrin drove sales growth in the anti-depressant sector up 20 per cent. In April 2001 Paxil was approved by the US FDA for the treatment of generalised anxiety disorder (GAD) and in December for the treatment of post-traumatic stress disorder (PTSD). Seroxat/Paxil is now approved in 28 countries for the treatment of GAD and in 20 countries for the treatment of PTSD. Wellbutrin sales were driven by US sales growth of 37 per cent, as a result of increased awareness amongst physicians of its efficacy and favourable side effect profile in non-anxious depressed patients. In the migraine sector the successful launch in Japan of Imigran Tablets 50, where this treatment had previously been available only as an injection, helped Imigran/Imitrex sales grow by four per cent. Lamictal for the treatment of epilepsy grew strongly as did sales of Requip for Parkinson’s disease. Zyban the smoking cessation product was launched in France. Respiratory The successful launch of the asthma treatment Seretide/Advair in the USA and in a number of further countries in Europe and International helped boost sales growth. This product, a combination of Flixotide/Flovent and Serevent, is available in 36 countries. Worldwide sales of Seretide/Advair exceeded $1 billion in 2001. In the USA three million prescriptions were written in the nine months following its launch in April 2001. The speed at which patients adopted Seretide/Advair in the USA made it one of the most successful pharmaceutical product launches ever. Seretide/Advair was GlaxoSmithKline's largest product in Europe with sales of £441 million in 2001. An application for the EU registration of Seretide for the treatment of chronic obstructive pulmonary disease (COPD) was submitted in September. In January <strong>2002</strong>, an FDA Advisory Committee recommended approval of Advair and Flovent for the treatment of COPD associated with bronchitis. Flixotide and Serevent, as individual agents, are already approved in several countries for the treatment of COPD. As expected, sales of Flixotide/Flovent and Serevent declined in various markets due to the increased momentum of Seretide/Advair. Sales of Flixonase/Flonase, used in the treatment of perennial rhinitis, grew strongly. The older respiratory products Ventolin and Becotide continued to decline as patients converted to newer products. Anti-bacterials Although overall sales in anti-bacterials showed little growth, the broad-spectrum antibiotic, Augmentin, was still one of the highest selling products in the Group’s portfolio and achieved 13 per cent growth worldwide. Augmentin ES-600 (extra strength) was launched in the USA in October for the treatment of children with recurrent or persistent middle ear infections. A submission for FDA approval of Augmentin XR (extended release) was submitted but extra data and other information was requested by the FDA. ` Overall, sales of the older products, Zinnat/Ceftin, Fortum and Amoxil continued to decline, although sales of Zinnat/Ceftin grew in Central and Eastern Europe by 13 per cent. Anti-virals GlaxoSmithKline continued to expand its leadership in HIV/AIDS with a global market share of 40 per cent. Trizivir, GlaxoSmithKline’s new triple combination medicine for HIV/AIDS available in one tablet, was the key driver of growth in the HIV/AIDS franchise. It was launched in a number of key markets during the year including much of Europe, the USA and Canada. Sales of Combivir, which is a combination of Epivir and Retrovir, grew five per cent. The major growth markets were Japan, Asia Pacific, Middle East, Latin America and Africa. Sales of Ziagen increased five per cent. Approval was received for a paediatric indication in October for use in the EU. Ziagen had been approved already in more than 45 countries worldwide for the treatment of HIV/AIDS in adults. Sales of Zeffix, for hepatitis B, grew in all market regions. In the USA, Zeffix, where it is marketed under the name Epivir-HBV, was approved for the treatment of children over two years old in August.
