GlaxoSmithKline Prospects to 2010

Summary

Headquartered in the UK, GlaxoSmithKline was formed in 2000 as a result of the merger of Glaxo Wellcome and SmithKline Beecham. It employs over 100,000 people in 116 countries with over 16,000 involved in research. GSK has a broad portfolio, with products and R&D projects in the fields of respiratory, central nervous system, anti-infectives, metabolic disorders, oncology, cardiovascular and urogenital. In addition, GSK has an extensive vaccines portfolio. According to GSK, it supplied one quarter of the world's vaccines by the end of 2007 and had a further 20 in clinical development.

According to GSK, the key drivers of its business performance are growth of existing products and the launch of new products. The group had 12 products with over 500 million in annual global sales in 2007 and the strong growth seen from key products such as Seretide/Advair and GSK's vaccines business is expected to continue in the short term. However, GSK has already seen the significant impact of generic competition on products such as Paxil IR and Wellbutrin SR, which were both adversely affected following the arrival of generics in the US in 2003 and 2004. Within our forecast period to 2012, for the majority of GSK's therapeutic areas, most of its major products are forecast to show sales declines, mainly due to generic competition.

As GSK braces itself for intensifying generic drug competition, it faces further disappointing sales from its pivotal diabetes treatment, Avandia. In addition, GSK lost out to Merck & Co in the race to launch its cervical cancer vaccine, Cervarix. Merck has already won contracts across much of the EU for Gardasil, which it markets in Europe through a joint venture with sanofi-aventis. It has been approved in over 85 countries, including the US. GSK however, only received European regulatory approval for Cervarix in September 2007 and, contrary to the anticipated US approval, in December 2007 the FDA issued a request for further information. GSK may be convinced of the merits of Cervarix and has funded a head-to-head trial comparing the two vaccines, but the accumulating delay in approval has given Merck a head start which may be difficult to counter.

In response to these problems, GSK is implementing a restructuring which is designed to cut costs by 350 million in 2008 and 700 million annually from 2010. This will include the closure of a numbert of factories and several thousand job cuts from the worldwide workforce. The company also intends to reduce the number of sales representatives. Sales and other administrative expenses are expected to decline to less than 30 per cent.

Contents

• EXECUTIVE SUMMARY
  • A detailed and comprehensive overview of current financial position, company strategy, product and pipeline analysis
• THERAPEUTIC AREA FOCUS
  • Key product analysis and forecasting
• Respiratory
  • Flixotide/Flovent (fluticasone propionate)
  • Seretide/Advair (fluticasone propionate+salmeterol)
  • Veramyst/Allermist/Avamys (fluticasone furoate)
• Neurosciences
  • Imigran/Imitrex (sumatriptan)
  • Lamictal (lamotrigine)
  • ReQuip/Adartel (ropinirole)
  • Seroxat/Paxil (paroxetine)
  • Wellbutrin (bupropion)
  • Zyban (amfebutamone)
• Antivirals
  • Combivir (zidovudine+lamivudine)
  • Epzicom/Kivexa (lamivudine+abacavir)
  • Relenza (zanamivir)
  • Valtrex/Zelitrex (valaciclovir)
• Vaccines
  • Infanrix/Pediarix (combined diphtheria, tetanus and acellular pertussis (DTPa) vaccine)
  • Kinrix
  • Priorix
  • Rotarix
  • Boostrix
  • Cervarix
  • Fluarix
  • FluLaval/Fluviral
  • Hepatitis Vaccines
  • Menitorix
  • Prepandrix
• Cardiovascular
  • Arixtra (fondaparinux (SR 90107A))
  • Coreg (carvedilol)
  • Volibris (ambrisentan)
• Urogenital
  • Avodart (dutasteride)
  • Levitra (vardenafil)
• Metabolic
  • Avandia (rosiglitazone)
  • Bonviva/Boniva (ibandronate)
• Antibacterials/Antimalarials
  • Altabax/Altargo (retapamulin)
  • Augmentin (amoxicillin+clavulanic acid)
  • Lapdap (chlorproguanil+dapsone)
  • Zinnat/Ceftin (cefuroxime axetil)
• Oncology and Emesis
  • Atriance/Arranon (nelarabine)
  • Tykerb (lapatinib)
• Gastrointestinal
  • Zantac (ranitidine)
• OPERATIONAL DATA
  • A wealth of background and detail
  • A full 5-year financial performance assessment
  • Key agreements
  • Infrastructure
  • Subsidiaries and joint ventures