GSK share price: Full-year sales drop at Indian unit

on Feb 19, 2014
Updated: Apr 9, 2020
Listen, Wednesday, February 19: GlaxoSmithKline Plc’s (LON:GSK) Indian unit GlaxoSmithKline Pharmaceuticals (BOM:500660, NSE:GLAXO) saw its sales in 2013 fall about three percent, the Indian company has revealed. The news comes as GSK tries to increase its stake in the Indian subsidiary commonly referred to as GSK Pharma.

GSK’s share price has shed about 0.5 percent in London trading so far today.
**GSK Pharma sales fall three percent**
GSK Pharma announced yesterday in a statement that its product sales for the year ended December 31, 2013, had dropped by 3.1 percent as compared with the previous year with sales from the company’s pharmaceuticals business dropping by 4.3 percent year-on-year.

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GSK Pharma attributed the decline in sales to a drug price control regime introduced in India last year and to a dispute with retailers who stopped stocking the products of some drugmakers in retaliation for a cut in their margins. The company also noted that its gross margin was impacted by the decline in sales, as well as by higher material costs and adverse exchange rate movements.

The results come as GSK is attempting to raise its stake in the Indian subsidiary from 50.7 percent to up to 75 percent via a INR 64 billion (£629 million) open offer, scheduled to end on March 5. (GSK share price: Manager updates schedule for Indian unit offer)

Last February, GSK raised its stake in the publicly-listed Indian consumer healthcare subsidiary, GlaxoSmithKline Consumer Healthcare Ltd (BOM:500676, NSE:GSKCONS), from 43.2 percent to 72.5 percent with emerging markets such as India representing an important part of the UK drugmaker’s growth strategy.
**GSK, Dr Reddy’s to register first product in EU**

The Financial Express today reported that the pharma giant, in partnership with India-based Dr Reddy’s Laboratories (NYSE: RDY), was planning to register the joint venture’s first product in the European Union this year. The newspaper quoted Rogerio Ribeiro, GSK’s senior vice president and area head for emerging markets and Asia-Pacific, as saying that the alliance’s first drug would be filed for registration in 2014.
“We are filing the European dossier for one fixed dosage combination product,” Ribeiro said on the sidelines of the BioAsia 2014 conference, adding that once approved in Europe, the product would be launched across emerging markets. He however did not specify the name of the product and its therapeutic segment.
GSK sealed the alliance with Dr Reddy’s in 2009 with the two companies agreeing to develop and market selected products across an extensive number of emerging markets, excluding India. Under the terms of the agreement GSK gained exclusive access to Dr Reddy’s portfolio and future pipeline of pharmaceuticals in areas such as cardiovascular, diabetes, oncology, gastroenterology and pain management.
**As of 13:20 UTC, buy GSK shares at 1669.50p.**
**As of 13:20 UTC, sell GSK shares at 1668.50p.**

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