Operating and financial review and prospects GlaxoSmithKline 67 Pharmaceutical sales by therapeutic area 2001 Therapeutic area/ major products Respiratory Flixotide/Flovent, Serevent, Seretide/Advair Seretide/Advair Flixotide/Flovent Serevent Flixonase/Flonase Ventolin Becotide CNS Depression Seroxat/Paxil Wellbutrin Metabolic and gastro-intestinal Avandia Zantac Oncology and emesis Zofran Hycamtin Cardiovascular Coreg 23 9 6 21 CER represents sales growth at constant exchange rates. * Vaccines Hepatitis Infanrix Arthritis (Relafen) Other Total sales continuing business Divested products Total pharmaceutical sales 5 Migraine Imigran/Imitrex Naramig/Amerge Lamictal Requip Zyban 20 – 3 1 5 646 350 296 103 2,128 1,347 167 606 302 55 167 50 10 14 >100 5 (5) (11) 5 (7) 5 42 (19) 49 616 242 374 70 1,899 1,145 7 562 309 61 154 52 11 11 >100 (1) (6) (9) (7) (21) 29 38 (1) 29 1,071 794 115 358 161 24 98 38 255 212 43 7 9 16 >100 4 (7) (13) 15 76 (5) 18 (17) 60 589 405 49 182 95 20 51 8 157 69 88 12 8 31 >100 50 4 (13) 66 >100 (7) 99 (24) 50 468 148 3 66 46 11 18 4 234 69 165 84 Anti-virals HIV Trizivir Combivir Epivir Retrovir Ziagen Agenerase Herpes Valtrex Zovirax Zeffix 100 100 * Total USA Europe International 4,007 2,504 1,857 647 849 758 91 355 75 129 3,537 2,410 850 915 645 504 306 161 2001 £m 838 601 90 591 251 156 916 17,205 – 17,205 948 445 238 1,480 707 505 16 20 16 37 5 4 15 20 25 11 24 38 >100 2 1 20 (9) (22) % CER growth 14 19 (9) 23 56 (29) (4) 12 – 9 10 (6) 36 10 46 (11) 2000 £m 2,789 1,710 208 880 622 408 343 205 3,279 2,002 1,550 452 782 705 77 289 58 115 710 491 95 463 148 210 1,086 14,982 447 15,429 842 462 171 1,232 462 575 17 37 (16) 40 52 >100 9 10 21 (10) – 14 20 13 37 2 1 15 23 31 (14) 17 21 (11) 30 56 (28) (62) 16 – 20 9 97 % CER growth 730 623 106 2,835 1,880 1,252 628 630 575 55 179 36 54 1,646 1,179 328 470 381 374 29 – 611 428 60 385 242 134 60 9,037 – 9,037 261 187 72 2001 £m (3) >100 (15) 13 24 >100 (15) (13) 19 (11) (20) 13 12 12 – 8 7 12 18 19 20 8 14 (5) (45) (2) 7 – – (14) 16 % CER growth 299 32 162 779 378 378 – 165 136 29 139 36 42 1,276 929 441 263 225 54 134 122 142 108 23 135 – 10 233 4,561 – 4,561 396 183 116 2001 £m 9 >100 (5) 16 38 >100 18 4 13 (8) (20) 34 40 41 27 33 34 25 12 35 67 9 14 (4) (2) 66 (22) 11 10 – 19 (15) 32 % CER growth 451 52 237 393 246 227 19 54 47 7 37 3 33 615 302 81 182 39 76 143 39 85 65 7 71 9 12 623 3,607 – 3,607 291 75 50 2001 £m 2,604 1,421 409 209 149 3 13 (7) (2) (26) 2,472 1,219 430 213 199 10 21 (17) (1) (44) 1,304 912 180 41 31 (1) (2) 6 3 (20) 702 322 123 92 50 (4) 6 (3) (7) (20) 598 187 106 76 68 Anti-bacterials Augmentin Zinnat/Ceftin Fortum Amoxil 12 15 % of total 0 2,500 3,000 3,500 2000 1,500 1,000 500 4,000
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Joint statement by the Chairman and
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04 GlaxoSmithKline Joint statement
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Products - Pharmaceuticals Descript
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Competition - Consumer Healthcare T
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Operating activities Marketing and
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37 Reconciliation to US accounting
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38 Principal Group companies Notes
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Financial record GlaxoSmithKline 14
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Investor information GlaxoSmithKlin
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Share capital GlaxoSmithKline 155 A
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Cross reference to Form 20-F GlaxoS
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Index A Access to healthcare 27 Acc
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Contact details INTERNET Informatio
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GSK Annual Report 2002

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