Pharmaceuticals giant GlaxoSmithKline posted Wednesday a drop in annual profit, adding the pound's tumble awaiting Brexit could offset a tougher US market for its key drug and asthma treatment Advair. GSK said net profit slumped to £912 million ($1.14 billion, 1.1 billion euros) in 2016 from £8.4 billion a year earlier when the earnings after tax figure was skewed by an assets swap deal with Swiss peer Novartis.
Looking ahead, "this year we face some uncertainty as to the level of our earnings performance, given the possibility of substitutable generic competition to Advair in the US", GSK's outgoing chief executive Andrew Witty said in the earnings statement.
Offsetting this however could be sizeable advantage from the pound's weakness, with GSK earning large sums in dollars. "January 2017 average exchange rates, if applied to (the) whole of 2017, would benefit sterling turnover by around six percent," the statement said.
Since Britain's June 23 referendum vote in favour of the country exiting the European Union, the pound's value has slumped by around 17 percent versus the dollar. The company is meanwhile set to enter a new era, with Witty stepping down later this year after almost a decade at the helm. GSK last year said it was promoting its consumer healthcare head Emma Walmsley to replace Witty - to become only the seventh female chief executive of a group currently trading on London's benchmark FTSE index of 100 blue-chips.
However GSK is by far the biggest company among the seven, employing around 100,000 people worldwide. Towards the end of Witty's tenure, GSK sold its oncology arm to Novartis in 2014 for $16 billion, buying the Swiss group's vaccines division in return, in a deal that completed in the first quarter of 2015. The pair also formed a joint venture for consumer health products.