Final Results

Group performance

Group turnover by division, geographic region and segment

Turnover - 2014

Total Group turnover for 2014 declined 3% to £23,006 million.  Pharmaceuticals and Vaccines turnover fell by 4%.  Pharmaceuticals turnover declined 5% as growth in Emerging Markets, Japan and ViiV Healthcare was more than offset by lower sales in the US and in Established Products.  Europe Pharmaceuticals was flat for the year.  Worldwide Vaccines turnover declined 1%, as a positive performance in Emerging Markets was more than offset by lower reported sales in Europe and Japan.  US Vaccines sales were flat.  Consumer Healthcare turnover was £4,336 million in the year, down 1% compared with 2013.

In the US, Pharmaceuticals and Vaccines turnover declined 10% to £4,980 million, with Pharmaceuticals down 12% and Vaccines flat.  Pharmaceutical sales were impacted by continued price and contracting pressures, primarily affecting respiratory sales, which were down 18% (11% volume decline and a 7% negative impact of price and mix).  Sales of Advair were down 25% (14% decline in volume and an 11% decline from price and mix).

Oncology products in the US contributed strongly in the year, with sales up 41% to £509 million, benefiting from strong performances from Votrient and Promacta, and the recent launches of Tafinlar and Mekinist.  Benlysta sales grew 22% to £155 million.  Generic competition in the US continued to impact sales of Dermatology products, which declined 56% to £49 million and Mepron, which declined 49% to £40 million.  Sales of Infanrix/Pediarix grew 15% to £297 million, benefiting from favourable CDC stockpile movements compared with 2013 and the absence of a competitor, particularly in the first half of the year.  Sales of hepatitis vaccines were down 6% to £234 million impacted by supply constraints.  Boostrix was down 7% to £163 million reflecting the return to the market of a competitor during the year and some supply constraints.  Rotarix fell 16% to £86 million as a result of a CDC stockpile withdrawal during Q4 2014.

Europe Pharmaceuticals and Vaccines turnover was flat at £4,035 million.  Pharmaceutical sales were flat at £3,057 million, as strong growth in Oncology and the Avodart franchise up 8% to £280 million, was offset by a 3% decline in Respiratory sales.  The newly launched Relvar Ellipta recorded sales of £18 million in the year but these were more than offset by lower sales of Seretide, down 5% to £1,330 million (1% volume decline and a 4% negative impact of price), reflecting increasing competitive pressures and the transition of the Respiratory portfolio to the newer products, particularly in the latter part of the year.  Oncology sales were up 29% to £417 million, led by Votrient, Promacta and the newly launched Tafinlar.  Vaccines sales fell 2%, with lower sales of Infanrix, Cervarix and flu vaccines, reflecting increased competitive pressures, being only partly offset by sales growth in a number of other products, including Boostrix, which was up 26%, due in part to a competitor supply issue in the first half of the year.

Emerging Markets Pharmaceuticals and Vaccines turnover increased 5% to £3,203 million, with Pharmaceuticals up 7% and Vaccines up 1%.  Most markets outside Asia showed strong growth, with notable performances from Brazil, up 12% to £380 million, and the rest of Latin America, up 9% to £593 million.  Sales in China fell 1%, reflecting the effects of the government investigation during the year.  There was continued growth from Respiratory products, up 3%, Oncology, up 30%, and the Avodart franchise, up 20%.  In Vaccines, growth from strong tender sales of Boostrix, Rotarix and Synflorix was largely offset by lower sales of Cervarix, as a result of some lost tenders, and some supply constraints.

Japan Pharmaceuticals and Vaccines turnover grew 1% to £937 million, with Pharmaceuticals sales increasing 2% and Vaccines sales declining by 14%.  Pharmaceuticals sales benefited from strong growth in Avodart, up 14% and Oncology products, up 17%.  This growth was partially offset by lower sales in the Respiratory portfolio, down 2%, which was affected by a weaker allergy season at the beginning of the year and increased competitive pressures.  The decline in Vaccines sales reflected the impact on Cervarix of the continued suspension of the recommendation for use of HPV vaccines, partly offset by higher sales of Rotarix.

