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Pharmaceutical giant GlaxoSmithKline on Wednesday said group annual net profit more than doubled in 2018, largely on lower R&D and US tax costs.
Profit after tax soared to £3.62 billion ($4.69 billion, 4.12 billion euros) last year compared with £1.53 billion in 2017 as the multinational paid less tax under US President Donald Trump’s reforms.
GSK also slashed research and development (R&D) costs in 2018, its earnings statement revealed.
Annual revenue grew two percent to £30.82 billion.
‘GSK delivered improved operating performance in 2018 with group sales growth, strong commercial execution of new product launches, especially (shingles vaccine) Shingrix, continued cost discipline and better cash generation,’ said chief executive Emma Walmsley.
GSK said it expected earnings per share to fall by up to nine percent this year, ‘reflecting recent approval of a generic competitor’ in the United States to its blockbuster asthma drug Advair.
Following the results, GSK’s share price was down 0.4 percent at £15.16 on London’s benchmark FTSE 100 index, which was around 0.1 percent lower overall in afternoon trading.
The earnings update comes as GSK embarks on a major overhaul of its business.
In December, GSK and US rival Pfizer announced a merger of their consumer healthcare units that produce over-the-counter medicines.
The deal paves the way for GSK to have two UK-listed companies, one specialised in the development of drugs and the other in consumer healthcare.
It comes as the pharmaceutical industry’s biggest players seek out new blockbuster treatments following expiry of patents for some of their major drugs that has enabled smaller rivals to offer cheaper alternatives.
Also in December, GSK struck deals to buy US cancer-treatment specialist Tesaro for $5.1 billion and sell the night-time hot drink brand Horlicks to Unilever for 3.3 billion euros.
Last year also saw GSK spend $13 billion buying out Novartis’ stake in the pair’s consumer healthcare joint venture.