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China problems continue for drugs firm
A DRUGS firm, which employs more than 1,000 jobs at a North-East factory, reported a sharp drop in sales following a bribery scandal.
GlaxoSmithKline's (GSK) sales in China slumped 61 per cent in the third quarter, hit by allegations that damaged its ability to sell products in the country and pushed some sales into the hands of rivals.
Chief Executive Andrew Witty said GSK's China business had suffered most where other drug options were available.
The fall in Chinese sales, described by Deutsche Bank analysts as "dire", was steeper than investors expected and Mr Witty said it was too early to say when business might recover from the Chinese-government probe into allegations that GSK had bribed doctors to boost drug sales.
GSK could also end up facing hefty fines, although Mr Witty said he believed existing legal provisions were sufficient - and he stressed there was "absolutely no question" of GSK pulling out of China.
"We are totally committed to China," he told reporters in a conference call on Wednesday. "This is a very important business to GSK. China is a critically important country of the future."
Although Britain's biggest drugmaker generates less than 4 per cent of its sales in China, it has invested heavily in the country, where it employs 7,000 staff and has five factories and a research centre.
Worldwide, GSK's sales were flat at £6.51bn in the quarter.
GSK, which employs 1,150 people in Barnard Castle, County Durham, has recently seen some encouraging progress with its pipeline of new drug, including approvals this year for new treatments for lung disease, cancer and HIV, but austerity pressures in Europe have hit sales and profits.
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