GSK, Schering-Plough profits drop

When big drugs tank, they take their makers down with them. Witness first-quarter reports from GlaxoSmithKline and Schering-Plough. GSK is suffering on a sharp decline in Avandia sales, reporting a 9 percent decline in profits to $3.9 billion. Sales of the embattled diabetes med--which has been fighting safety concerns since a now-infamous meta-analysis linked it with cardiac troubles last May--dropped by 56 percent in the first quarter.

Trying to put a good face on it, outgoing CEO Jean-Pierre Garnier (photo) said that, without the impact of Avandia and generics, the pharma business would have grown by 7 percent--a meaningless statistic, of course, because Avandia and generics are reality. He should have simply pointed out that GSK had some bright spots, too: Asthma drug sales rose, and two new vaccines got the FDA nod.

Schering-Plough's earnings make Glaxo look positively glowing: The Zetia-and-Vytorin maker saw profits plunge by 48 percent to $291 million. Now, a chunk of that decline came from Organon acquisition costs. The drug maker also blamed increased R&D spending and higher overhead. Sales actually grew by a whopping 57 percent--but that was due to the inclusion of Organon's products. Vytorin and Zetia, the newly controversial cholesterol drugs, toted up $1.2 billion in sales, a 6 percent rise since the first quarter of 2007, but a big drop from fourth quarter figures. (And more declines are on the way, PBMs and managed care companies say.)

- see the Financial Times' take on Glaxo
- read the Wall Street Journal's article on Glaxo
- check out MarketWatch's brief on Schering-Plough
- find the item on further Vytorin and Zetia declines at Pharmalot

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