Edgar Filing: GLAXOSMITHKLINE PLC

6-K

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 July 2009

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.


Date: July 22nd 2009	GlaxoSmithKline plc (Registrant)



	By:	/s/ Victoria Whyte VICTORIA WHYTE Authorised Signatory for and on behalf of GlaxoSmithKline plc


Press Release


		Issued: Wednesday, 22nd July 2009, London, U.K. Results announcement and interim management report for the second quarter and half year 2009 *GSK delivers Q2 EPS of 31p before major restructuring and dividend of 14p up 8% - Improving performance to continue in second half of 2009 - Good progress made to deliver strategic priorities**

Results before major restructuring*


	Q2 2009							H1 2009
	£m		CER%			£%		£m		CER%			£%
Turnover		6,747		(2	)		15		13,516		(3	)		17
Earnings per share		31.0p		(4	)		14		57.3p		(16	)		8

Total results


	Q2 2009							H1 2009
	£m		CER%			£%		£m		CER%			£%
Turnover		6,747		(2	)		15		13,516		(3	)		17
Restructuring charges		186							450
Earnings per share		28.3p		(4	)		15		50.6p		(21	)		3


The full results are presented under ‘Income Statement’ on pages 10 and 17.

*		For explanations of the measures ‘results before major restructuring’ and ‘CER growth’, see page 9.

Summary

•		EPS before major restructuring 31p down 4% CER, up 14% in sterling terms; improving performance to continue in H2 2009

•		Group turnover £6.7 billion (-2%) due to generic competition to US pharmaceuticals

•		Strong sales growth in Consumer to £1.2 billion (+9%), Vaccines to £0.8 billion (+14%)

•		Emerging Markets £0.7 billion (+14%); 4 ‘bolt on’ transactions announced in Q2

•		New products contributed £377 million to Q2 sales (Q1: £265 million)

•		H1N1 vaccine contracts for 195 million doses received; *Relenza* capacity expected to triple to 190 million doses per year by end 2009

•		*Menhibrix* — new meningitis vaccine for infants aged 2 months — to be filed in US in H2

•		Horizon programme to enter phase III development for COPD in October



Press Release

GSK’s strategic priorities

GSK has focused its business around the delivery of three strategic priorities, which aim to increase growth, reduce risk and improve GSK’s long-term financial performance:

•		Grow a diversified global business

•		Deliver more products of value

•		Simplify GSK’s operating model

Chief Executive Officer’s review

Today’s results indicate a marked improvement on the first quarter and I expect this to continue in the second half of 2009 as the year-on-year comparative effect of US generic competition reduces and we see further sales contributions from new products and our influenza portfolio.

I am also pleased with the progress we have made to change GSK since I set out our new strategic priorities last year.

In the second quarter, Group turnover was down 2%, impacted by the performance of our US pharmaceuticals business, where sales declined 15% to £2.3 billion.

In contrast, revenues across all other areas of GSK’s business grew. We saw particularly strong performances in key investment areas such as Emerging Markets, up 14% to £0.7 billion and Consumer Healthcare with sales up 9% to £1.2 billion.

I would also like to emphasise the progress of our new products. Altogether, these contributed £377 million to sales in the second quarter, compared to £265 million in the first quarter of 2009. Sales of new vaccines, Rotarix and Cervarix, were significant contributors to this growth.

The outlook for our US business is improving; however, we are in the midst of a key period of transition for this business. We are working through a phase of extensive generic competition and building new capabilities to compete effectively in what is a rapidly changing environment for the pharmaceutical industry.

The scale of change we are undertaking in the USA is significant and I am confident that we are on the right path to maximise the opportunities of our new product portfolio and deliver long-term future growth. GSK currently has 6 products filed with the FDA and 12 new products have been launched in the USA since 2007.

Grow a diversified global business

Increasing diversification of GSK’s business is core to our strategy and I am pleased to see evidence of our move towards a more balanced business. 31% of sales generated in the second quarter could be categorised as ‘white pill/western market.’ This compares to 38% in the second quarter of last year. This quarter also saw 17 products generate sales of more than £100 million, compared to 14 this time last year.

These trends reflect the impact of the investments we are making to broaden GSK’s portfolio and geographic sales contribution.

Over the last twelve months, we have entered into 8 transactions to accelerate sales growth in Emerging Markets. Four of these transactions were announced this quarter: an extension of our partnership with Aspen, a new alliance with Dr Reddy’s, further product acquisitions from BMS and a commitment to establish a joint venture in China with Neptunus to develop influenza vaccines.

Progress of our emerging markets strategy is demonstrated by the increasing sales contribution of this region. Aggregate sales this quarter represented 13% of pharmaceutical revenue, 1.5 percentage points higher than the second quarter last year.

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

I continue to see Japan as another key growth market for GSK. New products have contributed more than £100 million in revenue so far this year, and sales of Adoair alone are tracking at a level of more than £150 million for full year 2009.

Over the next 2 years, we expect to launch many more products in Japan including new molecular entities, such as Avolve/Avodart, Cervarix, Volibiris and Revolade. We also have opportunities to supplement currently marketed products with new indications, for example Lamictal to treat bipolar disorder.

During the quarter, we saw the emergence of pandemic (H1N1) 2009 influenza as a global pandemic threat.

GSK has made substantial investments of more than $2 billion to develop and manufacture vaccines and treatments for influenza. Since the outbreak of the virus, we have committed additional investment to increase production levels of Relenza and effectively develop a new adjuvanted H1N1 vaccine.

By the end of 2009, we now expect to have an annual production capacity of Relenza of 190 million treatment courses. This will represent more than a threefold increase to our previously announced maximum capacity of 60 million courses. We will be achieving this by increasing production levels of Relenza Diskhaler and building new capacity for manufacture of Relenza Rotacaps.

Last month, we started production of an H1N1 adjuvanted vaccine and we are on track to meet the orders placed by many governments and the WHO for the vaccine and our novel adjuvant. To date we have contracts in place to supply 195 million doses of the vaccine. We also have a variety of agreements in place with the US Government to supply pandemic products worth $250 million. Discussions with over 50 governments are ongoing, with many at advanced stages, and I therefore expect further significant orders. Shipments are expected in the second half of 2009 and early 2010.

We have also announced donations to the WHO for supplies of the vaccine and Relenza for use in developing countries; and we are reserving production capacity to support these nations.

In these last 3 months, governments have rapidly strengthened their pandemic stockpile and prevention strategies, and whilst we are currently seeing a heightened period of demand, it is likely that we will see a sustained level of orders for pandemic products over the next few years.

The energy we have created to drive forward our Consumer Healthcare business is now very evident with Q2 growth of 9% versus estimated global market growth of 1%. Sales grew at double-digit rates in European and Rest of World markets and I was especially pleased to see growth in the USA sustained from the first quarter. Over the last 12 months, we have significantly restructured the US part of the consumer business and re-focused our investment.

Importantly, we are continuing to gain market share, even in static markets. Consumption of our oral healthcare products, for example, grew by 3% in the USA and 4% in the UK compared to category growth of 0% and 1% respectively.

These gains in sales and market share are strong validation of our brand innovation capability and our strategy to maintain levels of A&P investment. Brand innovations launched in the last 3 years contributed sales of more than £100 million this quarter.

One of the key drivers of growth for our Consumer business in the quarter was the European launch of alli, our new anti-obesity treatment; alli reached consumers in 24 markets in just 8 weeks and was the single biggest driver of European OTC category growth in the quarter. The product is well on its way to becoming a major global OTC brand and we will start to launch it in markets outside the USA and Europe in the third quarter.

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

Deliver more products of value

During the quarter, I have visited many of our new Discovery Performance Units and I am delighted with the speed and energy that is evident in these labs. We also continue to externalise our R&D efforts and, in the quarter, signed two new development agreements with Concert Pharmaceuticals and Chroma Therapeutics.

We are now focusing on improving productivity and return on investment within our Development organisation, and I have personally joined one of the teams involved in this project.

We continue to maintain around 30 products in the late-stage pipeline and over the last 12 months, have seen good progress of assets moving through development, with initiation of 7 new phase III programmes. Over this same period, we terminated investment in 5 assets, as they were unable to demonstrate either sufficient risk:benefit or differentiation.

These numbers point to a stability in GSK’s R&D productivity, but also highlight that product development remains challenging and that disciplined allocation of capital in R&D is paramount.

Today, we have announced two key developments in the late-stage pipeline. We now intend to file Menhibrix in the USA during the second half of 2009. This is a new vaccine to prevent meningitis in infants aged two months and above. As potentially the first vaccine for use with this age group, it will meet a currently unmet medical need.

We have also announced that phase III trials of our Horizon respiratory development programme will start in COPD in October.

Two other significant events are worth noting. Phase III results were announced earlier this week for Benlysta, which has the potential to become the first new treatment for systemic lupus in more than 50 years. In addition, phase III trials started this quarter for Mosquirix, our vaccine to prevent malaria, a disease which continues to be one of the global community’s greatest public health challenges.

We presented meaningful clinical data for several key oncology assets this quarter: Cervarix, Avodart and pazopanib. All these data are supportive of effective product differentiation and their potential value to patients and payers.

Simplify GSK’s operating model

We are making good progress to deliver cost reduction through our restructuring programme. Cumulative annualised cost savings amount to £900 million and we are very much on track to deliver our target of £1.7 billion annual pre-tax cost savings by 2011.

