SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the period ending 22nd October 2008

GlaxoSmithKline plc

(Name of registrant)
980 Great West Road,
Brentford,
Middlesex, TW8 9GS
(Address of principal executive offices)

Indicate by check mark if the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-Fx      Form 40-Fo

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yeso      Nox

 

 

 

		Issued: Wednesday, 22nd October 2008, London, U.K. Results announcement for the third quarter 2008 GSK delivers Q3 business performance* EPS of 25.2p and increased dividend of 14p

Business performance results*

														9 months
		Q3 2008				Growth								2008				Growth
		£m				CER%				£%				£m				CER%				£%
Turnover			5,882				(3	)			7				17,442				(2	)			4
Earnings per share			25.2p				(9	)			6				78.0p				(5	)			4

Statutory results (including restructuring charges)

														9 months
		Q3 2008				Growth								2008				Growth
		£m				CER%				£%				£m				CER%				£%
Turnover			5,882				(3	)			7				17,442				(2	)			4
Earnings per share			20.1p				(30	)			(15	)			69.2p				(16	)			(7	)

The full results are presented under ‘Income Statement’ on pages 8 and 16.

Q3 business performance summary

•		EPS down 9% at constant exchange rates, up 6% in sterling terms benefiting from currency movements
•		Continued sales growth in vaccines, emerging markets and consumer healthcare helped offset impact of generic competition to US pharmaceuticals
•		Portfolio renewal continues with 10 product launches so far in 2008, including Rotarix (USA), Treximet (USA) and Tyverb (EU)
•		Strong R&D productivity evident with a sustained level of around 30 assets in late-stage development
•		Early progress in strategy to globalise and diversify business with ‘bolt-on’ acquisitions in emerging markets and consumer healthcare
•		Q3 dividend increased 8% to 14p.

Chief Executive Officer’s Review

We are managing a considerable transition to our product portfolio this year as several mature pharmaceutical brands encounter generic competition in the USA. In the short-term, this is having a significant impact on pharmaceutical sales, although we continue to see good growth from other areas of the pharmaceuticals portfolio, including a recent improvement in prescription volumes for Advair in the United States. Also helping offset the generic impact has been growth in other parts of our business, such as vaccines, emerging markets and consumer healthcare.

This diversification in sales is an inherent strength for GSK and one we are actively nurturing, through delivery and investment in our new strategic priorities. Ultimately, we are aiming to create a more balanced healthcare business with a lower overall risk profile.

Grow a diversified global business

In Pharmaceuticals, we are making good progress to renew our product line, with 10 product launches so far this year in critical growth areas, such as oncology, and in existing franchises.

In the future, we want our portfolio to be more balanced with a lower concentration of sales in any one or two products. Clearly, our agenda must then be to maximise the value of this broader portfolio and we are therefore deliberately taking a more global approach to commercialisation than ever before.

The success of Advair in Japan is a good example of driving growth outside our more traditional markets. Advair is at the vanguard of multiple future product opportunities in Japan, with the next product launch expected to be Lamictal, following its approval last week. Overall, we have the potential for more than 40 launches over the next 5 years in this market.

In emerging markets, we are starting to make some early progress in building a more tailored portfolio for patients and consumers. We have now formalised our trading agreement with Aspen Pharmaceuticals and have so far identified around 60 assets for prospective commercialisation.

We also recently acquired a broad range of pharmaceutical brands from BMS in Egypt. This is a fast growing market and we are now the market leader. Importantly, this acquisition also provides us with the opportunity to grow incremental sales in other markets in the Middle East and North Africa, through export of these products.

The dynamics of emerging markets are wholly different to traditional western pharmaceutical markets as there is less distinction between pharmaceutical, over-the-counter and retail market structures. Our capability to supply products and operate across this spectrum is, I believe, a competitive advantage for GSK.

On this basis, we are determined to globalise further our Consumer Healthcare business. In September, for example, we introduced Sensodyne — the fastest growing global toothpaste brand — into the Chinese market, our first major consumer product to launch there for a decade.

We also see multiple opportunities to build our consumer business through the switch of prescription products and the acquisition of new brands, which can complement and drive the growth of our key franchises. Our recent acquisition of Biotene, a dynamic oral healthcare brand, is evidence of this.

Issued: Wednesday, 22nd October 2008, London, U.K.		2

Moving forward, it is clear that we will need to monitor closely the impact that changes in the global economy will have on consumer demand for products. To date, we have seen only modest impact on GSK’s consumer products in certain territories. The strength of our diversified business model is that it helps to mitigate any potential impact on GSK as our multiple franchises operate in very different economic cycles.