ViiV Healthcare turnover grew 15% to £1,498 million as the growth generated by Tivicay and Epzicom, together with the newly launched Triumeq, more than offset the impact of generic competition to older ViiV Healthcare products, including Combivir and Trizivir.

Established Products turnover fell 16% to £3,011 million, with sales of Lovaza down 57%, reflecting generic competition in the US, which commenced in April 2014.  There was also continuing generic competition to a number of products across the portfolio, including Seroxat/Paxil, down 19% and Valtrex, down 24%.

Consumer Healthcare turnover was £4,336 million in 2014, down 1% compared with 2013, reflecting the impact of a number of supply interruptions during the year.  Growth in Rest of World markets of 4% was also affected by weaker market conditions, while sales in Europe, down 5%, and the US, down 8%, were more directly the result of supply issues.

Total Group turnover for 2014, including divestments completed in 2013 was down 7%, with Pharmaceuticals and Vaccines down 6% and Consumer Healthcare down 11%.

Turnover - Q4 2014

Total Group turnover for Q4 2014 declined 5% to £6,186 million.  Pharmaceuticals and Vaccines turnover fell by 6%.  Pharmaceuticals turnover declined 5% as growth in Emerging Markets and ViiV Healthcare was more than offset by lower sales in the US and Japan and a decline in Established Products sales.  Europe Pharmaceuticals was flat.  Worldwide Vaccines turnover declined 9%, with lower reported sales in all regions.  Consumer Healthcare turnover was £1,116 million in the quarter, up 2%.

In the US, Pharmaceuticals and Vaccines turnover declined 10% to £1,386 million, with Pharmaceuticals down 10% and Vaccines down 9%.  Pharmaceutical sales in the quarter were impacted by continued price and contracting pressures, primarily affecting respiratory sales, which were down 20% (6% volume decline and a 14% negative impact of price and mix).  Sales of Advair were down 27% (11% volume decline and a 16% negative impact of price and mix).

Oncology products in the US again contributed strongly to the quarter, with sales up 45% to £150 million, benefiting from strong performances from Votrient and Promacta, and the recent launches of Tafinlar and Mekinist.  Benlysta sales grew 30% to £44 million.  The 9% decrease in Vaccines sales primarily reflected lower sales of Boostrix, down 58%, which were impacted by supply constraints and comparison with a strong Q4 2013, which benefited from the absence of a competitor vaccine.  Rotarix was impacted by a CDC stockpile withdrawal in the quarter.  This was partly offset by growth in Infanrix/Pediarix, which was helped by a CDC stockpile replenishment in the quarter and Hepatitis and flu vaccines, both of which benefited from the phasing of shipments in 2014.

Europe Pharmaceuticals and Vaccines turnover was down 1% to £1,020 million.  Pharmaceutical sales were flat at £780 million.  Oncology sales were up 28% to £106 million, led by Votrient, Promacta and the newly launched Tafinlar.  Respiratory sales declined 5%, primarily reflecting increasing competition.  Relvar Ellipta recorded sales of £9 million in the quarter, but these were more than offset by the decline in Seretide sales of 9% to £316 million (4% volume decline and a 5% negative impact of price), reflecting increasing competitive pressures and the transition of the Respiratory portfolio to the newer products.  Vaccines sales were down 7%, primarily reflecting the impact of increased competition for flu vaccines tenders.

Emerging Markets Pharmaceuticals and Vaccines turnover declined 4% to £891 million, with Pharmaceuticals up 4% and Vaccines down 16%, primarily reflecting the phasing of tender shipments.  Declines in the Middle East, Africa and Brazil were partly offset by a strong performance in Russia.  Sales in China were down 7% to £72 million.  In Emerging Markets Pharmaceuticals, Seretide sales were down 2%, in part reflecting the relative phasing of sales in China in 2014 compared with 2013.  There were continued growth contributions from Oncology products, up 9% and the Avodart franchise, up 26%.

