GlaxoSmithKline shares edged up Wednesday after the London-based drug company forecast improved earnings growth beginning next year.
The company expects its earnings per share to decline this year in the “high-teens” largely due to declining sales and pricing pressure on its best-selling asthma drug Advair.
But GSK now predicts its earnings to grow in the low-to-mid single digits over the five-year period between 2016 and 2020.
That growth will largely be driven by increases in vaccine sales, sales of its HIV drugs, and sales of over-the-counter medicines in its consumer healthcare group.
GSK’s sales in the first quarter rose 1 percent to $8.5 billion while earnings per shares fell 16 percent.
Sales of the company’s pharmaceuticals dropped 7 percent globally as Advair sales declined 21 percent in the U.S. to $597 million.
GSK expects Advair sales to continue to decline but forecasts that sales of its respiratory drugs will return to growth next year thanks to newer products.
Last week, GSK and business partner Theravance won approval from the Food and Drug Administration to market one of those new drugs, Breo Ellipta, for treatment of asthma in adults.
In the first quarter, declines in pharmaceutical sales were offset by a 10 percent increase in sales from its vaccine unit and a 24 percent increase in its consumer healthcare division.
Revenue from the company’s HIV treatments also increased 42 percent in the first quarter to $678 million.
The strong performance of those products led GSK to announce Wednesday that it would retain its stake in the ViiV Healthcare business that makes the drugs.
GSK has reduced the amount it expects to return to shareholders as a result of cost savings from its recent acquisition of Novartis’ vaccine business.
The company now expects to return about $1.5 billion in a special dividend in the fourth quarter of this year, down from the roughly $6 billion it had earlier promised.
The company attributed the reduction to its assessment that there will likely be a generic alternative to Advair introduced in the U.S.
GSK is in the midst of a major restructuring as it narrows its focus to vaccines, consumer products and select pharmaceuticals in areas such as respiratory and HIV.
“We believe the ... new composition strengthens our ability to offer cost effective healthcare options to payers and governments and enables us to increase access for patients and consumers to our products,” GSK CEO Andrew Witty said in a statement.
The reorganization will eliminate more than 1,000 jobs at its North American headquarters in Research Triangle Park, where GSK recently had more than 5,000 employees.
The company’s Zebulon facility, which makes and packages more than 20 medications, has 450 employees and 150 contractors.
GSK shares closed Wednesday up 42 cents, or 1 percent, at $46.02. The stock is up nearly 8 percent this year.