In Vaccines, our sales continue to be dynamic with growth powered by a broad range of brands. We continue to expand this business and this quarter launched two new vaccines in the USA, Rotarix and Kinrix.

The potential of this business is significant, given our pipeline; the opportunity for global expansion, and payer needs that are increasingly directed towards preventative healthcare. At the same time, we must compete effectively for what are often binary tender orders and supply agreements. This may produce some volatility in the vaccines sales line as this business grows. Regarding recent tenders we have made good progress, in particular with Cervarix, which has been successful in approximately 60% of competitive tenders, notably in the UK for the largest vaccination programme against HPV in Europe.

Deliver more products of value

In R&D, we are continuing to make the changes necessary to deliver our pipeline going forward.

We have seen a step-change in the number of launches for GSK, and importantly we are replenishing these with new phase III entries. At present, we are maintaining a level of around 30 assets in late-stage development and our strategies in R&D are focused on sustaining this type of productivity.

Moreover, GSK continues to deliver innovative products with 6 novel medicines and vaccines either launched or filed in 2008. In fact, around 75% of assets in our pipeline are entirely new compounds or vaccines. By any standard, this is a strong bias towards innovation and demonstrates the value GSK can bring to patients and to payers.

We have seen good progress in our late-stage biopharmaceutical portfolio this quarter. New data for ofatumumab, a treatment for patients with chronic lymphocytic leukaemia, will be used to support a licence application planned for the end of the year. Our first in-house developed biopharmaceutical product, Bosatria, was filed for approval in Europe this quarter. We hope this will be a valuable new treatment for patients with the rare, but potentially fatal disease, hypereosinophilic syndrome. Finally, otelixizumab, a new potential treatment for Type I diabetes, entered phase III development in August.

Data on several other important assets this quarter further highlighted the potential of GSK’s pipeline. New data for cancer treatments, Armala and Tykerb, demonstrated positive effects against several tumour types with high, unmet medical need. In addition, we presented results from a clinical imaging study of darapladib. These data support our belief that Lp-PLA₂ inhibition may be an important therapeutic target and we plan to begin phase III clinical studies shortly.

When I outlined our new strategic priorities last quarter, I said that GSK has a very clear ambition to realise value in R&D through better allocation of capital. Here, we have made progress through reshaping our R&D organisation and the introduction of new initiatives such as our Drug Discovery Investment Board. This Board has now reviewed 75% of our 3-year investment plans for drug discovery, with the remainder expected by year-end.

Issued: Wednesday, 22nd October 2008, London, U.K.		3

We are also seeking to improve productivity and value through externalisation of R&D. This enables us to capture scientific diversity and balance expenditure with risk. We believe new alliances formed this quarter with Cellzome and the Harvard Stem Cell Institute will provide competitive advantage in researching areas such as inflammatory disease, neuroscience and oncology.

With all its option-based collaborations, GSK now has access to products and pipelines of 16 companies, bringing further significant breadth and scale to our R&D activities. Combining this capacity with our own organic efforts provides us opportunities for complementary and synergistic research.

Staying with this theme, Sirtris, our recent R&D acquisition is now effectively integrated into our discovery organisation. Like Domantis, it will continue to operate as an independent unit, but we have also established numerous research collaborations in the field of sirtuins across GSK, including in our new R&D China organisation.

Simplify GSK’s operating model

Activities to improve our overall efficiency and create a new operating model for our business are well underway. Our current operational excellence programme is progressing well and we are on track to realise annual savings of at least £350 million in 2008 and £700 million by 2010. We have also commenced a series of reviews to simplify further our business, in particular, with attention to our above-country support infrastructure.

Financial strategy

We continue to benefit from strong cash generation with net cash inflow from operating activities of over £5 billion, up 6% in sterling terms in the first nine months of this year.

Our financial strategy is focused on maintaining an efficient balance sheet, retaining flexibility to invest in our strategic priorities and increasing returns to our shareholders through our progressive dividend policy. This quarter’s dividend increased by 8% to 14 pence and we have completed share repurchases of £3.3 billion in the 9 months to 30th September 2008. We expect to have completed around £4 billion of repurchases by the year-end, subject to market conditions.

With the recent changes in financial markets we now expect more investment opportunities to arise that will allow us to invest in support of our strategic priorities. To ensure we have sufficient flexibility to take advantage of these opportunities we do not currently expect to make significant share repurchases in 2009. Investment opportunities will continue to be assessed against strict financial criteria.

Outlook

In summary then, our performance is in line with our expectations and I am pleased with how we have so far responded to what is undoubtedly a challenging year for GSK. Nevertheless, we remain focused on improving our short-term performance. We have also, I believe, started to take some initial steps in the right direction to deliver our strategic agenda to improve long-term sales growth and reduce risk for the company.

