GlaxoSmithKline plc (LON:GSK) chief executive Emma Walmsley on Wednesday ruled out a takeover bid for Shire Plc (LON:SHR) as the pharmaceutical giant reported a decline in first quarter earnings.
Shire has received a preliminary offer from Japan’s Takeda of £49 a share, in a deal that values the company at £46bn. It marked an increase on Takeda’s previous bid of £43bn.
READ: Shire willing to recommend increased Takeda offer to shareholders
GSK has no interest in a bidding war with Takeda and will instead focus was on deals to buy early-stage experimental drugs to help boost its pipeline, Reuters quoted Walmsley as saying after the company’s first quarter results.
"We have ruled out any interest in Shire," she told reporters.
Stronger pound and pricing pressure hits earnings
The drugmaker reported a 2% decline in first quarter adjusted earnings per share to 24.6p, slightly ahead of the 24.25p analysts were expecting.
Sales fell 2% to £7.2mln, broadly in line with forecasts.
Results were weighed down by a stronger pound and more pricing pressure in respiratory medicine.
GSK expects increased pricing and competition to continue to impact sales of its ageing lung inhaler Advair in the US even before generic rivals are launched.
If generic versions of Advair hit the market by mid-year, GSK predicts full year EPS to be flat to down 3% in constant currencies. Excluding generics, earnings are expected to rise 4% to 7%.
Shingrix sales exceed expectations
Elsewhere, sales of the group’s new shingles vaccine Shingrix totalled £110mln for the first full quarter on the market, exceeding the consensus estimate of £35mln.
Shingrix is a key focus for GSK as it is expected to become its biggest single vaccine over time. The vaccine is a rival to Merck & Co’s (MRK.N) older and less effective Zostavax.