By Kathleen Caulderwood - GlaxoSmithKline plc NYSE:GSK beat analysts' earnings expectations for its most recent quarter, and said Wednesday that it plans to reduce expenses by 1 billion pounds in the next few years, and explore the possibility of an initial public offering for its HIV research company. Though the pharmaceutical giant's sales continue to be pulled down by its U.S. business, the news allayed investor fears surrounding a recent corruption scandal in China.
Shares of the U.K.’s largest drugmaker surged more than 2 percent to $44.60 in Wednesday morning's trading.
The company’s third-quarter sales were down 10 percent from the year earlier. Core earnings per share stayed flat at 27.9 pence. Its pharmaceutical and vaccine sales were down 3 percent globally, but saw 12 percent growth in emerging markets and six percent in Japan.
GSK stock surged after the U.K. pharma company announced earnings on Wednesday." title="© Reuters/Aly Song. The logo of GlaxoSmithKline (GSK) is seen on its office building in Shanghai July 12, 2013." rel="external-image">
Sales of Advair, its best-selling drug, fell 13 percent amid greater competition in the U.S. as well as “formulary and contract changes” that were greater than executives had anticipated.
Executives also said they were exploring an initial public offering for Viiv Healthcare, its HIV drug developer, a joint venture with Pfizer Inc., and Shionogi & Co.
GSK inherited Ebola drug research last year, when it acquired the small European biotech firm, Okairos. Glaxo stock also received a boost in recent months thanks to its research, but its share price remained down 13 percent for the year, even after it announced plans to fast-track human trials of its experimental vaccine, which should be ready by the end of this year.