Andrew Witty

Chief Executive Officer

Issued: Wednesday, 22nd October 2008, London, U.K.		4

Trading Update

Turnover and key product movements impacting turnover growth for the quarter

Total pharmaceutical turnover for the quarter declined 4% to £4.9 billion, with US turnover down 13% to £2.1 billion, impacted by generic competition to mature brands. In Europe, sales grew 6% to £1.6 billion, emerging markets sales grew 9% to £581 million and Asia Pacific/Japan sales grew 5% to £464 million.

Seretide/Advair sales were up 7% to £982 million for the quarter, with sales up 5% in the USA to £515 million and in Japan sales more than doubled to £25 million. Sales growth was also driven by Valtrex, up 21% to £303 million and Lovaza, with US sales of £75 million.

Sales of Avandia products were £191 million, a decline of 23% compared with 2007. There continues to be controversy surrounding the appropriate use of Avandia and consequently the sales outlook for the product remains negative. Lamictal sales declined 59% to £136 million following introduction of generic competition in the US market in July. Sales of Wellbutrin (down 67% to £53 million) and Coreg IR (down 93% to £9 million) also declined due to generic competition in the US market.

Vaccines sales grew 12% to £730 million, with hepatitis vaccines up 11% to £174 million, Infanrix/Pediarix up 9% to £168 million and Fluarix/FluLaval up 11% to £144 million. In the USA, this quarter’s performance reflected a difficult comparison to particularly strong sales growth in Q3 2007. Cervarix generated £43 million of sales for the quarter.

Consumer Healthcare sales grew 3% to £994 million during the quarter, compared with 16% growth in Q3 2007, which benefited from launch-stocking of alli. Excluding sales of alli, Consumer Healthcare sales grew 5% this quarter.

Sales of oral care brands, Aquafresh and Sensodyne, grew 5% and 8% respectively during the quarter, contributing sales of £206 million. Sales of Panadol grew 9% to £82 million, whilst sales of Tums declined 17% to £21 million. Sales of Horlicks grew 10% to £53 million and sales of Lucozade grew 2% to £100 million, principally due to a poor summer in the UK.

Operating profit and earnings per share commentary

Business performance

Business performance operating profit for Q3 2008 was £1,979 million, a 10% decline in CER terms. This was greater than the turnover decline of 3% in CER terms, primarily due to higher cost of sales as a percentage of turnover.

Cost of sales increased to 24.8% of turnover (Q3 2007: 22.5%), principally reflecting the anticipated generic competition to higher margin products in the USA. SG&A costs as a percentage of turnover fell 1.2 percentage points to 28.3% compared with Q3 2007, reflecting the benefits of the current operational excellence programme and other ongoing cost control. R&D expenditure at 14.2% of turnover was broadly unchanged from last year. Pharmaceuticals R&D expenditure in the quarter was 16.4% (Q3 2007: 16.1%) of pharmaceutical turnover.

In the quarter, gains from assets disposals were £21 million (Q3 2007: £22 million), costs for legal matters were £58 million (Q3 2007: £64 million), fair value movements on financial instruments, principally the Quest collar which was closed out in the quarter, resulted in a charge of £37 million (Q3 2007: £32 million) and charges related to previous restructuring programmes were £7 million (Q3 2007: £13 million). The impact of these items on business performance operating profit was broadly neutral, compared with Q3 2007.

Issued: Wednesday, 22nd October 2008, London, U.K.		5

Business performance EPS of 25.2p decreased 9% in CER terms (a 6% increase in sterling terms) compared with Q3 2007. The favourable currency impact of 15 percentage points reflected a weakening of sterling against most major currencies.

Statutory performance

Statutory operating profit for Q3 2008 was £1,657 million, down 13% in sterling terms and down 26% CER compared with Q3 2007. This included £322 million of restructuring charges related to the current operational excellence programme; £130 million was charged to cost of sales, £157 million to SG&A and £35 million to R&D. There were no such charges in Q3 2007. Statutory performance EPS of 20.1p decreased 30% in CER terms (15% in sterling terms) compared with Q3 2007.

Cash flow

Net cash inflow from operating activities in Q3 2008 was £1,893 million, up 3% in sterling terms. For the nine months net cash inflow from operating activities was £5,067 million, a 6% increase in sterling terms over the previous year. This was used to fund net interest payable of £55 million, capital expenditure on property, plant and equipment and intangible assets of £1,284 million, and acquisitions of £324 million.

In addition, dividends paid to shareholders totalled £2,250 million (up 6% compared with 2007) and share repurchases amounted to £3,324 million.

Net debt

Net debt increased by £2.6 billion during the nine month period to £8.6 billion at 30th September 2008, comprising gross debt of £14.2 billion and cash and liquid investments of £5.6 billion.

