Glaxo hit by diabetes drug slump

The firm says it had suffered as generic drugs increase

GlaxoSmithKline saw first-quarter profits fall after a sharp decline in the sale of key diabetes drug Avandia.

The UK-listed firm said pre-tax profits fell 13% to £1.87bn from £2.14bn in the same period a year earlier, prompted by a health scare linked to the drug.

However, the results were better than forecast and the firm partly managed to offset the fall with improved sales of over-the-counter goods.

Other pharmaceutical firms have experienced mixed sales recently.

Worse-than-expected results from drugs giant Pfizer recently surprised the market.

Glaxo - like other firms - has faced tough competition from generic drugs.

While the firm has stressed that the benefits of its Avandia drug outweigh the risks, chief executive JP Garnier said it was not obvious that its sales would improve.

He added that the firm continued to see sustained growth from key areas such as its Seretide/Advair asthma drug, vaccines and consumer healthcare items during the quarter that ended on 31 March.