So far, we have made changes to our commercial model in traditional and emerging markets, we have restructured our drug discovery operations and we continue to streamline our Global Manufacturing and Supply organisation, including divestments and site closures. As part of our restructuring programme, we have also started to reduce costs in our support functions to realise a target cost reduction of 20% in these areas by 2011.

Our programme to reduce working capital is also progressing well and has now delivered underlying cash flow benefits of over £1 billion to improve our cost base.

Delivering cost reduction though is not enough. We must also do more to simplify our operations. Of all the areas where we have made progress in the last 12 months, this is one in which I want to see an acceleration of activity. We have instigated a further series of programmes to do this, including a move towards a single Enterprise Resource Planning (ERP) platform.

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

Outlook

We have made substantive progress on many levels to deliver our strategic priorities to positively affect both short and long-term performance.

This includes strengthening our Emerging Markets business and maximising the value of our core portfolio; targeted non-core product divestments; re-energising our Consumer Healthcare business; developing more balanced and disciplined means to allocate R&D capital and significantly accelerating our costs savings programme.

However, these are only the first steps that GSK must take to catalyse the opportunity I set out a year ago of creating a more balanced business which delivers sustainable growth. I am confident that we can achieve this goal and capitalise on our improving outlook for 2009.

Andrew Witty
Chief Executive Officer

A video interview with Andrew Witty discussing today’s results and GSK’s strategic progress is available on www.gsk.com or www.cantos.com

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

Trading update

Turnover and key product movements impacting performance — Q2 2009

Total group turnover fell 2% to £6.7 billion, with a decline in total pharmaceutical turnover of 4% to £5.6 billion partially offset by strong growth from the Consumer Healthcare division, up 9% to £1.2 billion.

Within pharmaceuticals, US turnover declined 15% to £2.3 billion as this business continues to be impacted by generic competition to several mature brands. Outside the USA, European sales grew 1% to £1.7 billion, sales in Emerging Markets grew 14% to £720 million and sales in Asia-Pacific/Japan rose 6% to £609 million.

Seretide/Advair sales grew 9% in the quarter to £1.2 billion, with US sales up 7% to £648 million and European sales up 3% to £401 million. Total Advair growth was boosted by the particularly strong performance of the product in Emerging Markets (up 17% to £73 million) and in Japan (sales more than doubled to £47 million) where Adoair is now approved for both asthma and COPD and GSK recently entered a co-promotion agreement with Tanabe. Other strong respiratory product performances included Veramyst, sales of which more than doubled to £47 million, and Ventolin which grew 23% to £112 million driven by a strong US performance where the product is benefiting from successful retail contracting initiatives.

Vaccines sales grew 14% to £756 million with growth in all regions: USA (up 22% to £196 million), Europe (up 7% to £320 million) and Rest of World (up 20% to £240 million). The overall vaccine performance included strong contributions from both Cervarix, which more than doubled to £73 million, and Rotarix, which grew 69% to £71 million in the quarter. These contributions were offset to some extent by the continued pressure on the Infanrix/Pediarix franchise (down 20% to £154 million) from increased competition in the DTPa segment.

Relenza sales were £60 million in the quarter (Q2 2008: £3 million) reflecting continued orders from governments across the world for pandemic stock-piling. Other strong pharmaceutical sales performances in the quarter included Valtrex (up 9% to £379 million), Avodart (up 21% to £134 million) and Lovaza (up 22% to £104 million).

Total sales of HIV products were down 10% to £382 million due to the declining use of older combinations such as Combivir (down 17% to £102 million) and Trizivir (down 18% to £48 million). GSK’s newer medicine Epzicom/Kivexa grew 6% to £129 million.

Product sales significantly impacted by generic competition in the USA included: Lamictal (down 73% to £103 million), Imigran/Imitrex (down 65% to £68 million) and Flonase (down 46% to £39 million).

Sales of Wellbutrin were £30 million, down 72%, reflecting the sale in May 2009 of commercial rights to Wellbutrin XL in the USA to Biovail International Laboratories for $510 million (£340 million).

Total Consumer Healthcare sales grew 9% to £1.2 billion with growth across all regions: Europe up 10% to £505 million, Rest of World up 11% to £406 million and USA up 3% to £254 million.

Sales of oral healthcare products were up 7% to £366 million with continued strong growth of Sensodyne (up 14% to £113 million). Aquafresh franchise sales were down 1% to £121 million. Sales of the newly acquired dry mouth product, Biotene, were £6 million. Nutritional sales were £226 million, up 2%, as strong growth from Horlicks (up 17% to £61 million) helped offset a sales decline in Lucozade (down 4% to £106 million) which continued to be impacted by lower sales in the ‘impulse segment’ of the market. OTC product sales grew 13% to £573 million. The launch of anti-obesity treatment alli throughout Europe started during the quarter helping to more than double the product’s global sales to £82 million. Other strong OTC performances included smoking cessation products (up 12% to £88 million) and the Panadol franchise (up 8% to £94 million), helped by the acquisition of Alvedon.

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

Operating profit and earnings per share commentary — Q2 2009

Results before major restructuring

Operating profit before major restructuring for Q2 2009 was £2,381 million, a 6% decline in CER terms.

Cost of sales was 24.0% of turnover, slightly below Q1 2009 but higher than prior year (Q2 2008: 23.4%), principally reflecting the impact of generic competition to higher margin products in the USA.

SG&A costs as a percentage of turnover increased to 33.0% in the quarter. This reflected investment in growth markets, increased legal costs and significant exchange losses on inter-company transactions, partially offset by the benefits of the restructuring programme. Excluding legal costs of £85 million and exchange losses of £95 million, SG&A costs were 30.3% of turnover (Q2 2008: 30.0%). The company now expects SG&A costs, excluding legal charges to be around 29% of turnover in 2009 (2008: 27.7%).

R&D expenditure was 13.7% of turnover in the quarter, in line with Q2 2008.

In the quarter, gains from asset disposals were £346 million (Q2 2008: £167 million), costs for legal matters were £85 million (Q2 2008: £3 million income) and fair value movements on financial instruments were nil (Q2 2008: £34 million charge).

Other operating income in the quarter was £405 million including asset disposals of £346 million, primarily reflecting the disposal of Wellbutrin XL, and royalty income of £59 million (Q2 2008: £68 million), partially offset by some equity investment impairments.

EPS before major restructuring of 31.0p decreased 4% in CER terms (a 14% increase in sterling terms) compared with Q2 2008. The favourable currency impact of 18 percentage points reflected the weakness of Sterling against most major currencies, compared with last year.

The current restructuring programme has achieved annualised cost savings of £900 million and remains on track to deliver cumulative annual savings of £1.7 billion by the end of 2011.

Total results after restructuring

Operating profit after restructuring for Q2 2009 was £2,195 million, a 5% decline in CER terms. This included £186 million of restructuring charges related to the current restructuring programme (Q2 2008: £187 million); £71 million was charged to cost of sales (Q2 2008: £138 million), £65 million to SG&A (Q2 2008: £31 million) and £50 million to R&D (Q2 2008: £18 million). EPS after restructuring of 28.3p decreased 4% in CER terms (a 15% increase in sterling terms) compared with Q2 2008.

Cash flow and net debt

Net cash inflow from operating activities for H1 2009 was £3,499 million, up 10% in sterling terms. This was used to fund net interest of £326 million, capital expenditure on property, plant and equipment and intangible assets of £850 million, acquisitions of £673 million and the dividend paid to shareholders of £1,586 million.

Net debt decreased by £1.6 billion (£1.3 billion due to exchange movements) during the period to £8.6 billion at 30th June 2009, comprising gross debt of £14.2 billion and cash and liquid investments of £5.6 billion.

At 30th June 2009, GSK had short-term borrowings (including overdrafts) repayable within 12 months of £1.2 billion with no further borrowings repayable in the subsequent year.

On 6th July 2009, GSK issued a €1.6 billion bond under its Euro Medium Term Note programme. The bond matures on 6th July 2015 and has a coupon of 3.875%.

Issued: Wednesday, 22nd July 2009, London, U.K.




Press Release

Dividends

The Board has declared a second interim dividend of 14 pence per share (Q2 2008: 13 pence), making 28 pence for the half year. The equivalent interim dividend receivable by ADR holders is 46.0936 cents per ADS based on an exchange rate of £1/$1.6462. The ex-dividend date will be 29th July 2009, with a record date of 31st July 2009 and a payment date of 8th October 2009.

Currency impact

The Q2 results are based on average exchange rates, principally £1/$1.56, £1/€1.13 and £1/Yen 150. The H1 exchange rates are given on page 31. The period end exchange rates were £1/$1.65, £1/€1.17 and £1/Yen 159. If exchange rates were to hold at these period end levels for the rest of 2009, the estimated positive impact on full year 2009 sterling EPS growth before major restructuring would be approximately 15 percentage points.


Contents	Page
Q2 2009 results summary		1
Chief Executive Officer’s review		2
Trading update		6

Income statement — three months ended 30th June 2009		10

Pharmaceuticals turnover — three months ended 30th June 2009		11

Consumer Healthcare turnover — three months ended 30th June 2009		12

Late-stage pipeline		13

Income statement — six months ended 30th June 2009		17

Pharmaceuticals turnover — six months ended 30th June 2009		18

Consumer Healthcare turnover — six months ended 30th June 2009		19

Statement of comprehensive income		19

Balance sheet		20

Cash flow statement — six months ended 30th June 2009		21

Statement of changes in equity		22

Segmental information		23

Legal matters		27

Additional information		28

Directors’ responsibility statement		32

Investor information		32

Auditors’ review report		33

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

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
		Alexandra Harrison	(020) 8047 5502
		David Outhwaite	(020) 8047 5502
		Stephen Rea	(020) 8047 5502

	US Media	Nancy Pekarek	(919) 483 2839
		Mary Anne Rhyne	(919) 483 2839
		Kevin Colgan	(919) 483 2839
		Lisa Behrens	(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
		Jen Hill Baxter	(215) 751 7002

Results before major restructuring

Results before major restructuring is a measure used by management to assess the Group’s financial performance and is presented after excluding restructuring charges relating to the Operational Excellence programme, which commenced in October 2007 and the acquisition of Reliant Pharmaceuticals in December 2007. Management believes that this presentation assists shareholders in gaining a clearer understanding of the Group’s financial performance and in making projections of future financial performance, as results that include such costs, by virtue of their size and nature, have limited comparative value.