The Group is well placed financially having completed its debt financing programme earlier in the year. At 30th September 2008, GSK had short-term borrowings (including overdrafts) repayable within 12 months of only £1.4 billion with a further £0.6 billion repayable in the subsequent 12-month period.

Dividends

The Board has declared a third interim dividend of 14 pence per share (Q3 2007: 13p). The equivalent interim dividend receivable by ADR holders is 47.4796 cents per ADS based on an exchange rate of £1/$1.6957. The ex-dividend date will be 29th October 2008, with a record date of 31st October 2008 and a payment date of 8th January 2009.

Currency impact

If exchange rates were to hold at the average Q3 2008 levels for the rest of the year, the positive currency impact on business performance EPS growth for the full year would be around 10 percentage points.

2008 earnings guidance

GSK continues to expect a mid-single digit percentage decline in business performance EPS at constant exchange rates.

Issued: Wednesday, 22nd October 2008, London, U.K.		6

GlaxoSmithKline (GSK) together with its subsidiary undertakings, the ‘Group’ — one of the world’s leading research-based pharmaceutical and healthcare companies — is committed to improving the quality of human life by enabling people to do more, feel better and live longer. GlaxoSmithKline’s website www.gsk.com gives additional information on the Group. Information made available on the website does not constitute part of this document.

Enquiries:		UK Media		Philip Thomson		(020) 8047 5502
				Claire Brough		(020) 8047 5502
				Alice Hunt		(020) 8047 5502
				Gwenan White		(020) 8047 5502
		US Media		Nancy Pekarek		(919) 483 2839
				Sarah Alspach		(215) 751 7709
				Mary Anne Rhyne		(919) 483 2839
		European Analyst / Investor		David Mawdsley		(020) 8047 5564
				Sally Ferguson		(020) 8047 5543
				Gary Davies		(020) 8047 5503
		US Analyst / Investor		Tom Curry		(215) 751 5419

Brand names

Brand names appearing in italics throughout this document are trademarks of GSK or associated companies with the exception of Levitra, a trademark of Bayer, Bonviva/Boniva, a trademark of Roche, Entereg, a trademark of Adolor Corporation in the USA and Vesicare, a trademark of Astellas Pharmaceuticals in many countries and of Yamanouchi Pharmaceuticals in certain countries, all of which are used under licence by the Group.

Cautionary statement regarding forward-looking statements

Under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, the company cautions investors that any forward-looking statements or projections made by the company, including those made in this Announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Group’s operations are described under ‘Risk Factors’ in the ‘Business Review’ in the company’s Annual Report on Form 20-F for 2007.

GlaxoSmithKline plc, 980 Great West Road, Brentford, Middlesex TW8 9GS, United Kingdom Registered in England and Wales. Registered number: 3888792

Issued: Wednesday, 22nd October 2008, London, U.K.		7

Income statement

Three months ended 30th September 2008

		Business
		performance								Restructuring				Statutory				Q3 2007
		Q3 2008				Growth				Q3 2008				Q3 2008				(restated)
		£m				CER%				£m				£m				£m
Turnover:
Pharmaceuticals			4,888				(4	)							4,888				4,591
Consumer Healthcare			994				3								994				885
TURNOVER			5,882				(3	)							5,882				5,476
Cost of sales			(1,460	)			10				(130	)			(1,590	)			(1,232	)
Gross profit			4,422				(6	)			(130	)			4,292				4,244
Selling, general and administration			(1,662	)			(5	)			(157	)			(1,819	)			(1,617	)
Research and development			(834	)			2				(35	)			(869	)			(769	)
Other operating income			53												53				52
Operating profit:
Pharmaceuticals			1,755				(12	)			(311	)			1,444				1,719
Consumer Healthcare			224				3				(11	)			213				191
OPERATING PROFIT			1,979				(10	)			(322	)			1,657				1,910
Finance income			98												98				75
Finance expense			(218	)											(218	)			(117	)
Share of after tax profits of associates and joint ventures			16												16				14
PROFIT BEFORE TAXATION			1,875				(14	)			(322	)			1,553				1,882
Taxation			(559	)							62				(497	)			(536	)
Tax rate %			29.8	%											32.0	%			28.5	%
PROFIT AFTER TAXATION FOR THE PERIOD			1,316				(16	)			(260	)			1,056				1,346
Profit attributable to minority interests			29												29				36
Profit attributable to shareholders			1,287								(260	)			1,027				1,310
			1,316								(260	)			1,056				1,346
EARNINGS PER SHARE			25.2p				(9	)							20.1p				23.7p
Diluted earnings per share			25.0p												20.0p				23.5p

