Some activists have argued that the decline in prices in Africa shows that the companies are overcharging for their products in the developed world. GlaxoSmithKline and other manufacturers countered that they needed to charge premium prices in Europe, North America and Japan to fund research.
Garnier also dismissed a British newspaper report speculating that the company was considering a merger with American Home Products Corp. of Madison, N.J., parent of Wyeth-Ayerst Laboratories Inc. in St. Davids.
Garnier stressed, as he has in other meetings with analysts and the news media, that GlaxoSmithKline, created in December in a $68 billion merger between Glaxo Wellcome P.L.C. and SmithKline Beecham P.L.C., was more interested in boosting its drug-product pipeline by licensing specific products than through a wholesale corporate acquisition.
Sharon Prince, a spokeswoman for American Home Products, said yesterday that the company did not comment on rumor.
In its first full quarter as a combined company, GlaxoSmithKline said pharmaceutical sales were up 11 percent worldwide and 14 percent - at $3 billion - in the United States. That is compared with the merger partners' combined individual results in the year-earlier quarter.
New products accounted for 18 percent of sales, an increase of 34 percent. That was led by Avandia, the company's diabetes drug, which had a sales increase of 43 percent.
"Lots of things were going right in the first quarter," Garnier said.
When asked about the company's strong balance sheet, Garnier said GlaxoSmithKline was looking for acquisitions and may also consider a share-buyback program this year.
The company's American depositary receipts rose 3 cents yesterday on the New York Stock Exchange, to $51.61.
Consumer sales were down 2 percent, due in part to strong competition against its NicoDerm and Nicorette smoking-cessation products from store brands.
"It has attracted copycats who have come back and taken a bite," Garnier said.
With the acquisition in January of Block Drug, a consumer-products company that sells Sensodyn toothpaste and Poli-Grip and Polident denture products, Garnier predicted that over-the-counter sales would grow to $1 billion a quarter.
As for prescription products, Garnier said Relenza, the company's flu drug, which once promised to be a top-seller, is now considered a niche product.
He was pessimistic about whether the company and the U.S. Food and Drug Administration could find a way to return Lotronex, a treatment for irritable bowel disease, to the market. It was withdrawn last year over safety concerns.
But mainstays Augmentin, an antibiotic, and Paxil, an antidepressant, turned in strong performances. Garnier said Paxil sales would continue to grow with the drug's recent approval for use in patients with general anxiety disorder. Augmentin, he said, is expected to receive approvals for two new formulations this year, which should expand its market.
Garnier acknowledged that the company was weak on cardiovascular products and said this could be a key area for new product licensing or acquisitions.
Aetna U.S. Healthcare, the health maintenance organization based in Blue Bell, confirmed yesterday that it would not press for discounts on AIDS drugs in the United States as a result of the price cuts offered abroad.
"Aetna strives to negotiate on behalf of our members and plan sponsors in an effort to ensure that they have access to affordable medications," an Aetna spokeswoman, Jennifer King, said in a written statement. "However, we would not take any specific action relative to the humanitarian gesture in South Africa."
During the news conference, Garnier was asked whether he was embarrassed by the company's profits, in light of the HIV/AIDS epidemic in Africa.
"As a CEO, I will never be embarrassed to do well by the shareholders," he said. "The AIDS drugs exist because we discovered them. Let's not forget that."
Susan Warner's e-mail address is swarner@phillynews.com.
Company (Symbol) Exchange
GlaxoSmithKline (GSK) NYSE
1 qtr. '01 1 qtr. '00 Pct.
end 3/31 end 3/31 chg.
Revenue (millions) $6,898 $6,587 +5
Net income (millions) $998 $1,249 -20
Per share $0.33 $0.41 -20
Results include merger and restructuring costs of $425 million in the first quarter of 2001 and $50 million in the first quarter of 2000. Per share figures are for American Depositary Shares.