CER growth

In order to illustrate underlying performance, it is the Group’s practice to discuss its results in terms of constant exchange rate (CER) growth. This represents growth calculated as if the exchange rates used to determine the results of overseas companies in Sterling had remained unchanged from those used in the comparative period. All commentaries are presented in terms of CER growth, unless otherwise stated.

Brand names and partner acknowledgements

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, 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 2008.

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

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Income statement

Three months ended 30^th June 2009


	Results												Results
	before major						Major						before major			Major
	restructuring						restructuring			Total			restructuring			restructuring			Total
	Q2 2009						Q2 2009			Q2 2009			Q2 2008			Q2 2008			Q2 2008
	£m			CER%			£m			£m			£m			£m			£m
TURNOVER		6,747			(2	)					6,747			5,874						5,874

Cost of sales		(1,621	)		6			(71	)		(1,692	)		(1,375	)		(138	)		(1,513	)

Gross profit		5,126			(4	)		(71	)		5,055			4,499			(138	)		4,361

Selling, general and administration		(2,227	)		3			(65	)		(2,292	)		(1,765	)		(31	)		(1,796	)
Research and development		(923	)		—			(50	)		(973	)		(802	)		(18	)		(820	)
Other operating income		405									405			194						194

OPERATING PROFIT		2,381			(6	)		(186	)		2,195			2,126			(187	)		1,939

Finance income		18									18			96						96
Finance costs		(166	)					(2	)		(168	)		(214	)					(214	)
Share of after tax profits of associates and joint ventures		17									17			15						15


PROFIT BEFORE TAXATION		2,250			(6	)		(188	)		2,062			2,023			(187	)		1,836

Taxation		(652	)					51			(601	)		(577	)		48			(529	)
Tax rate %		*29.0*	%								*29.1*	%		28.5	%					28.8	%

PROFIT AFTER TAXATION FOR THE PERIOD		1,598			(7	)		(137	)		1,461			1,446			(139	)		1,307


Profit attributable to minority interests		26									26			21						21
Profit attributable to shareholders		1,572						(137	)		1,435			1,425			(139	)		1,286

		1,598						(137	)		1,461			1,446			(139	)		1,307


EARNINGS PER SHARE		31.0p			(4	)					28.3p			27.2p						24.6p


Diluted earnings per share		30.8p									28.1p			27.0p						24.4p

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Pharmaceuticals turnover

Three months ended 30^th June 2009


	Total					USA					Europe					Rest of World
	£m		CER%			£m		CER%			£m		CER%			£m		CER%
Respiratory		1,734		6			825		5			550		2			359		16
Avamys/Veramyst		47		>100			18		7			16		>100			13		>100
Flixonase/Flonase		39		(46	)		8		(82	)		12		(25	)		19		6
Flixotide/Flovent		189		1			97		12			43		(5	)		49		(11	)
Seretide/Advair		1,245		9			648		7			401		3			196		27
Serevent		59		(21	)		18		(13	)		29		(18	)		12		(38	)
Ventolin		112		23			32		>100			36		3			44		(3	)
Zyrtec		17		63			—		—			—		—			17		63

Anti-virals		952		5			496		10			236		(2	)		220		5
HIV		382		(10	)		164		(8	)		156		(14	)		62		(5	)
Agenerase, Lexiva		43		(8	)		23		6			16		(13	)		4		(50	)
Combivir		102		(17	)		44		(15	)		37		(25	)		21		(5	)
Epivir		31		(24	)		11		(18	)		12		(33	)		8		(13	)
Epzicom/Kivexa		129		6			50		—			59		—			20		55
Trizivir		48		(18	)		25		(13	)		20		(25	)		3		—
Ziagen		25		(19	)		11		(18	)		9		(20	)		5		(20	)

Valtrex		379		9			291		16			39		(3	)		49		(15	)

Relenza		60		>100			19		>100			25		>100			16		—
Zeffix		55		(4	)		5		(25	)		8		17			42		(5	)

Central nervous system		449		(53	)		142		(79	)		144		(8	)		163		4
Imigran/Imitrex		68		(65	)		33		(79	)		23		(13	)		12		—
Lamictal		103		(73	)		45		(86	)		38		(8	)		20		(6	)
Requip		51		(22	)		6		(78	)		35		3			10		—
Requip XL		30		>100			8		—			22		>100			—		—
Seroxat/Paxil		138		(13	)		13		(31	)		27		(19	)		98		(8	)
Treximet		12		25			12		25			—		—			—		—
Wellbutrin, Wellbutrin XL		30		(72	)		20		(81	)		7		100			3		(20	)

Cardiovascular and urogenital		580		10			360		12			145		2			75		19
Arixtra		61		39			33		63			23		24			5		—
Avodart		134		21			83		16			37		21			14		44
Coreg, Coreg CR		51		(9	)		50		(7	)		—		—			1		(100	)
Fraxiparine		58		(9	)		—		—			43		(15	)		15		17
Levitra		18		8			17		—			1		—			—		—
Lovaza		104		22			104		24			—		—			—		—
Vesicare		26		31			26		31			—		—			—		—
Volibris		4		—			—		—			4		—			—		—

Metabolic		303		(12	)		149		(17	)		71		(11	)		83		(4	)
Avandia products		198		(14	)		107		(19	)		46		(18	)		45		2
Avandia		121		(19	)		71		(22	)		18		(20	)		32		(12	)
Avandamet		67		(7	)		29		(8	)		26		(18	)		12		38
Bonviva/Boniva		66		(2	)		41		(11	)		23		6			2		100

Anti-bacterials		381		3			46		(8	)		146		(4	)		189		12
Augmentin		146		2			11		13			61		—			74		3

Oncology and emesis		166		19			88		19			50		12			28		32
Hycamtin		43		3			24		5			15		17			4		(50	)
Promacta		3		—			3		—			—		—			—		—
Tyverb/Tykerb		41		64			17		18			18		88			6		>100
Zofran		30		(16	)		4		(25	)		14		(25	)		12		—

Vaccines		756		14			196		22			320		7			240		20
Boostrix		39		78			21		78			10		14			8		>100
Cervarix		73		>100			—		—			63		>100			10		100
Fluarix, FluLaval		14		>100			3		—			—		—			11		83
Flu Pre-Pandemic		30		(26	)		25		—			5		(86	)		—		—
Hepatitis		195		(2	)		87		2			72		(8	)		36		7
Infanrix, Pediarix		154		(20	)		38		(43	)		91		(13	)		25		(4	)
Rotarix		71		69			22		—			12		20			37		20
Synflorix		12		—			—		—			10		—			2		—
Other		261		(1	)		2		>100			84		—			175		(4	)

		5,582		(4	)		2,304		(15	)		1,746		1			1,532		10

Pharmaceutical turnover includes co-promotion income.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Consumer Healthcare turnover

Three months ended 30th June 2009


	Total					USA					Europe					Rest of World
	£m		CER%			£m		CER%			£m		CER%			£m		CER%
Over-the-counter medicines		573		13			183		1			185		31			205		8
Alli		82		>100			25		12			56		—			1		—
Breathe Right		20		(6	)		10		(20	)		5		—			5		33
Cold sore franchise		20		(11	)		9		(22	)		8		—			3		—
Nicotene replacement therapy		88		12			68		13			15		8			5		20
Panadol		94		8			—		—			20		11			74		7
Tums		25		(5	)		22		(5	)		—		—			3		—

Oral healthcare		366		7			71		10			190		4			105		13
Aquafresh franchise		121		(1	)		21		(6	)		71		(2	)		29		(4	)
Biotene		6		—			5		—			1		—			—		—
Denture care		84		9			20		—			32		7			32		17
Sensodyne franchise		113		14			23		20			50		7			40		21

Nutritional healthcare		226		2			—		—			130		(5	)		96		14
Horlicks		61		17			—		—			4		(20	)		57		21
Lucozade		106		(4	)		—		—			92		(5	)		14		8
Ribena		44		(2	)		—		—			33		(6	)		11		11

		1,165		9			254		3			505		10			406		11

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

GSK’s late-stage pharmaceuticals and vaccines pipeline

The table below 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.

The following assets were listed as approved or terminated in the last quarterly update and are no longer included in the table: rosiglitazone XR, Synflorix


Biopharmaceuticals		USA	EU	News update in the quarter
Mepolizumab	HES	Ph III	Filed	US filing strategy under review.
Arzerra (ofatumumab)	CLL	Filed Jan 2009	Filed Feb 2009	Positive FDA ODAC review 29th May 2009. PDUFA date moved to 31st October 2009 for FDA to review additional chemistry and manufacturing data submitted 5th June 2009.