Issued: Wednesday, 22nd October 2008, London, U.K.		8

Turnover

Pharmaceuticals including vaccines
Three months ended 30th September 2008

		Total								USA								Europe								Rest of World
		£m				CER%				£m				CER%				£m				CER%				£m				CER%
Respiratory			1,348				3				636				3				449				—				263				11
Seretide/Advair			982				7				515				5				324				1				143				35
Flixotide/Flovent			149				(4	)			71				(1	)			38				(3	)			40				(10	)
Serevent			60				(14	)			17				(11	)			32				(13	)			11				(23	)
Veramyst			17				>100				12				>100				3				—				2				—
Flixonase/Flonase			33				(39	)			7				(67	)			11				11				15				(32	)
Anti-virals			792				1				398				5				199				(12	)			195				7
HIV			377				(5	)			153				(11	)			150				(6	)			74				11
Epzicom/Kivexa			110				24				44				21				50				19				16				56
Combivir			110				(13	)			41				(26	)			38				(19	)			31				26
Trizivir			49				(20	)			24				(21	)			22				(17	)			3				(25	)
Agenerase, Lexiva			40				(3	)			21				(5	)			15				(8	)			4				25
Epivir			35				(16	)			11				(29	)			13				(27	)			11				22
Ziagen			27				(11	)			10				(17	)			8				(22	)			9				14
Valtrex			303				21				223				28				35				7				45				3
Zeffix			42				(10	)			4				(25	)			7				—				31				(9	)
Relenza			12				(57	)			5				(58	)			—				—				7				>100
Central nervous system			585				(38	)			321				(52	)			142				4				122				(5	)
Lamictal			136				(59	)			84				(71	)			37				(9	)			15				—
Imigran/Imitrex			188				5				154				8				24				(5	)			10				—
Seroxat/Paxil			112				(23	)			13				(67	)			27				(8	)			72				(9	)
Wellbutrin			53				(67	)			44				(72	)			6				100				3				100
Requip			56				(43	)			13				(81	)			35				35				8				60
Requip XL			15				—				4				—				11				—				—				—
Treximet			4				—				4				—				—				—				—				—
Cardiovascular and urogenital			466				12				280				9				130				17				56				13
Avodart			102				29				63				29				29				19				10				67
Lovaza			75				—				75				—				—				—				—				—
Coreg			50				(69	)			49				(69	)			—				—				1				(100	)
Coreg CR			41				19				41				19				—				—				—				—
Coreg IR			9				(93	)			8				(93	)			—				—				1				(100	)
Fraxiparine			59				22				—				—				47				18				12				38
Arixtra			44				56				22				43				19				78				3				50
Vesicare			18				31				18				31				—				—				—				—
Levitra			16				15				15				17				1				—				—				—
Metabolic			289				(11	)			136				(22	)			72				(2	)			81				4
Avandia products			191				(23	)			99				(28	)			48				(16	)			44				(16	)
Avandia			118				(29	)			67				(33	)			20				(31	)			31				(20	)
Avandamet			63				(7	)			26				(14	)			26				—				11				—
Bonviva/Boniva			56				24				36				18				18				60				2				(33	)
Anti-bacterials			340				3				40				(10	)			141				(1	)			159				10
Augmentin			143				10				9				(36	)			62				6				72				24
Altabax			5				>100				4				100				1				—				—				—
Oncology and emesis			128				12				64				13				41				6				23				16
Hycamtin			34				3				20				—				12				10				2				—
Zofran			33				(9	)			6				50				15				(24	)			12				(9	)
Tykerb			26				44				12				—				10				80				4				—
Vaccines			730				12				218				(13	)			323				40				189				12
Hepatitis			174				11				82				17				61				2				31				19
Infanrix/Pediarix			168				9				56				(10	)			89				23				23				28
Fluarix, FluLaval			144				11				63				(19	)			58				55				23				100
Flu-prepandemic			10				(52	)			—				—				10				>100				—				—
Cervarix			43				>100				—				—				38				—				5				>100
Rotarix			39				57				4				—				11				67				24				29
Boostrix			22				(19	)			13				(40	)			7				40				2				100
Other			210				(3	)			8				>100				66				(6	)			136				(12	)
			4,888				(4	)			2,101				(13	)			1,563				6				1,224				5

Pharmaceutical turnover includes co-promotion income.

