Drugs Maker GlaxoSmithKline Returns To Profit

Britain's biggest drugs maker GlaxoSmithKline (GSK) returned to profit in the fourth quarter of 2011 following vigorous restructuring and cost-cutting.

For the three months ending December 31, GSK reported a net profit of £1.25bn compared with a loss of £633m a year earlier.

For the full year, net profit more than trebled, from £1.63bn in 2010 to £5.26bn.

The firm said it had lifted financial returns from its laboratories to an estimated 12% from 11% two years ago, and was confident of reaching its longer-term 14% target.

The results were boosted by the fact that sales and administration costs were slashed by a third to £8.8bn.

GSK also changed the way it organises scientists by splitting them into several discovery performance units, which now compete for funding.

The process is designed to emulate competition in the biotech sector and means only the strongest projects survive.

In addition, the firm said it was adding four new units, closing three and changing the leadership at eight.

Chief executive Andrew Witty said 2011 sales were up 4% excluding the exceptional bulge in vaccine sales a year earlier.

He was optimistic about the development of new products this year and said: "I am pleased to confirm that of the 15 late-stage drugs and vaccines we highlighted last year, we have received some or all of the data on nine of them".

GSK's quadrivalent flu vaccine has also progressed quickly and will file in the near future, according to Mr Witty.

The company now expects up to 30 programmes to move into late-stage clinical development over thye next three years.

It also has four ready to be submitted for regulatory approval in the coming months, lung drug Relovair, Promacta for hepatitis C, an MEK inhibitor for melanoma and a new flu vaccine.