	NHL	Ph III	Ph III
	RA	Ph III	Ph III
Benlysta (belimumab)	Systemic lupus	Ph III	Ph III	Positive Phase III results announced 20th July.
Otelixizumab	Type 1 diabetes	Ph III	Ph III
Syncria	Type 2 diabetes	Ph III	Ph III	Phase IIB data presented at ADA.

Cardiovascular
& Metabolic		USA	EU	News update in the quarter
Arixtra	Acute coronary syndromes	Filed	Approved
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.
Tyrisa (darapladib)	Atherosclerosis	Ph III	Ph III

Neurosciences		USA	EU	News update in the quarter
Lamictal XR/ODT	Epilepsy	Approved May 2009	n/a	ODT approved 8th May 2009. XR approved 29th May 2009. XR filing for Primary Generalised Tonic Clonic accepted by FDA 8th June 2009.
Lunivia	Sleep disorders	n/a	Filed	EU commercialisation agreement with Sepracor jointly terminated 30th April 2009.
Solzira	RLS	Filed Jan 2009	Ph III	RLS PDUFA date 9th November 2009. Phase II PDN data available 27th April 2009. Solzira did not differentiate from active or placebo in this study.
Almorexant	Primary insomnia	Ph III	Ph III
Retigabine	Epilepsy	Ph III	Ph III

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE


Oncology		USA	EU	News update in the quarter
Promacta/Revolade	Chronic ITP	Approved	Filed
	Hepatitis C / CLD	Ph III	Ph III
Avodart	Prostate cancer prevention	Ph III	Ph III	REDUCE data presented at AUA 27th April 2009.
	Duodart (fixed dose
	combination with	Filed
	tamsulosin)	Mar 2009	Filed
Rezonic/Zunrisa	CINV/PONV	Filed	Filed	Complete Response letter received on 23rd June 2009. US filing strategy under review.
Pazopanib	Renal cell cancer	Filed	Filed Mar 2009	Phase III data presented at ASCO 1st June 2009.
	Sarcoma	Ph III	Ph III
	Ovarian	Ph III	Ph III	Phase III started June 2009.
Tykerb	First-line metastatic	Filed Mar 2009	Filed Mar 2009
	Adjuvant breast cancer	Ph III	Ph III
	Head & neck cancer	Ph III	Ph III
	Gastric cancer	Ph III	Ph III
Elesclomol	Metastatic melanoma	Ph III	Ph III	Collaboration with Synta terminated 12th June 2009.
pazopanib + Tykerb	Inflammatory breast cancer	Ph III	Ph III
Respiratory & Immuno-inflammation
HORIZON	COPD	Ph II/III	Ph II/III	Phase III studies to start in October.
(‘444 & ‘698)


Vaccines		USA	EU	News update in the quarter
Cervarix	HPV prophylaxis	Filed	Approved	HPV008 and HPV010 study data presented at IPVC 8th May 2009 and 008 published in The Lancet 6th July 2009. Prequalification granted by WHO 8th July 2009.
Prepandrix	H5N1 pandemic influenza
	prophylaxis	Ph III	Approved
H1N1 flu	H1N1 pandemic influenza
	prophylaxis	Ph II/III	Ph II/III
MAGE-A3	NSCLC	Ph III	Ph III
	Melanoma	Ph III	Ph III
Menhibrix (HibMenCY-TT)	MenCY and Hib prophylaxis	Ph III	n/a	Positive pivotal Phase III results. Filing expected H2 2009.
MenACWY	MenACWY prophylaxis	Ph III	Ph III
New generation flu	Influenza prophylaxis	Ph III	Ph III
Simplirix	Genital herpes prophylaxis	Ph III	Ph III
Mosquirix	Malaria prophylaxis	n/a	n/a	Phase III study started in Africa 29th May 2009.

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

Turnover and key product movements impacting performance — H1 2009

Total group turnover fell 3% to £13.5 billion, with a 5% decline in total pharmaceutical turnover to £11.2 billion partially offset by growth from Consumer Healthcare, up 7% to £2.3 billion.

US pharmaceutical turnover fell 19% to £4.6 billion as a result of continued generic competition to several mature brands. European pharmaceutical sales grew 4% to £3.6 billion, largely driven by strong Relenza and vaccines sales, partly offset by competition to older products, particularly for HIV. Sales in Emerging Markets grew 16% to £1.4 billion and sales in Asia-Pacific/Japan rose 9% to £1.3 billion.

Seretide/Advair sales grew 4% in the first half of the year to £2.5 billion. US sales rose 1% to £1.3 billion and European sales rose 2% to £795 million. Sales of Seretide/Advair were strong in both Emerging Markets (up 22% to £138 million) and Japan where sales more than doubled to £83 million following launch of the indication for COPD earlier in the year.

Vaccine sales grew 16% to £1.4 billion. In the USA (up 2% to £315 million), strong performances from new products Rotarix and Boostrix (combined US sales of £69 million) were partly offset by the impact of increased competition in the DTPa segment. Outside the USA, vaccines sales were strong in all regions: Europe (up 13% to £606 million), Emerging Markets (up 31% to £276 million) and Asia-Pacific/Japan (up 23% to £99 million). Overall vaccine performance also included a strong contribution from Cervarix, sales of which more than doubled to £121 million in the first half.

Relenza sales were £282 million (2008: £32 million) in the first half reflecting several significant orders from governments across the world for pandemic stock-piling. Other strong pharmaceutical sales performances included Valtrex (up 6% to £723 million), Ventolin (up 23% to £228 million), Lovaza (up 36% to £210 million) and Veramyst (sales more than doubled to £78 million).

Sales of HIV products fell 9% to £801 million as a result of competition to older products, Combivir (down 17% to £214 million) and Trizivir (down 19% to £104 million). GSK’s newer medicines Epzicom/Kivexa grew 8% to £266 million.

Product sales significantly impacted by generic competition in the USA in the first half included: Lamictal (down 67% to £247 million), Imigran/Imitrex (down 67% to £132 million) and Requip (down 43% to £101 million).

Sales of Wellbutrin were £94 million, down 67%, reflecting both generic competition in the USA and the sale in May 2009 of the commercial rights to Wellbutrin XL in the USA to Biovail International Laboratories for $510 million (£340 million).

Total Consumer Healthcare sales grew 7% to £2.3 billion in the first half with growth across all regions: Europe up 3% to £940 million, Rest of World up 12% to £859 million and the USA up 5% to £512 million.

Oral healthcare sales rose 6% to £734 million with Sensodyne up 10% to £225 million and Aquafresh franchise sales flat at £249 million. Sales of dry mouth treatment Biotene, acquired in Q4 2008, were £12 million in the first half. Nutritionals sales were up 1% to £437 million, with continued strong growth from Horlicks (up 18% to £136 million) helping offset a decline in sales of Lucozade (down 7% to £186 million) which continued to be impacted by lower sales in the ‘impulse segment’ of the market. OTC product sales grew 9% to £1,140 million. The launch of anti-obesity treatment alli throughout Europe started during the second quarter, helping to more than double the product’s global sales to £114 million in the first half of the year. Other strong OTC performances included smoking cessation products (up 12% to £170 million) and the Panadol franchise (up 7% to £193 million).

Issued: Wednesday, 22nd July 2009, London, U.K.



Press Release

Operating profit and earnings per share commentary — H1 2009

Results before major restructuring

Operating profit before major restructuring for H1 2009 was £4,357 million, an 18% decline in CER terms.

Cost of sales increased to 24.2% of turnover (H1 2008: 23.1%), principally reflecting the impact of generic competition to higher margin products in the USA.

SG&A costs as a percentage of turnover increased by 2.1 percentage points to 32.2% compared with H1 2008. This reflected investment in growth markets, increased legal costs and exchange losses on inter-company transactions, partially offset by the benefits of the current restructuring programme. Excluding legal costs of £136 million and exchange losses of £106 million, SG&A costs were 30.4% of turnover (H1 2008: 29.8%). The company now expects SG&A costs, excluding legal charges to be around 29% of turnover in 2009 (2008: 27.7%).

R&D expenditure at 14.8% (H1 2008: 13.7%) of total turnover was impacted by £149 million of intangible asset write-offs. Excluding these write-offs, R&D expenditure would have been 13.7% of turnover.

In the half year, gains from asset disposals were £347 million (H1 2008: £223 million), costs for legal matters were £136 million (H1 2008: £36 million) and there was a charge of £5 million for the fair value movements on financial instruments (H1 2008: £32 million income).

Other operating income in the first half was £459 million including asset disposals of £347 million, primarily reflecting the disposal of Wellbutrin XL, and royalty income of £126 million (H1 2008: £130 million), partially offset by equity investment impairment and fair value movements on financial instruments. In addition, profit on disposal of interests in associates was £115 million as 5.7 million Quest shares were sold in the first quarter.

EPS before major restructuring of 57.3p decreased 16% in CER terms (an 8% increase in sterling terms) compared with H1 2008. The favourable currency impact of 24 percentage points reflected the weakness of Sterling against most major currencies compared with last year.

The current restructuring programme has achieved annualised cost savings of £900 million and remains on track to deliver cumulative annual savings of £1.7 billion by the end of 2011.