Issued: Wednesday, 22nd October 2008, London, U.K.		9

Regional pharmaceuticals including vaccines

		Q3 2008
		£m				CER%
USA			2,101				(13	)
Europe			1,563				6
Rest of World			1,224				5
Asia Pacific/Japan			464				5
Emerging markets			581				9
			4,888				(4	)

Turnover

Consumer Healthcare
Three months ended 30th September 2008

		Total								USA								Europe								Rest of World
		£m				CER%				£m				CER%				£m				CER%				£m				CER%
Over-the-counter medicines			476				(1	)			155				(16	)			142				4				179				13
Panadol franchise			82				9				—				—				20				(6	)			62				14
Smoking cessation products			83				3				60				2				13				(8	)			10				33
Tums			21				(17	)			18				(16	)			—				—				3				—
Cold sore franchise			22				—				10				(9	)			8				—				4				50
Breathe Right			19				(5	)			13				(8	)			4				100				2				(50	)
Alli			18				(50	)			18				(50	)			—				—				—				—
Oral healthcare			310				7				54				4				174				7				82				9
Aquafresh franchise			116				5				20				6				72				2				24				15
Sensodyne franchise			90				8				17				14				43				9				30				4
Dental healthcare			68				9				15				—				27				15				26				9
Nutritional healthcare			208				5				—				—				127				1				81				13
Lucozade			100				2				—				—				89				—				11				25
Horlicks			53				10				—				—				5				(17	)			48				14
Ribena			44				2				—				—				33				(3	)			11				25
			994				3				209				(11	)			443				4				342				12

Issued: Wednesday, 22nd October 2008, London, U.K.		10

GSK’s late-stage pharmaceuticals and vaccines pipeline

The following table is provided as part of GSK’s quarterly update to show events and changes to the late stage pipeline during the quarter and up to the date of announcement.

Biopharmaceuticals				USA		EU		News update in the quarter
Bosatria		HES		Ph III		Filed Sept 2008		Filed in EU on 5th September.
belimumab		Lupus		Ph III		Ph III
ofatumumab		CLL / NHL		Ph III		Ph III		Announced positive interim results of CLL study (406) on 31st July.
		RA		Ph III		Ph III
otelixizumab		Type 1 diabetes		Ph III		Ph III		Ph III study started in August.

Cardiovascular & Metabolic				USA		EU		News update in the quarter
Arixtra		Acute Coronary Syndromes		Filed		Approved Aug 2007
Volibris		PAH Class II/III		n/a		Approved April 2008
Avandamet XR		Type II diabetes		Ph III		Ph III		Filing strategy under review.
Avandia + statin		Type II diabetes		Ph III		Ph III		Filing strategy under review.
Coreg CR + ACEi		Hypertension		Ph III		n/a		Filing strategy under review.

Neurosciences				USA		EU		News update in the quarter
Requip XL		Parkinson’s disease		Approved June 2008		Approved Mar 2007
Treximet		Migraine		Approved April 2008		n/a		Filed sNDA for ‘probable migraine’ 23rd September.
Lamictal XR		Epilepsy		Filed		n/a
Lunivia		Sleep disorders		n/a		Filed
Solzira		RLS		Filed		Ph III		Filed with FDA on 16th September.
almorexant		Primary insomnia		Ph III		Ph III		Collaboration with Actelion announced 14th July
retigabine		Epilepsy		Ph III		Ph III		Collaboration with Valeant announced on 28th August.
rosiglitazone XR		Alzheimer’s disease		Ph III		Ph III

Oncology				USA		EU		News update in the quarter
Tykerb/Tyverb		Refractory breast cancer		Approved Mar 2007		Approved June 2008
		First-line / Adjuvant breast cancer		Ph III		Ph III
		Head & neck cancer		Ph III		Ph III
		Gastric Cancer		Ph III		Ph III		Ph III study started in September.
Avodart		Co-Rx with tamsulosin		Approved June 2008		Approved April 2008
		Prostate cancer prevention		Ph III		Ph III
		Fixed dose combination with tamsulosin		Ph III		Ph III
Rezonic/Zunrisa		CINV/PONV		Filed May 2008		Filed July 2008

Issued: Wednesday, 22nd October 2008, London, U.K.		11

Oncology /contd.				USA		EU		News update in the quarter
Promacta/Revolade		Short term ITP		Filed		Ph III		FDA PDUFA extended beyond 19th September.
		Long term ITP		Ph III		Ph III
		Hepatitis C / CLD		Ph III		Ph III
Armala		Renal cell cancer		Ph III		Ph III		Ph II data presented at ESMO in September.
		Sarcoma		Ph III		Ph III		Ph II data presented at ESMO in September.
								Ph III study started in October.
Armala + Tykerb		Inflammatory breast cancer		Ph III		Ph III
elesclomol		Metastatic melanoma		Ph III		Ph III		Ph II data presented at ESMO in September.

