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Emma Walmsley kicked off her tenure as chief executive of GlaxoSmithKline by reporting better than expected first-quarter revenues, but her honeymoon period may not last long, as the company said the threat of new generic rivals meant it was still unable to make accurate forecasts for full-year earnings.

Reported revenues were 19 per cent higher than the same period last year, at £7.4bn, compared to consensus estimates of around £7.25bn among analysts surveyed by FactSet.

GSK beat profit forecasts in 2016, but it has repeatedly warned of the potential threat to earnings from new generic competitors to its blockbuster Advair asthma treatment.

In February the company said core earnings per share could grow by up to 7 per cent this year in the absence of competitors, but growth would be “flat to a slight decline” if new rivals arrive.

The company maintained those uncertain earnings forecasts today, and said “we are not able to give guidance for total results as we cannot reliably forecast certain material elements” of the results.

Rival Mylan had its application for a generic alternative to Advair rejected last month, but Israeli drugmaker Teva unveiled a new inhaler and authorised generic of Advair last week.

Shares in GSK, which were down around 0.8 per cent before the update was released at midday, picked up after the news though were still down 0.2 per cent for the day at publication time.

Ms Walmsley, who became one of the UK’s most senior female executives when she took over from Sir Andrew Witty at the start of this month, said:

This is a positive start for the year with sales growth in all three of our businesses and an improvement in the Group’s operating margin. Our clear focus is on commercial execution and preparation for near-term launches in Respiratory, HIV and Vaccines. We will be reviewing these and other priorities for the business with shareholders alongside our Q2 results on 26 July

Photo: Reuters

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