Total results after restructuring

Operating profit after restructuring for H1 2009 was £3,907 million, down 23% CER and flat in sterling terms compared with H1 2008. This included £450 million of restructuring charges (H1 2008: £272 million); £214 million was charged to cost of sales (H1 2008: £198 million), £136 million to SG&A (H1 2008: £56 million) and £100 million to R&D (H1 2008: £18 million). EPS after restructuring of 50.6p decreased 21% CER but increased 3% in sterling terms compared with H1 2008.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Income statement

Six months ended 30th June 2009


	Results												Results
	before major						Major						before major			Major
	restructuring						restructuring			Total			restructuring			restructuring			Total
	H1 2009						H1 2009			H1 2009			H1 2008			H1 2008			H1 2008
	£m			CER%			£m			£m			£m			£m			£m

TURNOVER		13,516			(3	)					13,516			11,560						11,560

Cost of sales		(3,265	)		9			(214	)		(3,479	)		(2,674	)		(198	)		(2,872	)

Gross profit		10,251			(7	)		(214	)		10,037			8,886			(198	)		8,688

Selling, general and administration		(4,356	)		1			(136	)		(4,492	)		(3,485	)		(56	)		(3,541	)
Research and development		(1,997	)		7			(100	)		(2,097	)		(1,582	)		(18	)		(1,600	)
Other operating income		459									459			355						355

OPERATING PROFIT		4,357			(18	)		(450	)		3,907			4,174			(272	)		3,902

Finance income		46									46			178						178
Finance costs		(368	)					(3	)		(371	)		(382	)		(2	)		(384	)
Profit on disposal of interest in associate		115									115			—						—
Share of after tax profits of associates and joint ventures		31									31			14						14


PROFIT BEFORE TAXATION		4,181			(18	)		(453	)		3,728			3,984			(274	)		3,710

Taxation		(1,212	)					114			(1,098	)		(1,140	)		69			(1,071	)
Tax rate %		*29.0*	%								*29.5*	%		28.6	%					28.9	%

PROFIT AFTER TAXATION FOR THE PERIOD		2,969			(19	)		(339	)		2,630			2,844			(205	)		2,639


Profit attributable to minority interests		64									64			46						46
Profit attributable to shareholders		2,905						(339	)		2,566			2,798			(205	)		2,593

		2,969						(339	)		2,630			2,844			(205	)		2,639


EARNINGS PER SHARE		57.3p			(16	)					50.6p			52.9p						49.0p


Diluted earnings per share		56.9p									50.3p			52.5p						48.7p

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Pharmaceuticals turnover

Six months ended 30th June 2009


	Total					USA					Europe					Rest of World
	£m		CER%			£m		CER%			£m		CER%			£m		CER%
Respiratory		3,469		4			1,669		2			1,096		—			704		13
Avamys/Veramyst		78		>100			38		12			25		>100			15		>100
Flixonase/Flonase		108		(23	)		18		(62	)		24		(24	)		66		11
Flixotide/Flovent		384		(3	)		196		3			91		(3	)		97		(11	)
Seretide/Advair		2,459		4			1,301		1			795		2			363		27
Serevent		121		(23	)		37		(15	)		60		(20	)		24		(38	)
Ventolin		228		23			70		>100			73		—			85		(4	)
Zyrtec		35		32			—		—			—		—			35		32

Anti-virals		2,068		11			984		6			576		21			508		10
HIV		801		(9	)		359		(8	)		325		(12	)		117		(6	)
Agenerase, Lexiva		91		(1	)		50		6			33		(10	)		8		—
Combivir		214		(17	)		97		(15	)		78		(21	)		39		(11	)
Epivir		65		(22	)		24		(18	)		26		(27	)		15		(19	)
Epzicom/Kivexa		266		8			108		3			121		5			37		41
Trizivir		104		(19	)		55		(18	)		44		(21	)		5		(17	)
Ziagen		52		(18	)		25		(10	)		18		(16	)		9		(36	)

Valtrex		723		6			548		12			81		(1	)		94		(16	)

Relenza		282		>100			30		>100			135		>100			117		>100
Zeffix		108		(9	)		9		(14	)		15		—			84		(10	)

Central Nervous System		948		(53	)		358		(76	)		289		(5	)		301		1
Imigran/Imitrex		132		(67	)		61		(81	)		48		(9	)		23		—
Lamictal		247		(67	)		131		(81	)		77		(3	)		39		(3	)
Requip		101		(43	)		14		(87	)		67		—			20		14
Requip XL		52		>100			13		—			39		>100			—		—
Seroxat/Paxil		264		(17	)		27		(51	)		55		(17	)		182		(6	)
Treximet		26		>100			26		>100			—		—			—		—
Wellbutrin, Wellbutrin XL		94		(67	)		74		(73	)		13		83			7		—

Cardiovascular and urogenital		1,131		8			704		10			286		2			141		14
Arixtra		120		34			66		43			45		26			9		20
Avodart		256		16			156		13			73		14			27		47
Coreg, Coreg CR		102		(16	)		101		(15	)		—		—			1		(100	)
Fraxiparine		113		(8	)		—		—			86		(13	)		27		9
Levitra		38		7			36		4			2		100			—		—
Lovaza		210		36			209		36			—		—			1		—
Vesicare		50		27			50		27			—		—			—		—
Volibris		6		—			—		—			6		—			—		—

Metabolic		597		(14	)		299		(17	)		139		(16	)		159		(6	)
Avandia products		395		(17	)		219		(19	)		89		(24	)		87		(3	)
Avandia		242		(21	)		145		(24	)		36		(24	)		61		(13	)
Avandamet		133		(11	)		60		(6	)		50		(25	)		23		27
Bonviva/Boniva		128		(3	)		79		(13	)		44		12			5		67

Anti-bacterials		807		1			93		(17	)		335		(5	)		379		12
Augmentin		332		1			27		(16	)		145		(5	)		160		11

Oncology and emesis		310		10			158		3			101		14			51		22
Hycamtin		86		6			50		6			30		13			6		(17	)
Promacta		5		—			5		—			—		—			—		—
Tyverb/Tykerb		75		54			28		—			35		100			12		>100
Zofran		62		(12	)		11		14			28		(25	)		23		—

Vaccines		1,381		16			315		2			606		13			460		31
Boostrix		65		71			32		71			18		25			15		>100
Cervarix		121		>100			—		—			102		>100			19		>100
Fluarix, FluLaval		20		>100			3		—			—		—			17		>100
Flu Pre-Pandemic		36		(21	)		25		—			10		(74	)		1		—
Hepatitis		344		(7	)		139		(12	)		133		(7	)		72		5
Infanrix, Pediarix		329		(13	)		77		(42	)		200		(1	)		52		4
Rotarix		128		71			37		—			25		21			66		28
Synflorix		12		—			—		—			10		—			2		—

Other		494		(14	)		7		80			158		(3	)		329		(20	)

		11,205		(5	)		4,587		(19	)		3,586		4			3,032		8

Pharmaceutical turnover includes co-promotion income.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Consumer Healthcare turnover

Six months ended 30th June 2009


	Total					USA					Europe					Rest of World
	£m		CER%			£m		CER%			£m		CER%			£m		CER%
Over-the-counter medicines		1,140		9			363		2			341		14			436		11
Alli		114		>100			54		60			59		—			1		(50	)
Breathe Right		47		9			24		(5	)		12		10			11		50
Cold sore franchise		43		(8	)		18		(13	)		19		(5	)		6		—
Nicotene replacement therapy		170		12			126		12			32		7			12		33
Panadol		193		7			—		—			40		—			153		9
Tums		55		—			49		—			—		—			6		—

Oral healthcare		734		6			149		12			374		3			211		10
Aquafresh franchise		249		—			48		(5	)		144		(2	)		57		7
Biotene		12		—			10		—			1		—			1		—
Denture care		164		7			39		—			60		4			65		15
Sensodyne franchise		225		10			49		23			97		5			79		12

Nutritional healthcare		437		1			—		—			225		(9	)		212		18
Horlicks		136		18			—		—			9		(18	)		127		23
Lucozade		186		(7	)		—		—			157		(10	)		29		14
Ribena		82		(4	)		—		—			58		(7	)		24		5

		2,311		7			512		5			940		3			859		12

Statement of comprehensive income


	H1 2009			H1 2008
	£m			£m
Profit for the period		2,630			2,639

Exchange movements on overseas net assets		(599	)		189
Tax on exchange movements		—			(7	)
Fair value movements on available-for-sale investments		(9	)		(119	)
Deferred tax on fair value movements on available-for-sale investments		(8	)		13
Actuarial losses on defined benefit plans		(920	)		(507	)
Deferred tax on actuarial movements in defined benefit plans		249			151
Fair value movements on cash flow hedges		(6	)		(4	)
Deferred tax on fair value movements on cash flow hedges		2			2

Other comprehensive income for the period		(1,291	)		(282	)


Total comprehensive income for the period		1,339			2,357


Total comprehensive income for the period attributable to:
Shareholders		1,321			2,330
Minority interests		18			27

		1,339			2,357

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Balance sheet


	30th June			30th June			31st December
	2009			2008			2008
	£m			£m			£m
ASSETS
Non-current assets
Property, plant and equipment		8,875			8,092			9,678
Goodwill		2,015			1,618			2,101
Other intangible assets		5,787			4,658			5,869
Investments in associates and joint ventures		448			346			552
Other investments		463			382			478
Deferred tax assets		2,570			2,210			2,760
Derivative financial instruments		61			42			107
Other non-current assets		493			495			579

Total non-current assets		20,712			17,843			22,124

Current assets
Inventories		3,910			3,525			4,056
Current tax recoverable		55			49			76
Trade and other receivables		5,363			5,392			6,265
Derivative financial instruments		283			329			856
Liquid investments		290			393			391
Cash and cash equivalents		5,346			4,988			5,623
Assets held for sale		2			3			2