Japan Pharmaceuticals and Vaccines turnover declined 7% to £267 million, with Pharmaceuticals sales down 7% and Vaccines sales down 25%.  The performance in Pharmaceuticals primarily reflected a 50% reduction in Relenza sales as a result of comparison with a strong Q4 2013.  Respiratory sales declined 2% as a 16% fall in sales of Adoair in the quarter was largely offset by the newly launched Relvar Ellipta.  In Vaccines, Rotarix sales were down 13% to £7 million due to the phasing of shipments in 2014.

ViiV Healthcare turnover grew 25% to £462 million as the growth generated by Tivicay, Epzicom and the newly launched Triumeq more than offset the impact of generic competition to older ViiV Healthcare products, including Combivir and Trizivir.

Established Products turnover fell 16% to £777 million, with sales of Lovaza down 62%, principally reflecting generic competition in the US.  There was also continuing generic competition to a number of products across the portfolio, including Seroxat/Paxil, down 17% and Valtrex, down 19%.

Consumer Healthcare turnover was £1,116 million in the quarter, up 2% compared with Q4 2013.  Growth in Rest of World markets was 7% as an improving supply position outweighed ongoing weak market conditions.  Sales in Europe were flat while the US was down 4%, both reflecting the impact of previously identified supply issues, despite continued progress in remediation activities.

Total Group turnover for Q4 2014 compared with Q4 2013 including divestments completed in 2013 was down 7%, with Pharmaceuticals and Vaccines down 7% and Consumer Healthcare down 7%.

Divisional performance

Pharmaceuticals

Respiratory

2014 (£6,181 million; down 10%)

Respiratory sales in 2014 declined 10% to £6,181 million.  Seretide/Advair sales were down 15% to £4,229 million, Flixotide/Flovent sales decreased 6% to £702 million and Ventolin sales grew 11% to £665 million.  Xyzal sales, almost exclusively made in Japan, grew 7% to £130 million.

In the US, Respiratory sales declined 18% (11% volume decline and a 7% negative impact of price and mix), primarily reflecting the continued price and contracting pressures in the market.  Sales of Advair were down 25% to £1,972 million (14% decline in volume and an 11% decline of price and mix).  Flovent sales were down 6% while Ventolin sales were up 18%, primarily reflecting the impact of net favourable adjustments to previous accruals for returns and discounts.  Breo Ellipta recorded sales of £29 million and Anoro Ellipta sold £14 million in the year.

European Respiratory sales were down 3%, primarily reflecting increasing competition.  Seretide sales declined 5% to £1,330 million (1% decline in volume and a 4% negative impact of price), reflecting increasing competitive pressures and the transition of the Respiratory portfolio to the newer products in the latter part of the year.  Relvar Ellipta recorded sales of £18 million in the year.

Respiratory sales in Emerging Markets grew 3%.  Seretide grew 3% to £400 million, helped by an improved performance in China.  Sales growth of Ventolin, up 8% to £165 million, and Veramyst, up 15% to £73 million, was offset by a 33% decline in Flixonase, which was largely driven by lower sales in China.

In Japan, Respiratory sales fell 2% to £475 million.  Sales of the newly launched Relvar Ellipta of £17 million offset the impact of increasing competitor action on Adoair, which fell 6% to £228 million.  The  growth in Xyzal, up 8% to £114 million, was more than offset by lower sales elsewhere in the Respiratory portfolio.

Q4 2014 (£1,664 million; down 11%)

Respiratory sales in the quarter declined 11% to £1,664 million.  Seretide/Advair sales were down 18% to £1,119 million, Flixotide/Flovent sales decreased 8% to £189 million and Ventolin sales grew 5% to £181 million.  Relvar/Breo Ellipta, now launched in the US, Europe and Japan, recorded sales of £38 million in the quarter.

