One on One with David Stout, President of Global Pharma Glaxosmithkline
Thursday, February 08, 2007
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SUSIE GHARIB: Solid earnings today from Glaxosmithkline pushed up shares of Europe's biggest drug maker. Glaxo's net profit increased more than 5 percent. Sales rose slightly, hurt by the weak U.S. dollar. The company expects earnings to rise between 8 and 10 percent in 2007 benefiting from the launch of several new drugs this year. Earlier today I talked with David Stout, president of Glaxo's global pharmaceutical operations and asked him what will drive growth this year.
DAVID STOUT, PRESIDENT, GLOBAL PHARMA, GLAXOSMITHKLINE: Well we'll be very busy in 2007. We have five major new product launches in 2007. We have a new cancer agent Tykerb, that we anticipate launching in the first quarter. We also have our cancer vaccine for cervical cancer, Cervarix, which we expect to launch in Europe in the second half of this year and then we have a list of other new products, Coreg CR for hypertension and congestive heart failure, Trexima for migraine headaches and Allermist for nasal allergies. So we'll be very busy in 2007.
GHARIB: Mr. Stout, let's talk about Cervarix and Tykerb. Are you expecting these to be the so-called blockbuster drug?
STOUT: Yes, these are both going to be very important drugs for both the company and for patients. Now Tykerb will start of course, with a very narrow indication. It will be for patients who have failed on previous breast cancer treatments. Over time though, of course, we're investing a lot of money into research to develop new indications and to move it earlier into the treatment of breast cancer. Cervarix on the other hand should be a big product right from the start. Of course, there's already another cervical cancer vaccine on the market, which is already stimulating a lot of interest in the vaccine. We're starting to see many mandates around the world for adolescents and for young women to get vaccinated, so we're very anxious to get going with our Cervarix vaccine.
GHARIB: There were also a lot of headlines today about your new weight loss non-prescription drug which I think is going by the name Alli. What kind of sales do you expect to get from that long-term?
STOUT: All-I should be a very important new product. It's the very first prescription, product that's now gone over the counter for weight loss, so the really unique position for Alli is the fact that it's to be used in conjunction with a diet, so it's not a miracle cure. It's for people that are committed to dieting. Using a product like Alli, they can increase their weight loss by 50 percent. So we don't have a forecast just now but we think it's a very important product and it should do very well.
GHARIB: Let me talk to you about two of your other biggest drugs that are already on the market. I understand that Advair, which is for asthma is facing some safety issues for use in kids and also your diabetes drug Avandia is getting some competition from a comparable drug by Merck. How are you dealing with these challenges?
STOUT: Well in terms of the diabetes franchise, since the new class of compounds have come out, they've taken market share as predicted from other classes. The TCD class, of which Avandia is a part of, is viewed as being one of the fundamental types of treatment that needs to be used in diabetes along and in combination with some of these newer drugs that are coming out. On the Advair front, again this is a very fundamental way to treat asthma. You need to treat the inflammation and you need to have something on board to deal with the bronco spasm. So again it's very fundamental to use a product like Advair in COPD and asthma.
GHARIB: Let's talk a little bit about Glaxo looking way out. What kind of company is this going to be five years from now? What's your vision?
STOUT: I think investors will say I wish other companies had followed the GSK R&D model. They seem to have it right. They're turning out new products that are important for patients and at the same time they're doing good things around the world.
GHARIB: What about the outlook for future acquisitions? There's lots of speculation that Glaxo and AstraZeneca is going to pair up at some point. What are your thoughts on acquisitions?
STOUT: We've said all along, the conditions for any acquisition have to be extraordinary. We're very committed to developing our own portfolio. We don't need the distraction of a big merger. We really think we have the R&D model correct. We have a lot of work to do and that's where we're focused now and for the near future.
GHARIB: Mr. Stout, thank you so much and congratulations on a good quarter.
STOUT: Susie, thanks very much, good speaking with you again.