Total current assets		15,249			14,679			17,269

TOTAL ASSETS		35,961			32,522			39,393

LIABILITIES
Current liabilities
Short-term borrowings		(1,185	)		(1,157	)		(956	)
Trade and other payables		(5,161	)		(5,312	)		(6,075	)
Derivative financial instruments		(400	)		(137	)		(752	)
Current tax payable		(875	)		(841	)		(780	)
Short-term provisions		(1,413	)		(819	)		(1,454	)

Total current liabilities		(9,034	)		(8,266	)		(10,017	)

Non-current liabilities
Long-term borrowings		(13,067	)		(12,566	)		(15,231	)
Deferred tax liabilities		(497	)		(762	)		(714	)
Pensions and other post-employment benefits		(3,664	)		(1,756	)		(3,039	)
Other provisions		(1,276	)		(1,100	)		(1,645	)
Derivative financial instruments		—			(2	)		(2	)
Other non-current liabilities		(392	)		(363	)		(427	)

Total non-current liabilities		(18,896	)		(16,549	)		(21,058	)

TOTAL LIABILITIES		(27,930	)		(24,815	)		(31,075	)

NET ASSETS		8,031			7,707			8,318


EQUITY
Share capital		1,416			1,440			1,415
Share premium account		1,341			1,302			1,326
Retained earnings		4,257			4,255			4,622
Other reserves		703			441			568

Shareholders’ equity		7,717			7,438			7,931

Minority interests		314			269			387

TOTAL EQUITY		8,031			7,707			8,318

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Cash flow statement

Six months ended 30th June 2009


	H1 2009			H1 2008			2008
	£m			£m			£m
Profit after tax		2,630			2,639			4,712
Tax on profits		1,098			1,071			1,947
Share of after tax profits of associates and joint ventures		(31	)		(14	)		(48	)
Profit on disposal of interest in associates		(115	)		—			—
Net finance expense		325			206			530
Depreciation and other non-cash items		767			598			1,437
Decrease/(increase) in working capital		228			(13	)		69
(Decrease)/increase in other net liabilities		(488	)		(274	)		408

Cash generated from operations		4,414			4,213			9,055

Taxation paid		(915	)		(1,039	)		(1,850	)

Net cash inflow from operating activities		3,499			3,174			7,205

Cash flow from investing activities
Purchase of property, plant and equipment		(655	)		(599	)		(1,437	)
Proceeds from sale of property, plant and equipment		12			8			20
Purchase of intangible assets		(195	)		(182	)		(632	)
Proceeds from sale of intangible assets		353			—			171
Purchase of equity investments		(44	)		(17	)		(87	)
Proceeds from sale of equity investments		2			16			42
Purchase of businesses, net of cash acquired		(673	)		(324	)		(454	)
Investment in associates and joint ventures		(7	)		(7	)		(9	)
Decrease in liquid investments		58			779			905
Proceeds from disposal of interest in associates		178			—			—
Interest received		59			179			320
Dividends from associates and joint ventures		8			4			12

Net cash outflow from investing activities		(904	)		(143	)		(1,149	)

Cash flow from financing activities
Proceeds from own shares for employee share options		3			6			9
Shares acquired by ESOP Trusts		(48	)		(3	)		(19	)
Issue of share capital		16			37			62
Purchase of own shares for cancellation		—			(2,376	)		(3,706	)
Increase in long-term loans		—			5,215			5,523
Net repayment of short-term loans		(471	)		(2,382	)		(3,059	)
Net repayment of obligations under finance leases		(23	)		(22	)		(48	)
Interest paid		(385	)		(283	)		(730	)
Dividends paid to shareholders		(1,586	)		(1,567	)		(2,929	)
Dividends paid to minority interests		(91	)		(65	)		(79	)
Other financing items		(208	)		15			68

Net cash outflow from financing activities		(2,793	)		(1,425	)		(4,908	)


(Decrease)/increase in cash and bank overdrafts in the period		(198	)		1,606			1,148

Exchange adjustments		(240	)		12			1,103
Cash and bank overdrafts at beginning of period		5,472			3,221			3,221

Cash and bank overdrafts at end of period		5,034			4,839			5,472


Cash and bank overdrafts at end of period comprise:
Cash and cash equivalents		5,346			4,988			5,623
Overdrafts		(312	)		(149	)		(151	)

		5,034			4,839			5,472

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Statement of changes in equity


	Share			Share		Retained			Other			Minority			Total
	capital			premium		earnings			reserves			interests			equity
	£m			£m		£m			£m			£m			£m
At 1st January 2009		1,415			1,326		4,622			568			387			8,318

Total comprehensive income for the period							1,341			(20	)		18			1,339
Distributions to minority shareholders													(81	)		(81	)
Changes in minority shareholders													(10	)		(10	)
Dividends to shareholders							(1,589	)								(1,589	)
Shares issued		1			15											16
Consideration received for shares transferred by ESOP Trusts										3						3
Shares acquired by ESOP Trusts										(48	)					(48	)
Write-down on shares held by ESOP Trusts							(200	)		200						—
Share-based incentive plans							83									83

At 30th June 2009		1,416			1,341		4,257			703			314			8,031


At 1st January 2008		1,503			1,266		6,475			359			307			9,910

Total comprehensive income for the period							2,433			(103	)		27			2,357
Distributions to minority shareholders													(65	)		(65	)
Dividends to shareholders							(1,567	)								(1,567	)
Shares issued		1			36											37
Shares purchased for cancellation		(64	)				(3,079	)		64						(3,079	)
Consideration received for shares transferred by ESOP Trusts										6						6
Shares acquired by ESOP Trusts										(3	)					(3	)
Write-down on shares held by ESOP Trusts							(118	)		118						—
Share-based incentive plans							113									113
Tax on share-based incentive plans							(2	)								(2	)

At 30th June 2008		1,440			1,302		4,255			441			269			7,707

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Segmental information

GSK has implemented IFRS 8 ‘Operating segments’ with effect from 1st January 2009 and this has resulted in a change to the segmental information reported by GSK. Comparative information has been presented on a consistent basis.

GSK’s operating segments are being reported based on the financial information provided to the Chief Executive Officer and the responsibilities of the Corporate Executive Team (CET). Individual members of the CET are responsible for geographic regions of the Pharmaceuticals business and for the Consumer Healthcare business as a whole, respectively.

R&D investment is essential for the sustainability of the pharmaceutical businesses. However, for segment reporting, the US, Europe, Emerging Markets and Asia Pacific/Japan regional pharmaceutical operating profits exclude allocations of globally funded R&D as well as central costs, principally corporate functions and unallocated manufacturing costs. GSK’s management reporting process allocates intra-Group profit on a product sale to the market in which that sale is recorded, and the profit analyses below have been presented on that basis.

The Other trading pharmaceuticals segment includes Canada, Puerto Rico, central vaccine tender sales and contract manufacturing sales.

The Pharmaceuticals R&D segment is the responsibility of the Chairman, Research & Development and is therefore being reported as a separate segment.

Unallocated pharmaceuticals costs include costs such as vaccines R&D and central manufacturing costs not attributed to other segments.

Corporate and other unallocated costs and disposal profits include corporate functions, costs for legal matters, fair value movements on financial instruments and investments and unallocated profits on asset disposals.

Turnover by segment


			Q2 2008
	Q2 2009		(restated)
	£m		£m		CER%
US pharmaceuticals		2,304		2,129		(15	)
Europe pharmaceuticals		1,746		1,598		1
Emerging Markets pharmaceuticals		720		563		14
Asia Pacific/Japan pharmaceuticals		609		464		6
Other trading pharmaceuticals		203		169		6


Pharmaceuticals turnover		5,582		4,923		(4	)
Consumer Healthcare turnover		1,165		951		9

		6,747		5,874		(2	)

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Operating profit by segment

Operating profit growth for the quarter in some segments has been impacted by asset disposal profits, principally the disposal of Wellbutrin XL in Q2 2009 and the disposal of four products to Aspen in Q2 2008. Accordingly the table below also shows operating profit change excluding asset sale profits.


										Excluding
				Q2 2008						asset sale
	Q2 2009			(restated)						profits
	£m			£m			CER%			CER%
US pharmaceuticals		1,901			1,404			4			(14	)
Europe pharmaceuticals		993			968			(6	)		1
Emerging Markets pharmaceuticals		231			253			(14	)		7
Asia Pacific/Japan pharmaceuticals		319			296			(17	)		(4	)
Other trading pharmaceuticals		112			89			11
Pharmaceuticals R&D		(775	)		(673	)		1
Other unallocated pharmaceuticals costs		(386	)		(181	)		34


Pharmaceuticals operating profit		2,395			2,156			(7	)		(12	)
Consumer Healthcare operating profit		210			176			6			6


Segment operating profit		2,605			2,332			(6	)
Corporate and other unallocated costs and disposal profits		(224	)		(206	)


Operating profit before major restructuring		2,381			2,126			(6	)
Major restructuring		(186	)		(187	)


Total operating profit		2,195			1,939

Finance income		18			96
Finance costs		(168	)		(214	)
Share of after tax profits of associates and joint ventures		17			15


Profit before taxation		2,062			1,836

US pharmaceuticals turnover declined 15% which was only partly mitigated by significant reductions in operating costs. Consequently operating profit excluding asset sale profits declined by 14%. Operating profit grew 4% overall reflecting the disposal of rights to Wellbutrin XL in the quarter.

Europe, Emerging Markets and Asia Pacific pharmaceutical operating profits were impacted by an adverse comparison to last year where the 2008 profits included the disposal of products to Aspen.