In the US, Respiratory sales declined 20% in the quarter (6% volume decline and a 14% negative impact of price and mix), primarily reflecting the continued price and contracting pressures, including for new products, which affected the ICS/LABA combination market, where Advair and Breo Ellipta compete, and also the LABA/LAMA combination market, where Anoro Ellipta has recently been introduced.  Sales of Advair were down 27% (11% volume decline and a 16% negative impact of price and mix) and Flovent sales were down 10% to £113 million, primarily reflecting the negative impact of price and mix.  Ventolin sales grew 5%, largely due to net favourable adjustments to previous accruals for returns and rebates.  Breo Ellipta, launched in Q4 2013 recorded sales of £15 million, and Anoro Ellipta, launched in Q2 2014 recorded sales of £9 million in the quarter.

European Respiratory sales were down 5%, primarily reflecting increasing competition.  Seretide sales declined 9% to £316 million (4% decline in volume and a 5% negative impact of price), reflecting increasing competitive pressures and the transition of the Respiratory portfolio to the newer products.  Relvar Ellipta, approved in Europe for both COPD and asthma and launched in Q1 2014, recorded sales of £9 million in the quarter.

Respiratory sales in Emerging Markets grew 1% to £217 million.  Sales of Seretide declined 2% to £111 million, while Ventolin grew 6% to £47 million.

In Japan, Respiratory sales fell 2% to £135 million.  Relvar Ellipta recorded sales of £12 million in the quarter, benefiting from the release of the "Ryotan" restrictions in mid-December, largely offsetting the 16% decline in Adoair sales, while growth in Veramyst and Xyzal was offset by declines in Zyrtec and Flixotide.

Oncology

2014 (£1,202 million; up 33%)

Oncology sales in 2014 grew 33% to £1,202 million.  Votrient sales grew 33% to £410 million and Promacta sales grew 34% to £231 million.  Arzerra sales fell 24% to £54 million and Tykerb/Tyverb sales fell 11% to £171 million.  Generic competition to both Hycamtin and Argatroban was more than offset by new launches, as Tafinlar and Mekinist recorded sales of £135 million and £68 million, respectively.

In the US, Oncology grew 41% to £509 million.  Votrient sales grew 32% to £181 million and sales of Promacta grew 32% to £91 million.  Tafinlar and Mekinist sales were £58 million and £67 million, respectively.

In Europe, Oncology grew 29% to £417 million, led by sales of Votrient, which increased by 23% to £153 million in the year.  Promacta grew 36% to £71 million and sales of Tafinlar were £67 million. 

In Emerging Markets and Japan, Oncology sales in the year grew 30% to £169 million and 17% to £65 million, respectively.

Q4 2014 (£335 million; up 30%)

Oncology sales in the quarter grew 30% to £335 million.  Votrient sales grew 32% to £115 million and Promacta sales grew 33% to £66 million.  Arzerra sales fell 37% to £12 million and Tykerb/Tyverb sales fell 8% to £42 million.  The newly launched products, Tafinlar and Mekinist, recorded sales of £43 million and £21 million, respectively.

In the US, Oncology grew 45% to £150 million.  Votrient sales grew 36% to £54 million and sales of Promacta grew 42% to £27 million.  Tafinlar and Mekinist sales were £18 million and £21 million, respectively.  Both were launched in late Q2 2013.

In Europe, Oncology grew 28% to £106 million.  Votrient sales increased 17% to £39 million and Promacta grew 25% to £18 million.  Sales of Tafinlar, which was launched in Q3 2013, were £21 million. 

In Emerging Markets and Japan, Oncology sales in the quarter grew 9% to £47 million and 31% to £19 million, respectively.

Cardiovascular, metabolic and urology

2014 (£965 million; down 3%)

Sales in the category fell 3% to £965 million.  The Avodart franchise grew 1% to £805 million, with 17% growth in sales of Duodart/Jalyn and a 4% decline in sales of Avodart.  Levitra fell 28% to £100 million in the year.  Sales of Prolia fell 10% to £41 million due to the agreement in Q2 2014 with Amgen to terminate the joint commercialisation in a number of European markets, Mexico and Russia.

