LONDON, July 24 Drugmaker GlaxoSmithKline
, rocked by charges of corruption in China, reported a
modest 2 percent rise in group sales on Wednesday but said the
bribery scandal would inevitably have an impact.
"Clearly, we are likely to see some impact to our
performance in China as a result of the current investigation,
but it is too early to quantify the extent of this," Chief
Executive Andrew Witty said.
Britain's biggest drugmaker has been struggling to grow in
recent quarters due to loss of patent protection on some of its
medicines and falling prices in austerity-hit Europe.
GSK's worldwide sales in the first quarter were 6.62 billion
pounds ($10.17 billion), generating core earnings per share
(EPS) up 1 percent at 26.3 pence. Analysts, on average, had
forecast sales of 6.60 billion pounds and core EPS, which
excludes certain items, of 26.2p, according to Thomson Reuters.
The company reiterated that it expected sales growth for the
year to be around 1 percent in local currency terms, with EPS
rising by between 3 and 4 percent.
GSK's reputation has been damaged and its management team in
China left in disarray by Chinese police allegations that it
funnelled up to 3 billion yuan ($489 million) to travel agencies
to facilitate bribes to doctors and officials.
The company admitted on Monday that some of its senior
Chinese executives appeared to have broken the law and said it
planned to change its business model to lower the cost of
medicines in the country.
China is an important growth market for GSK and other large
drugmakers, which are relying on the middle classes in emerging
markets to buy more of their products as sales in Western
countries falter due to patent losses and government cutbacks.
The bribery scandal suggests business in the country is
going to get tougher, especially if Beijing succeeds in driving
down the premium prices enjoyed by Western firms.