At constant exchange rates, adjusted earnings per share grew 4% in 2017 to 111.8p, but GSK sees them flat to down 3% in 2018 if generic versions of its blockbuster Advair asthma treatment launch later in the year as expected.
US Advair sales could halve
In the US, Advair generated sales of £1.6bn in 2017, but should competition from generics materialise, GSK reckons sales in the States will dive to around £750mln.
If a generic substitute doesn’t come on the market, the FTSE 100 drugmaker expects 2018 earnings to be rise by between 4-7%.
Despite the Advair uncertainty and looming competition from Gilead Sciences Inc’s (NASDAQ:GILD) rival HIV treatment, chief executive Emma Walmsley said she was “increasingly confident” her company could continue to deliver mid-to-high single digit earnings growth over the next few years.
Overall, the UK’s largest pharma outfit topped expectations with its fourth quarter results.
£1.7bn one-off tax hit
GSK reported a fourth-quarter adjusted EPS of 27.2p, on sales of £7.64bn. According to Thomson Reuters, Wall Street had been expecting 26.0p and £7.49bn.
The London-based firm added it had taken a one-off tax charge of £1.7bn in its 2017 earnings as a result of the recently-introduced tax reforms in the US.
Going forward though, Glaxo expects the changes to lower its effective tax rate on underlying profits by two to three basis points.
The company declared a 23p dividend, amounting to a full-year pay-out of 80p, and backed its divi guidance, saying it continued to expect to pay out 80p again in 2018.
GSK shares edged 0.9% higher to £12.54 on Wednesday afternoon.