* 2017 core EPS seen flat-lower if mid-year generic Advair
* Current exchange rates would lift 2017 sterling EPS 9 pct
* Q4 2016 core EPS 26.1 pence vs consensus forecast 25.0p
(Adds CEO comments, shares, background on new CEO)
By Ben Hirschler
LONDON, Feb 8 GlaxoSmithKline quarterly
sales and profits beat expectations, buoyed by a weak pound, but
the drugmaker warned earnings stripping out currencies could
slip in 2017 if generic copies of its lung drug Advair arrive in
the United States.
Outgoing Chief Executive Andrew Witty, presenting his final
set of results, said the 2017 profit outlook was "very
consistent" with market consensus and showed GSK was well placed
to absorb the potential loss of Advair.
GSK is buttressed by its large consumer health and vaccines
units, while the core pharmaceuticals business is seeing
increased demand for new drugs.
"Once we are through this window of Advair, the company
doesn't really have any material patent expirations until the
late 2020s, which is an extraordinarily long period of time,"
Witty told reporters.
GSK shares slipped around 1 percent following Wednesday's
results. UBS analyst Michael Leuchten said the 2017 outlook
might cause some confusion but was broadly in line with
Quarterly sales rose 21 percent in sterling terms to 7.59
billion pounds ($9.48 billion), generating core earnings per
share (EPS) up 45 percent at 26.1 pence.
Analysts, on average, had forecast sales of 7.45 billion
pounds and core EPS, which excludes certain items, of 25p,
Thomson Reuters data shows.
GSK said EPS, in constant currencies, were set to be flat to
slightly lower in 2017, if substitutable generic copies of
Advair arrive in the United States by mid-year, as most analysts
expect. If generics don't launch, core EPS should increase
between 5 and 7 percent.
If January 2017 average exchange rates were applied to the
whole of 2017, sterling core EPS would benefit by around 9
percent, the group added.
GSK has been preparing for the loss of Advair exclusivity
for the past two years but the potential launch of generics will
still be a blow, since the medicine is highly profitable and has
sold more than a $1 billion annually since 2001.
The U.S. Food and Drug Administration is due to decide
whether to approve the first substitutable Advair generic, from
Mylan, by March 28. A rival version from Hikma
and Vectura has an approval decision date of May 10.
It will be up to Witty's successor Emma Walmsley, 47, to
steer GSK through the challenge when she takes over on April 1.
Witty said she was likely to give a strategy update in the
second half of 2017.
Britain's largest pharmaceuticals company, which generates
more than 95 percent of its sales overseas, has been one of the
biggest beneficiaries of the pound's sharp depreciation since
last year's Brexit referendum.
That has cut worries about dividend payouts and lifted the
scope for acquisitions, while GSK's high-volume, lower-margin
pharma strategy is looking smarter today than a few years back
as U.S. President Donald Trump attacks high drug prices.
GSK's upcoming new medicines include a novel inhaler that
combines three medicines in one device and a promising vaccine
for shingles. But the company also faces competition in its
successful HIV business from a new Gilead medicine.
($1 = 0.8005 pounds)
(Reporting by Ben Hirschler; editing by Martinne Geller and