GSK's Merger Has Strong Start

ByJohn S. McClenahen Not surprisingly, improving drug sales are driving the current strong business performance of London-based GlaxoSmithKline PLC (GSK), the pharmaceutical company formed by last December's merger of Glaxo Wellcome PLC and SmithKline Beecham PLC. Revenues totaled US$26.22 billion (18.079 billion British pounds) for the fiscal year that ended Dec. 31, 2000, 9% better in constant exchange-rate terms than their combined performance was in 1999. Significantly for the future, however, the merged company expects at least $2.32 billion (1.6 billion British pounds) in cost savings by 2003 as a result of the merger and manufacturing plans the two companies had in place prior to the merger. "We believe GSK has what it takes to achieve financial growth and become even stronger in the industry," states CEO Jean-Pierre Garnier. "We are determined to enhance R&D productivity, build a rich pipeline, and reduce our costs." GSK expects earnings per share (excluding merger and restructuring costs and the effects of currency exchange rates) to grow "around 13%" in 2001, accelerating to "the mid-teens" in 2002.