Excluding asset sale profits operating profit grew by 1% in Europe (in line with turnover growth) and by 7% in Emerging Markets on a turnover increase of 14% reflecting increased SG&A investment to grow the business.

Japan and Asia Pacific profit declined 4% after excluding asset sale profits reflecting increased SG&A investment to support new products, and was also adversely impacted by a one-off pension gain recorded last year.

Pharmaceuticals R&D costs were broadly in line with Q2 2008.

Other unallocated pharmaceuticals costs increased in 2009 principally due to higher exchange losses of £95 million (Q2 2008: £3 million) and higher centrally held manufacturing costs.

Consumer Healthcare operating profit increased 6% on a turnover increase of 9% reflecting increased SG&A investment to grow the business.

Corporate and other unallocated costs reflected higher legal costs, partly offset by lower charges from fair value movements on financial instruments and other cost savings.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Turnover by segment


			H1 2008
	H1 2009		(restated)
	£m		£m		CER%
US pharmaceuticals		4,587		4,267		(19	)
Europe pharmaceuticals		3,586		3,094		4
Emerging Markets pharmaceuticals		1,381		1,032		16
Asia Pacific/Japan pharmaceuticals		1,248		884		9
Other trading pharmaceuticals		403		413		(15	)


Pharmaceuticals turnover		11,205		9,690		(5	)
Consumer Healthcare turnover		2,311		1,870		7

		13,516		11,560		(3	)

Operating profit by segment

Operating profit growth for the half year in some segments has been impacted by asset disposal profits, principally the disposal of Wellbutrin XL in H1 2009 and the disposal of four products to Aspen in H1 2008. Accordingly the table below also shows operating profit change excluding asset sale profits.


										Excluding
				H1 2008						asset sale
	H1 2009			(restated)						profits
	£m			£m			CER%			CER%
US pharmaceuticals		3,395			2,862			(12	)		(20	)
Europe pharmaceuticals		2,050			1,799			1			5
Emerging Markets pharmaceuticals		459			416			(5	)		8
Asia Pacific/Japan pharmaceuticals		665			508			(5	)		3
Other trading pharmaceuticals		225			250			(22	)
Pharmaceuticals R&D		(1,676	)		(1,309	)		9
Other unallocated pharmaceuticals costs		(678	)		(365	)		38


Pharmaceuticals operating profit		4,440			4,161			(16	)		(25	)
Consumer Healthcare operating profit		399			335			3			3


Segment operating profit		4,839			4,496			(15	)
Corporate and other unallocated costs and disposal profits		(482	)		(322	)


Operating profit before major restructuring		4,357			4,174			(18	)
Major restructuring		(450	)		(272	)


Total operating profit		3,907			3,902

Finance income		46			178
Finance costs		(371	)		(384	)
Profit on disposal of interest in associate		115			—
Share of after tax profits of associates and joint ventures		31			14


Profit before taxation		3,728			3,710

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

US pharmaceuticals turnover declined 19% which was only partly mitigated by significant reductions in operating costs. Consequently operating profit excluding asset sale profits declined by 20%. Operating profit decreased by 12% overall reflecting the benefit of higher asset sale profits this year.

Europe, Emerging Markets and Asia Pacific pharmaceutical operating profits were impacted by an adverse comparison to last year where the 2008 profits included the disposal of products to Aspen.

Excluding asset sale profits operating profit grew by 5% in Europe (slightly above turnover growth) and by 8% in Emerging Markets on a turnover increase of 16% reflecting increased SG&A investment to grow the business.

Japan and Asia Pacific profit increased 3% after excluding asset sale profits and was also adversely impacted by a one-off pension gain recorded last year.

Pharmaceuticals R&D costs increased primarily due to higher intangible asset write-offs. Costs excluding intangible asset write-offs of £149 million were flat in CER terms.

Other unallocated pharmaceuticals costs increased in 2009 principally due to higher exchange losses of £106 million (H1 2008: £4 million) and higher centrally held manufacturing costs.

Consumer Healthcare turnover increased 7% but operating profits only increased by 3% reflecting increased SG&A investment to grow the business.

Corporate and other unallocated costs increased due to higher legal costs and pension charges in H1 2009.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

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 2008.

At 30th June 2009, the Group’s aggregate provision for legal and other disputes (not including tax matters described under ‘Taxation’ on page 28) was £1.7 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 2008 are as follows:

Updates on matters previously reported in the Q1 Results Announcement

In the Wellbutrin XL action filed in the US District Court for the Eastern District of Pennsylvania against Biovail and GSK alleging unlawful monopolisation and other antitrust violations related to the enforcement of Biovail’s Wellbutrin XL patents and the filing, by Biovail, of citizen petitions, GSK’s motion to dismiss the complaint of the purported class of direct purchasers was denied. Accordingly, the case will proceed to discovery. In the same matter, the purported class of indirect purchasers has filed an amended complaint, which has resulted in a decision by GSK to withdraw its pending motion to dismiss the indirect purchaser’s original complaint.

With respect to the purported direct and indirect purchaser class actions relating to Flonase, the Group’s motion to dismiss the complaints was granted without prejudice on 15th April 2009 by the US District Court for the Eastern District of Pennsylvania. On 17th April 2009, Roxane Laboratories, Inc. filed suit against the Group in the US District Court for the Eastern District of Pennsylvania, alleging anticompetitive conduct by the Group in filing certain citizen petitions that are alleged to have delayed Roxane’s entry into the market for Flonase. The Group is currently collecting information about the allegations included in this complaint.

Matters with significant developments since the date of the Q1 Results Announcement

GSK’s Irish patent to the Seretide combination was found invalid for obviousness in a decision of the Irish Commercial Court of 26th June 2009 following a revocation action by Ivax. GSK intends to appeal. The decision relates solely to the Irish combination patent for Seretide and is not binding in any other jurisdiction.

A hearing date of 23rd February 2010 has been set in the Federal Patent Court in Munich, Germany for the three patent revocation actions brought against GSK’s German patent to the Seretide combination by Mylan, Hexal and Neolab.

Sandoz and Neolab have brought a revocation action on 14th July 2009 against the Dutch Seretide combination patents. A hearing date of 19th February 2010 has been set by the District Court of the Hague. The Company is in process of evaluating the merits of this claim.

With respect to the Group’s action against Mutual Pharmaceuticals relating to Coreg CR, the Group’s motion to dismiss was granted in April 2009 by the US District Court for the Eastern District of Pennsylvania. Mutual cannot obtain final approval to market its generic product until 20th April 2010 based upon data exclusivity granted by the FDA for the product.

In March 2009, the Group received para IV certifications from ANDA applicants, Teva Pharmaceuticals USA, Par Pharmaceutical, Inc., and Apotex Inc., alleging that two patents covering Lovaza are invalid, unenforceable, or not infringed. The patents expire in 2013 and 2017. The Group is an exclusive licensee under these patents. Pronova BioPharma Norge A/S is the owner of the patents. Pronova filed suit under these patents in April 2009 in the US District Court for the District of Delaware. Based upon this suit, a stay against FDA approval will be in effect until the earlier of an adverse decision in the case or May 2012

In May 2009, Bayer Healthcare notified GSK that it had received a para IV certification for Levitra from Teva Pharmaceuticals, Inc. GSK is Bayer’s co-promotion partner for Levitra and is not a defendant in this proceeding. The certification alleges that the patent covering the active ingredient in Levitra, which expires in 2018, is invalid, unenforceable or not infringed. In July 2009, Bayer brought suit against Teva in the US District Court for the District of Delaware. A stay against FDA approval will be in effect until the earlier of November 2011, or a decision adverse to Bayer in the patent infringement litigation.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

In July 2009, Apotex, Inc. filed a suit against the Group in the US District Court for the Middle District of North Carolina seeking a declaration that its generic drug valacyclovir did not infringe two patents listed in the Orange Book for Valtrex, or alternatively that the patents were invalid or unenforceable. Apotex did not challenge the basic composition of matter patent for Valtrex, which expires in December 2009. Apotex had filed a para IV certification as to these patents in 2008, and GSK did not sue Apotex at that time. GSK is evaluating the complaint.

A trial date of 15th April 2010 has been set by the court for the US District Court for the Eastern District of Pennsylvania for the remaining patent infringement case brought by the Group against Apotex with respect to the Group’s patent on paroxetine hydrochloride hemihydrate and the antitrust counterclaim in turn asserted by Apotex against the Group.

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

Taxation

Transfer pricing and other issues are as previously described in the ‘Taxation’ note to the Financial Statements included in the Annual Report 2008. There have been no material changes to tax matters since the publication of the Annual Report.

GSK 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.

Additional information


	Paid/	Pence per
Dividends	payable	share		£m
2009
First interim	9th July 2009		14		700
Second interim	8th October 2009		14		710

2008
First interim	10th July 2008		13		683
Second interim	9th October 2008		13		679
Third interim	8th January 2009		14		730
Fourth interim	9th April 2009		17		859

			57		2,951

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Weighted average number of shares


	Q2 2009		Q2 2008
	millions		millions
Weighted average number of shares — basic		5,069		5,234
Dilutive effect of share options and share awards		38		38


Weighted average number of shares — diluted		5,107		5,272

H1 2009

H1 2008

2008

millions

millions

Weighted average number of shares — basic

5,067

5,294

5,195

Dilutive effect of share options and share awards

Weighted average number of shares — diluted

5,106

5,325

5,226

Net assets

The book value of net assets decreased by £287 million from £8,318 million at 31st December 2008 to £8,031 million at 30th June 2009. This reflects the dividend payment and an increase in the pension deficit partially offset by a decrease in net debt arising from exchange movements. The increase in the pension deficit arose predominantly from an increase in the estimated long-term UK inflation rate, a reduction in asset values and by a decrease in the rate used to discount UK pension liabilities from 6.20% to 6.0%. At 30th June 2009, the net deficit on the Group’s pension plans was £2,517 million compared with £1,697 million at 31st December 2008.

