A sharp fall in sales of flu products after last year's pandemic-linked windfall will weigh on GlaxoSmithKline's first-quarter results, but Britain's biggest drugmaker can point to better times ahead.
Exceptional demand for vaccines and anti-flu drug Relenza flattered results a year ago. Their absence means sales will fall nearly 10 percent when it reports at 1100 GMT on Wednesday.
Profits, however, should be cushioned by chunky disposal gains on the group's stake in Quest Diagnostics and the sale of North American rights to cold sore treatment Zovirax.
More important than the numbers will be confidence shown by management that the company's fortunes have reached a floor -- following the furore over diabetes drug Avandia and big generic hits in 2010 -- and it is now positioned for growth.
Dominic Valder of Evolution Securities believes GSK's sales and earnings will move to a sustainably positive trend from the second half of 2011 and setting a base-line for this improvement is his main focus for the quarterly results.
On paper, GSK has a comparatively robust growth profile through 2015 -- certainly compared to rival AstraZeneca, where sales are expected to fall over the next five years -- but this is arguably already reflected in its rating.
GSK shares trade at around 10.9 times this year's forecast earnings, slightly above Novartis on 10.4 and well above sector laggards like AstraZeneca and Sanofi-Aventis on 7.2 and 7.9 times respectively.
As with Novartis, which has multiple sclerosis medicine Gilenya to interest investors, GSK also has a ground-breaking new drug in Benlysta, for lupus -- though the British group has to share its profits with Human Genome Sciences.
Pharmaceutical companies across the globe are grappling with U.S. healthcare reforms and a push by cash-strapped governments in Europe to slash the prices of drugs, along with competition from cheaper generic treatments.
That means new products which really make a difference to patients are more important than ever.
So far, European drugmakers have had a mixed first-quarter report card, with Novartis last week beating expectations on the back on strong sales of its newer drugs, while Swiss rival Roche disappointed on April 14.
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