Respiratory & Immuno-inflammation				USA		EU		News update in the quarter
Seretide/Advair		COPD exacerbation claim		Approved April 2008		Already in label
Entereg		Post operative ileus		Approved May 2008		n/a		Returned OBD rights to Adolor 2nd September.

Vaccines				USA		EU		News update in the quarter
Rotarix		Rotavirus prophylaxis		Approved April 2008		Approved Feb 2006		US vaccines for Children (VFC) funding commenced on 4th August.
Kinrix		DTaP-IPV prophylaxis		Approved June 2008		n/a		US VFC funding commenced on 4th August.
Cervarix		HPV prophylaxis		Filed		Approved Sep 2007
Prepandrix		H5N1 pandemic influenza prophylaxis		Ph III		Approved May 2008
Synflorix		S pneumoniae and NTHi prophylaxis		Ph III		Filed		US filing strategy under review.
MAGE-A3		NSCLC		Ph III		Ph III
HibMenCY-TT		MenCY and Hib prophylaxis		Ph III		n/a
MenACWY		MenACWY prophylaxis		Ph III		Ph III
New generation flu		Influenza prophylaxis		Ph III		Ph III		Large multi-centre international efficacy study in 43,000 subjects began in September.
Simplirix		Genital herpes prophylaxis		Ph III		Ph III

Issued: Wednesday, 22nd October 2008, London, U.K.		12

Balance sheet

		30th September				30th September				31st December
		2008				2007				2007
		£m				£m				£m
ASSETS
Non-current assets
Property, plant and equipment			8,395				7,464				7,821
Goodwill			1,747				985				1,370
Other intangible assets			4,944				3,721				4,456
Investments in associates and joint ventures			445				313				329
Other investments			454				533				517
Deferred tax assets			2,439				2,278				2,196
Derivative financial instruments			17				132				1
Other non-current assets			465				862				687
Total non-current assets			18,906				16,288				17,377
Current assets
Inventories			3,515				2,965				3,062
Current tax recoverable			50				159				58
Trade and other receivables			5,483				5,030				5,495
Derivative financial instruments			349				89				475
Liquid investments			401				1,084				1,153
Cash and cash equivalents			5,148				2,050				3,379
Assets held for sale			8				4				4
Total current assets			14,954				11,381				13,626
TOTAL ASSETS			33,860				27,669				31,003
LIABILITIES
Current liabilities
Short-term borrowings			(1,387	)			(1,994	)			(3,504	)
Trade and other payables			(5,143	)			(5,142	)			(4,861	)
Derivative financial instruments			(195	)			(75	)			(262	)
Current tax payable			(1,058	)			(1,217	)			(826	)
Short-term provisions			(1,015	)			(601	)			(892	)
Total current liabilities			(8,798	)			(9,029	)			(10,345	)
Non-current liabilities
Long-term borrowings			(12,801	)			(4,885	)			(7,067	)
Deferred tax liabilities			(652	)			(831	)			(887	)
Pensions and other post-employment benefits			(2,312	)			(1,331	)			(1,383	)
Other provisions			(1,129	)			(1,002	)			(1,035	)
Derivative financial instruments			—				(72	)			(8	)
Other non-current liabilities			(371	)			(357	)			(368	)
Total non-current liabilities			(17,265	)			(8,478	)			(10,748	)
TOTAL LIABILITIES			(26,063	)			(17,507	)			(21,093	)
NET ASSETS			7,797				10,162				9,910
EQUITY
Share capital			1,423				1,506				1,503
Share premium account			1,322				1,218				1,266
Retained earnings			4,099				6,818				6,475
Other reserves			642				337				359
Shareholders’ equity			7,486				9,879				9,603
Minority interests			311				283				307
TOTAL EQUITY			7,797				10,162				9,910

Issued: Wednesday, 22nd October 2008, London, U.K.		13

Net assets

The book value of net assets decreased by £2,113 million from £9,910 million at 31st December 2007 to £7,797 million at 30th September 2008. This reflects an increase in net debt arising from the funding of the share buy-back programme and dividend payments, together with an increase in the pension deficit. The increase in the pension deficit arose predominantly from a reduction in asset values and an increase in the estimated long-term UK inflation rate, partially offset by an increase in the rate used to discount UK pension liabilities from 5.75% to 6.50%. At 30th September 2008, the net deficit on the Group’s pension plans was £1,192 million compared with a net deficit at 31st December 2007 of £156 million.

The carrying value of investments in associates and joint ventures at 30th September 2008 was £445 million, with a market value of £1,146 million.

In Q3 2008, GSK repurchased and cancelled £865 million of shares. The number of shares in issue at 30th September 2008, excluding those held by the ESOP Trusts and those held as Treasury shares, was 5,089 million (30th September 2007: 5,465 million).

