GlaxoSmithKline Q1 net profit up 14%

LONDON - Pharmaceutical company GlaxoSmithKline on Wednesday reported a 14 percent increase in first-quarter net profit, boosted by a gain from selling its remaining stake in Quest Diagnostics.

GlaxoSmithKline, maker of Sensodyne toothpaste and Tums antacid tablets, said its net profit for the period was 1.58 billion pounds ($2.6 billion), compared with 1.4 billion pounds in the first quarter of 2010.

Revenue fell 10 percent to 6.6 billion pounds, hit by a fall-off in sales of bird flu vaccine, a big seller a year ago, by generic competition for its Valtrex herpes drug and by regulatory curbs on sales of the diabetes drug Avandia.

Excluding those drugs, GSK said underlying sales rose 4 percent on the year with strong regional differences. Underlying sales were up 23 percent in emerging markets and 53 percent in Japan, but the company blamed U.S. health-care reform and EU austerity measures for declines of 4 percent in the United States and 5 percent in Europe.

GlaxoSmithKline shares were up 2.61 percent ($1.09) to $42.81 early this afternoon.

GSK sold its stake in Quest, a U.S. medical lab operator, and its North American interests in Zovirax cold sore cream, for 1.2 billion pounds cash, yielding a net profit of 246 million pounds.

Restructuring costs for the quarter were 114 million pounds, down from 220 million pounds a year earlier.

Chief executive Andrew Witty said the company is on course to achieve 2.2 billion in annual restructuring savings by next year, when it also expects top-line revenue to be growing again.