GlaxoSmithKline ($GSK) joins other multinational pharma companies that witnessed a slowdown in China in the second quarter as heard on the July 29 earning call, with CEO Andrew Witty sounding in fine form, handling many of the questions directly.
But much of that was high-level on the progress of the Novartis ($NVS) integration covered elsewhere along with a bit on the progress of HIV medicines, Tivicay and Triumeq overall, but little on the terms of the manufacturing pact with Desano in China.
Perhaps he needed a bit of a breather from a long emerging markets review after an exhaustive May 7 address at the Goldman Sachs Auditorium joined by Emma Walmsley, who runs consumer healthcare business; Moncef Slaoui, who runs the vaccines business globally; and Abbas Hussain, who runs the pharmaceutical business and during which Chairman of the Board Sir Philip Hampton listened closely.
However, Simon Dingemans, chief financial officer, provided some nice color on China for the second quarter with talk of driving volume and for emerging markets, noting as Witty did that business is lumpy as expected because of tender timings and the impact of changed sales channels after the Novartis transaction.
"In international, sales grew 1% pro forma held back by the performance of our China business, which saw a 14% pro forma decline in the quarter as we continue to reset this business for the future, including new pricing policies designed to drive volume," Dingemans said. "And we are also disposing of a number of peripheral businesses to sharpen our focus in the country."
He added that while "India continues to deliver strong growth, but in a number of sizable markets are a material impact in the quarter from reducing channel inventories in the Novartis acquired businesses, most notably in China, Russia, and the Middle East. With Russia and the Middle East also suffering from regional slowdowns as well."