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Glaxo defends £1.4bn profitsBy: Andrew Clark
Chief executive Jean-Pierre Garnier angrily rejected suggestions that the company should be embarrassed by its booming finances in view of the poor availabililty of its HIV-Aids treatments in Africa. "As a chief executive, I will never be embarrassed to do well by my shareholders," he said. "People have to come to the realisation that drugs and profits are compatible. You can't get one without the other." He said there would be no criticism of Glaxo if there were no treatments for HIV-Aids. "The Aids drugs exist because we've discovered them. "Society wants us to develop new drugs - that's what we're here for. You can't do that without generating returns for shareholders. "No attempt to discover drugs on a non-profit basis has ever worked. "Look at Russia - they never discovered any new drugs. " In its first three months as a merged entity, Glaxo SmithKline's profits rose 11% at constant exchange rates, in a performance described by analysts as "solid". Sales of HIV-Aids treatments were up 12% to £298m, of which revenue outside Europe and the US increased 43% to £32m. A spokesman for Oxfam said: "These figures show quite how profitable the pharmaceuticals industry is, and show how much margin there is for making concessions in developing markets." Glaxo was the main mover in persuading the industry to drop a court case last week against the South African government that challenged the country's right to distribute cheap copies of HIV-Aids drugs. "I personally intervened with Kofi Annan to get a solution," said Mr Garnier. "I'm very proud of the way Glaxo SmithKline behaved - we've clearly led the industry in a new direction." Some analysts have suggested that the climbdown could lead to battles for cheap drugs with elderly and low-income groups elsewhere in the world. But Mr Garnier said: "If this spreads to other countries, it would pretty much kill the industry, because it couldn't recoup its research and development spending." Glaxo's growth was driven by surging sales of antidepressant Paxil, antibiotic Augmentin and asthma treatments Flixotide and Serevent. Mr Garnier admitted the firm was keen to licence in more late-stage products for its drugs pipeline. But he played down reports of another merger, this time with American Home Products: "Our priority is to find products and in-licence them." Controversial flu drug Relenza - which was barred from the NHS two years ago - has proven an international flop. Mr Garnier admitted its performance was "poor" and that it was no longer a priority. Glaxo's shares slipped 25p to £17.85 yesterday.
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