The carrying value of investments in associates and joint ventures at 30th June 2009 was £448 million, with a market value of £1,134 million.

At 30th June 2009, the ESOP Trusts held 119.7 million GSK shares against the future exercise of share options and share awards. The carrying value of £1,289 million has been deducted from other reserves. The market value of these shares was £1,279 million.

GSK did not purchase any shares for cancellation in the period. At 30th June, the company held 474.2 million Treasury shares at a cost of £6,286 million, which has been deducted from retained earnings.

Capital expenditure

In the period to 30th June 2009 there were additions to property, plant and equipment of £639 million (H1 2008: £567 million) and additions to intangible assets of £147 million (H1 2008: £182 million).

In the period to 30th June 2009 there were disposals of property, plant and equipment with a book value of £21 million (H1 2008: £20 million) and disposals of intangible assets with a book value of £nil (H1 2008: £nil).

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Reconciliation of cash flow to movements in net debt


	H1 2009			H1 2008			2008
	£m			£m			£m
Net debt at beginning of the period		(10,173	)		(6,039	)		(6,039	)

(Decrease)/increase in cash and bank overdrafts		(198	)		1,606			1,148
Cash inflow from liquid investments		(58	)		(779	)		(905	)
Net increase in long-term loans		—			(5,215	)		(5,523	)
Net repayment of short-term loans		471			2,382			3,059
Net repayment of obligations under finance leases		23			22			48
Exchange adjustments		1,337			(301	)		(1,918	)
Other non-cash movements		(18	)		(18	)		(43	)

Decrease/(increase) in net debt		1,557			(2,303	)		(4,134	)

Net debt at end of the period		(8,616	)		(8,342	)		(10,173	)

Business acquisitions and disposals

On 7th January 2009, the Group acquired all of the share capital of Genelabs Technologies Inc, a California biotechnology company with a strong and focused portfolio in hepatitis C vaccines. The purchase price of £41 million included £12 million of cash and cash equivalents, with the remainder represented by preliminary net asset valuations of £29 million.

On 30th January 2009, the Group acquired all of the share capital of Bristol Myers Squibb Pakistan (Private) Limited and certain associated trademarks for a cash consideration of £23 million. As a result, the Group has acquired a portfolio of over 30 well-established pharmaceutical brands, many of which occupy leading market positions in key therapeutic disease areas in Pakistan. The purchase price of £23 million was represented by provisional valuations of intangible assets of £8 million, goodwill of £10 million and other net assets of £5 million.

On 31st March 2009, the Group acquired from UCB S.A. its marketed product portfolio across certain territories in Africa, the Middle East, Asia Pacific and Latin America which includes several leading pharmaceutical brands in a number of disease areas. The purchase price of £477 million included £5 million of net cash, £445 million of intangible assets, £87 million of goodwill and £60 million of other liabilities. Since the end of Q1 2009, we have completed further country acquisitions which formed part of the original transaction. These are provisional valuations and may change in the future.

On 21st April 2009, the Group acquired all of the share capital of AZ Tika, a wholly owned subsidiary of Astra Zeneca plc for a cash consideration of £146 million. As a result, the Group has acquired a number of leading over-the-counter products, predominantly sold in Sweden, including Alvedon, the country’s leading analgesic treatment. The purchase price of £146 million was represented by provisional valuations of intangible assets of £109 million, goodwill of £50 million and other net liabilities of £13 million.

During the second quarter, the Group announced an agreement to acquire Stiefel Laboratories Inc., the world’s largest private dermatological company for consideration of up to $3.6 billion. The transaction is expected to be completed during Q3 2009. In addition, the Group also announced an agreement to create a new specialist HIV business with Pfizer focusing on research, development and commercialisation of HIV medicines. The Group will initially hold an 85% equity interest in the new company and Pfizer will hold 15%. The transaction is expected to be completed during Q4 2009.

Further agreements were signed to extend our partnership with Aspen Pharmacare Holdings Limited and to commit to establish a joint venture in China with Shenzhen Neptunus, to develop influenza vaccines.

Subsequent to 30th June, the Group announced that it had acquired the branded generics business of BMS in various Middle East and North African countries.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Related party transactions

The Group’s significant related parties are its joint ventures and associates as disclosed in the company’s Annual Report 2008. In March 2009, 5,749,157 shares in the Group’s associate, Quest Diagnostics Inc. were sold for a cash consideration of £178 million, the majority of the shares being sold direct to Quest Diagnostics Inc. with the remainder being sold in the market.

Apart from the above, there were no material transactions with any of the Group’s joint ventures and associates in the period. There were no material transactions with directors.

Contingent liabilities

There were contingent liabilities at 30th June 2009 in respect of guarantees and indemnities entered into as part of the ordinary course of the Group’s business. No material losses are expected to arise from such contingent liabilities.

Exchange rates

The Group operates in many countries and earns revenues and incurs costs in many currencies. The results of the Group, as reported in Sterling, are affected by movements in exchange rates between Sterling and other currencies. Average exchange rates, as modified by specific transaction rates for large transactions, prevailing during the period are used to translate the results and cash flows of overseas subsidiaries, associates and joint ventures into Sterling. Period-end rates are used to translate the net assets of those entities. The currencies which most influenced these translations and the relevant exchange rates were:


									31st December
	Q2 2009		Q2 2008		H1 2009		H1 2008		2008
Average rates:
£/US$		1.56		1.99		1.50		1.99		1.85
£/Euro		1.13		1.28		1.11		1.30		1.26
£/Yen		150		208		143		209		192

Period end rates:
£/US$		1.65		1.99		1.65		1.99		1.44
£/Euro		1.17		1.26		1.17		1.26		1.04
£/Yen		159		211		159		211		131

During Q2 and H1, average Sterling exchange rates were weaker against the US Dollar, the Euro and the Yen compared with the same period in 2008. Period end Sterling exchange rates were also weaker against all three currencies and the Yen, compared with those at 30th June 2008.

Principal risks and uncertainties

The principal risks and uncertainties affecting the Group are those described under the headings below in the ‘Risk Factors’ section of the ‘Business Review’ of the Annual Report 2008.

Risk that R&D will not deliver commercially successful new products
Risk of unplanned loss of patents
Risk of substantial adverse outcome of litigation and government investigations
Risks of competition, price controls and limitations on sales
Regulatory controls
Risk of interruption of product supply
Risk from concentration of sales to wholesalers
Reliance on information technology
Global political and economic conditions
Taxation
Disruption from pandemic influenza
Environmental liabilities
Accounting standards
Human resources
Failure of third party providers

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Accounting presentation and policies

This unaudited Results Announcement containing condensed financial information for the three and six months ended 30th June 2009 is prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority, IAS 34 ‘Interim Financial Reporting’ and the accounting policies set out in the Annual Report 2008, except that GSK has implemented IAS 1 (Revised) ‘Presentation of financial statements’, IAS 23 (Revised) ‘Borrowing costs’ and IFRS 8 ‘Operating segments’ with effect from 1st January 2009. The implementation of IFRS 8 has resulted in a change to the segmental information reported by GSK, as described in ‘Segmental information’ on page 23. Comparative information has been presented on a consistent basis.

This Results Announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The balance sheet at 31st December 2008 has been derived from the full Group accounts published in the Annual Report 2008, 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.

Directors’ responsibility statement

The Board of Directors approved this document on 22nd July 2009. The directors confirm that to the best of their knowledge this unaudited condensed financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that the Interim Management Report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.

The directors of GlaxoSmithKline plc are as listed in the company’s Annual Report 2008, with the exception that Sir Ian Prosser and Dr Ronaldo Schmitz retired from, and James Murdoch was appointed to the Board of Directors on 20th May 2009.

By order of the Board


Andrew Witty		Julian Heslop
Chief Executive Officer		Chief Financial Officer
22nd July 2009

Investor information

Financial calendar

The company will announce third quarter 2009 results in October 2009.

Internet

This Announcement and other information about GSK are available on the company’s website at: http://www.gsk.com.

Contact information

Copies of this interim management report may be obtained from company’s registrars on 0871 384 2991 or by writing to, Equiniti Limited, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA.

Issued: Wednesday, 22nd July 2009, London, U.K.



PRESS RELEASE

Independent review report to GlaxoSmithKline plc

Introduction

We have been engaged by the company to review the condensed financial information in the Interim Management Report for the six months ended 30th June 2009, which comprises the income statement for the three and six months ended 30th June 2009, balance sheet, statement of comprehensive income, statement of changes in equity, cash flow statement and related notes (excluding the pharmaceuticals and vaccines pipeline table) for the six months ended 30th June 2009. We have read the other information contained in the Interim Management Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed financial information.

Directors’ responsibilities

The Interim Management Report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Management Report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority.

The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed financial information included in the Interim Management Report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”, as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed financial information in the Interim Management Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed financial information in the Interim Management Report for the three and six months ended 30th June 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority.

PricewaterhouseCoopers LLP
Chartered Accountants
22nd July 2009
London

Notes:


(a)		The maintenance and integrity of the GlaxoSmithKline plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the condensed financial information since it was initially presented on the website.

(b)		Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Issued: Wednesday, 22nd July 2009, London, U.K.

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