GlaxoSmithKline (NYSE:GSK) cut its 2014 outlook after sales fell by a worse-than-expected 13 percent in the second quarter as its all-important lung drugs struggled in the United States and a strong pound took a bite out of growth.
A run of weak quarters highlights the pressure on Chief Executive Andrew Witty, whose drive to reshape Britain's biggest drugmaker has yet to deliver the hoped-for return to sustained revenue growth, following a lengthy period of patent expiries.
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Shares in the company fell 2.8 percent by 1115 GMT on the disappointing results.
The company is also mired in a serious corruption scandal in China, where it has been accused of paying bribes to doctors to use its medicines.
Quarterly sales totalled 5.56 billion pounds ($9.48 billion), generating "core" earnings per share down 25 percent at 19.1 pence, the drugmaker said on Wednesday.
Analysts, on average, had forecast sales of 5.76 billion pounds and core EPS, which excludes certain items, of 21.3 pence, according to Thomson Reuters.
The company pared its outlook for the full year, predicting core EPS would be "broadly similar to 2013" in constant exchange rate terms. Previously, it had been hoping to increase 2014 EPS by between 4 and 8 percent.
A big concern for GSK investors is its reliance on the inhaled lung drug Advair, which makes up nearly a fifth of sales. It already faces competition from copycat versions in Europe, with generics in the United States perhaps a couple of years away.
GSK is hoping two new inhaled respiratory medicines - Breo and Anoro - will fill the gap but their uptake so far has be slow, disappointing many analysts who follow the company.
Although it has put the worst of its patent losses behind it, GSK still faces challenges in some areas, including the launch of a generic version of heart pill Lovaza in the U.S. market in April.
Witty joined the deal-making bandwagon sweeping the healthcare sector in April by trading more than $20 billion of assets with Swiss rival Novartis in a complex three-part transaction designed to make the group more focused.
But the GSK boss has eschewed full-scale mega-mergers, arguing they are distracting and disruptive to the company's research and development activities.