Legal matters

The Group is involved in various legal and administrative proceedings principally product liability, intellectual property, tax, anti-trust and governmental investigations and related private litigation concerning sales, marketing and pricing which are more fully described in the ‘Legal proceeding’ note in the Annual Report 2007.

At 30th September 2008, the Group’s aggregate provision for legal and other disputes (not including tax matters described under ‘Taxation’ on page 15) was £1.2 billion. The ultimate liability for legal claims may vary from the amounts provided and is dependent upon the outcome of litigation proceedings, investigations and possible settlement negotiations.

Significant developments since the date of the Annual Report 2007 (as previously updated by the legal matters section of the Results Announcements for Q1 and Q2 2008) are as follows:

With respect to the Group’s action against Teva Pharmaceuticals relating to the Group’s combination patent regarding Combivir, the Group received an additional certification in October 2008 related to Teva’s ANDA for Combivir alleging that the Group’s patent covering the crystal form of lamivudine, one of the active ingredients in Combivir, is invalid or not infringed. The patent expires in 2016. The Group is evaluating the certification. Teva has not challenged the Group patent relating to Combivir that expires in 2010.

In October 2008, the Group received a letter from Par Pharmaceuticals confirming that the FDA has accepted its ANDA for Treximet, which included a certification of invalidity, unenforceability and/or non-infringement of several patents covering Treximet that are owned by Pozen and licensed to the Group. Pozen has the right to bring actions for infringement of these patents. Treximet has data exclusivity until April 2011.

With respect to the private indirect purchaser opt-out lawsuit brought in the Minnesota state courts relating to Paxil, such lawsuit has been settled. The terms of the settlement are confidential.

With respect to the complaint filed against Biovail and GSK by a purported class of direct purchasers alleging anti-trust violations relating to the enforcement of Biovail’s Wellbutrin XL patents, a separate complaint has also been filed against the Group and Biovail by a purported class of indirect purchasers. Each of the Group and Biovail has filed motions to dismiss both of the complaints.

With respect to the Avandia securities litigation, the Group’s motion to dismiss the complaint was granted and the trial court subsequently denied the plaintiffs’ motion for reconsideration. The plaintiffs have filed a notice of appeal with the US Court of Appeals for the Second Circuit. The Group plans to respond to the appeal.

Developments with respect to tax matters are described in ‘Taxation’ on page15.

Issued: Wednesday, 22nd October 2008, London, U.K.		14

Taxation

Transfer pricing and other issues are as previously described in the ‘Taxation’ note to the Financial Statements included in the Annual Report 2007. In relation to the dispute with the IRS regarding deductions arising from inter-company financing arrangements, GSK received a Notice of Deficiency against which it filed a petition in the US Tax Court on 4th August. There have been no material changes to other tax matters since the publication of the Results Announcement for Q2 2008.

As expected, the tax rate on business performance profit for Q3 2008 rose to 29.8% reflecting the cumulative effect of changes in the recently enacted UK Finance Act relating to restrictions on tax allowances. The year-to-date business performance rate of 29% is more indicative of the expected full-year tax charge.

GSK uses the best advice in determining its transfer pricing methodology and in seeking to manage all of its tax affairs to a satisfactory conclusion and, based on external professional advice, continues to believe that it has made adequate provision for the liabilities likely to arise from open assessments. The ultimate liability for such matters may vary from the amounts provided and is dependent upon the outcome of litigation proceedings and negotiations with the relevant tax authorities.

Accounting presentation and policies

This unaudited Results Announcement containing condensed financial information for the three and nine months ended 30th September 2008 is prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority and the accounting policies set out in the Annual Report 2007.

This Results Announcement does not constitute statutory accounts of the Group within the meaning of section 240 of the Companies Act 1985. The balance sheet at 31st December 2007 has been derived from the full Group accounts published in the Annual Report 2007, which has been delivered to the Registrar of Companies and on which the report of the independent auditors was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985.

Comparative information restatement

As reported in the Results Announcement for Q2 2008 the regional reporting structure within the Pharmaceuticals business has been realigned together with the allocation of entities and expenses between the Pharmaceuticals and Consumer Healthcare businesses. As a result, comparative information has been restated onto a consistent basis and the effect of the restatements on each quarter in 2007 and on Q1 2008 is available on the company’s website. These reallocations have no impact on Group turnover or Group operating profit.

		Paid/				Pence per
Dividends		payable				share				£m
2008
First interim		10th July 2008					13				683
Second interim		9th October 2008					13				679
Third interim		8th January 2009					14				712
2007
First interim		12th July 2007					12				670
Second interim		11th October 2007					12				667
Third interim		10th January 2008					13				708
Fourth interim		10th April 2008					16				859
							53				2,904