On a regional basis, the decline in the US of 16% to £364 million, was partly offset by Emerging Markets, up 20% to £145 million, and Japan, up 14% to £114 million.  Europe was flat at £293 million.

Q4 2014 (£260 million; down 5%)

Sales in the category fell 5% to £260 million.  The Avodart franchise fell 3% to £212 million, with 16% growth in sales of Duodart/Jalyn and a 9% decline in sales of Avodart, while Levitra fell 14% to £32 million in the quarter.  Sales of Prolia decreased 31% to £10 million, due to the agreement in Q2 2014 with Amgen to terminate the joint commercialisation in a number of European markets, Mexico and Russia.

On a regional basis, sales in the US were down 8% to £108 million, and in Europe down 7% to £70 million, but sales in Emerging Markets were up 25% to £42 million and in Japan up 9% to £33 million.

Immuno-inflammation

2014 (£214 million; up 40%)

Immuno-inflammation sales grew 40% to £214 million.  Benlysta turnover in the year was £173 million, up 25%.  In the US, Benlysta sales were £155 million, up 22%.

Q4 2014 (£61 million; up 30%)

Immuno-inflammation sales grew 30% to £61 million.  Benlysta turnover in the quarter was £49 million, up 32%.  In the US, Benlysta sales were £44 million, up 30%.

Other pharmaceuticals

2014 (£2,407 million; down 2%)

Other therapy areas were down 2% at £2,407 million, principally reflecting generic competition to Dermatology products, which primarily affected sales of Soriatane in the US, and by a decline in sales of Mepron in the Rare diseases category.  These declines were partly offset by growth in Relenza sales of 39%, primarily in the US, and the inclusion of Theravance milestone income of £57 million (2013: £78 million).

Q4 2014 (£665 million; down 8%)

Other therapy areas fell 8% to £665 million.  This reflected a decline in sales of Augmentin, down 13% to £137 million, in part reflecting supply constraints, and a decline in sales of Mepron, in the Rare diseases category, down 16% to £21 million, following the start of generic competition in March 2014.

ViiV Healthcare (HIV)

2014 (£1,498 million; up 15%)

ViiV Healthcare sales increased 15%, with the US up 28%, Europe up 6%, Japan up 35% and Emerging Markets down 4%.  Tivicay recorded sales of £282 million, Epzicom/Kivexa sales increased 8% to £768 million but Selzentry sales were flat at £136 million.  The launch of Triumeq is well underway and it recorded sales of £57 million in the year.  This growth was partly offset by declines in the mature portfolio, mainly driven by generic competition to both Combivir, down 46% to £59 million, and Trizivir, down 61% to £36 million.

Q4 2014 (£462 million; up 25%)

ViiV Healthcare sales increased 25%, with the US up 35%, Europe up 17%, Japan up 53% and Emerging Markets up 12%.  The ongoing roll-out of Tivicay resulted in sales of £109 million in the quarter.  Epzicom/Kivexa, which benefited from use in combination with Tivicay, increased 1% to £205 million but Selzentry sales fell 3% to £35 million.  Triumeq sales were £48 million in the quarter.  This growth was partly offset by declines in the mature portfolio, mainly driven by generic competition to both Combivir, down 52% to £15 million, and Trizivir, down 65% to £9 million.

Established Products

2014 (£3,011 million; down 16%)

Established Products turnover fell 16% to £3,011 million.  Sales in the US were down 31% to £854 million, Europe was down 13% to £601 million, Emerging Markets was down 1% to £1,050 million and Japan was down 15% to £444 million.

Generic competition to Lovaza, down 57% to £240 million, Seroxat/Paxil, down 19% to £210 million and Valtrex, down 24% to £154 million, all contributed to the decline in the category.

Q4 2014 (£777 million; down 16%)

Established Products turnover fell 16% to £777 million.  Sales in the US were down 30% to £228 million, Europe was down 13% to £144 million and Japan was down 17% to £115 million, while sales in Emerging Markets increased 1% to £270 million.

Generic competition to Lovaza, down 62% to £55 million, Seroxat/Paxil, down 17% to £55 million and Valtrex, down 19% to £44 million, all contributed to the decline in the category.

Vaccines

2014 (£3,192 million; down 1%)

Vaccines sales fell 1% to £3,192 million with declines in Europe, down 2%, and Japan, down 14% being partly offset by growth in Emerging Markets of 1%.  The US was flat.  The Emerging Markets performance primarily reflected the strength of Synflorix, Boostrix and Rotarix.

Infanrix/Pediarix grew 2% to £828 million.  Growth in the US benefited from a favourable comparison with 2013, which was impacted by a withdrawal from the CDC stockpile.  This offset declines in Europe and Emerging Markets.

Boostrix sales increased 16% to £317 million, reflecting growth in all regions except the US.  US sales fell 7% reflecting the return of a competitor during the year and some supply constraints.

Cervarix sales declined 26% to £118 million in 2014, largely reflecting declines in Emerging Markets and Japan and increasing competitive pressures, particularly in the tender market.

Fluarix/FluLaval sales declined 9% to £215 million due to lower production levels for 2014 and the impact of increased competitive pressures.

Sales of hepatitis vaccines fell 6% to £558 million, in part reflecting supply constraints that impacted the US and Emerging Markets.

Rotarix sales were up 7% to £376 million, with growth driven by tender shipments in Europe and Emerging Markets, partly offset by a decline in the US, which was impacted by a CDC stockpile withdrawal in Q4 2014.

Synflorix sales grew 4% to £398 million, primarily reflecting a strong tender performance in Emerging Markets.

Q4 2014 (£846 million; down 9%)

Vaccines sales declined 9% to £846 million with the US down 9% following the return to the market of a number of competitor products earlier in the year.  Sales in Emerging Markets fell 16% and Europe was down 7%.

Infanrix/Pediarix grew 5% to £212 million, primarily reflecting growth in the US, which benefited from a CDC stockpile replenishment in the quarter.

Boostrix sales fell 38% to £57 million, largely driven by the US, which was impacted by an unfavourable comparison with Q4 2013, which benefited from the absence of a competitor vaccine as well as some supply constraints.

Cervarix sales declined 29% to £31 million in the quarter, largely reflecting declines in Emerging Markets and Europe.

Fluarix/FluLaval sales declined 8% to £78 million, in part due to lower production levels for 2014 and the impact of increased competitive pressures in Europe and Emerging Markets.

Sales of hepatitis vaccines were flat at £148 million, with growth in the US of 18% reflecting the phasing of shipments during 2014, offset by the impact of some ongoing supply constraints in Emerging Markets.

Rotarix sales were down 14% to £85 million, primarily driven by the US, which was impacted by a CDC stockpile withdrawal in Q4 2014.

Synflorix sales fell 14% to £130 million, reflecting the phasing of tenders in Emerging Markets.

2014 (£4,336 million; down 1%)

Consumer Healthcare turnover was down 1% in 2014, reflecting the impact of supply issues, comparison with a strong cold and flu season in early 2013 and slowing markets in the Rest of World.  Estimated global market growth was approximately 3%.

Sales in the US and Europe were down 8% and 5%, respectively, reflecting both supply issues and product recalls, primarily on products for Smokers Health and alli.  Growth in Rest of World markets of 4% was restricted by a slower economic environment, but did reflect some growth across most markets, partly offset by a 5% reduction of sales in China and a 52% decline in sales of Smokers Health products, both primarily due to supply issues.

Wellness sales were £1,596 million, down 7%, primarily due to the supply issues and product recalls that significantly impacted sales of products for Smokers Health, down 29%, and alli.

Oral health sales grew 4% to £1,797 million.  The continued growth of Sensodyne, up 11%, was partly offset by a 10% decline in sales of Aquafresh which was impacted by supply issues in both Europe and the US, together with increased competition.

Nutrition sales grew 10% to £633 million.  Horlicks was up 11%, reflecting continued growth in India, and Boost was up 9%.

Sales of products for Skin health were down 11% to £310 million, primarily due to lower sales of Bactroban in China.