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

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-F þ     Form 40-F o

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.

Yes o     No þ

 

 

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.

The full results are presented under ‘Income Statement’ on pages 10 and 17.
*		Underlying sales growth excludes pandemic products, Avandia and Valtrex, see page 9.
**		For explanations of the measures ‘results before major restructuring’ and ‘CER growth’, see page 9.

		1

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

We have substantially re-engineered GSK’s business model over the last two and a half years, through major restructuring and a rigorous returns-based approach to capital allocation.

We are also having to deal with long-standing legal cases. There is no doubt that the scale of legal provisioning that has been required is significant. However, I continue to believe that it is in the company’s best interests to resolve this inherent unpredictability and reduce our overall litigation exposure.

The changes we have made are delivering diversified underlying sales growth, increasing pipeline potential and improved cash generation.

These elements are at the core of our strategy to address the market challenges we identified and to deliver sustained financial performance. They also speak to what we have created — a balanced, synergistic business with a lower risk profile and the option for significant potential upside from the pipeline.

All of this is being done with the direct aim of enhancing returns to shareholders through continued dividend growth and other measures such as the new long-term share buy-back programme we initiated today.

Continuing focus on ROI and capital allocation

Reinvestment of costs saved through our restructuring programme has enabled us to diversify and strengthen GSK’s sales base. £1.7 billion of cost has been extracted from our developed country sales & marketing, support functions, R&D and manufacturing infrastructure since 2008. We are on track to deliver £2.2 billion of savings by 2012.

We have taken cost out from lower returning activities and reinvested it in areas such as Emerging Markets, Vaccines and Consumer Healthcare. The benefit of this reinvestment is evident. 2010 reported sales for these businesses were up 22%, 15% and 5% respectively. Excluding sales of pandemic products, Avandia and Valtrex underlying sales in Emerging Markets were up 20%, and Vaccines sales were up 10%.

Bolt-on acquisitions are also contributing meaningfully to sales in these areas. In 2010, we spent £354 million on acquisitions. This compares with £2.8 billion in 2009 and reflects our disciplined approach to investment in what is a highly competitive market. We continue to evaluate returns from these investments. Assessment of earlier acquisitions such as Stiefel and the emerging market portfolios of UCB and BMS all indicate that they are on track to meet, or exceed, the targets we set at acquisition.

All this is fundamentally reducing GSK’s dependency on sales of products in ‘white pills/western markets.’ Sales generated from these markets and products have decreased from 40% in 2007, to 25% in 2010. Over time, this should help to reduce the adverse impact of patent expirations on the Group.

Issued: Thursday, 3rd February 2011, London, U.K.		2

PRESS RELEASE

Reinvestment and cost reduction has also helped to mitigate the impact of what has been a significant ‘patent cliff’ for GSK with more than £4 billion of patented sales being lost to generic competition over the last 4 years. This is in addition to the £1 billion of Avandia sales decline over the same period.

Our drive for change, and to improve returns on investment through restructuring and effective capital allocation, will not stop.

Today, we are announcing our intention to accelerate growth and focus our Consumer Healthcare business around a portfolio of ‘priority’ brands and the emerging markets. These two dimensions represent around 90% of our current sales base. We intend to divest the remaining 10% of sales (£500 million) which consist of European and American non-core OTC brands. Our aim is to divest these products by late 2011, subject to interest and realising appropriate value for shareholders. We expect to use the proceeds to fund increased returns to shareholders.

Divestments of non-core assets to create value for shareholders will continue. This week, we completed the divestment of our total shareholding in Quest Diagnostics for net proceeds after tax of $1.1 billion (£0.7 billion) and the sale of our remaining interests in Zovirax cream and ointment formulations in North America to Valeant Pharmaceuticals for $300 million (£190 million).

Delivering diversified underlying sales growth

In 2010, reported sales were down 1%; however, underlying sales growth (sales excluding pandemic products, Avandia and Valtrex) was 4.5%. This growth was achieved despite the ongoing impacts of US healthcare reform and EU government austerity measures which reduced sales by approximately £380 million.

In 2011, we expect underlying sales momentum to continue and translate into sustainable reported growth in 2012. This expectation includes our assessment for further pricing reductions in the USA and Europe which is expected to amount to an incremental £325 million in 2011.

We recognise that tracking GSK’s performance in 2011 will be difficult. The ‘washout’ of pandemic products, Avandia and Valtrex, which altogether represented sales of more than £2 billion in 2010, will clearly impact our reported sales and margin for the year and especially during the first half.

Given the minimal sales and marketing support for these products, we expect this to reduce our operating margin (excluding legal charges and other operating income) during 2011 by around 1 percentage point. This reduction also takes into account the industry levy associated with US healthcare reform. We expect the Group margin (on the same basis) to improve from 2012 onwards reflecting delivery of our underlying sales momentum and cost savings realised through our restructuring programme.

Offsetting this impact to SG&A expenditure, would require us to reduce investment in growth areas of the business, and we do not believe this is in the long-term interests of the business.

Increasing pipeline potential

GSK has a peer-leading portfolio of around 30 opportunities in phase III and registration.

This portfolio is diverse with 5 biopharmaceuticals and 5 vaccines in addition to NCEs, all targeting multiple disease areas. The portfolio is also innovative with more than 20 assets not currently on the market for any indication.

Importantly, we are delivering sustained asset progression with 10 NCEs and new vaccines entering phase III since the start of 2010. 7 assets are filed with regulators or pending filing. By the end of 2012, we expect Phase III data on around 15 additional assets, including treatments for type 1 and 2 diabetes, rare diseases and multiple cancer types.

Issued: Thursday, 3rd February 2011, London, U.K.		3

PRESS RELEASE

Looking at asset progression, one particular area I want to mention here is our respiratory pipeline. Today, we are announcing that a new LAMA/LABA combination product (‘719/’444), will join Relovair in Phase III development. We have also announced the initiation of an extensive clinical outcomes study to assess the potential for Relovair to improve survival in patients with COPD. With more than 50 years of experience in this field, respiratory remains a very important part of GSK’s research.

Improving returns on investment is key to how we are running our R&D operations. Our previously announced target is to deliver an aspirational rate of return for GSK’s R&D of around 14%. We have made fundamental changes to how we allocate our R&D expenditure, directing it to our late stage pipeline and reducing cost and risk through externalising parts of early-stage discovery; dismantling infrastructure; and terminating development in areas with low financial and scientific return.

Improved cash generation

Improvements in business efficiency are also helping drive cash generation. Adjusted 2010 net cash inflow before legal settlements was £8.8 billion, up 9% in sterling terms, reflecting the benefits of our ongoing restructuring programme and the success of our working capital initiatives. During 2010, working capital reduced by £1.3 billion (including £600 million of cash from lower pandemic receivables).

Cash outflow in respect of the settlement of legal matters was £2 billion in the year, resulting in net cash inflow from operating activities of £6.8 billion.

Net debt was £8.9 billion, £0.6 billion lower than the previous year. This positions the Group well to accommodate the already provided for legal costs as they become payable, whilst continuing to support our ongoing investment programmes and delivery of targeted returns to shareholders.

Increasing returns to shareholders

With improvements in our cash position, we are increasing returns to shareholders.

We increased GSK’s dividend by 7% to 65p in 2010 and our priority is to deliver further growth in the dividend. Since 2005, dividends have increased each year with average growth of 8% over the five-year period.

Today, we are announcing that we will buy back shares again. In 2011, as part of a new long-term share buy-back programme and depending on market conditions, we expect to repurchase £1-2 billion of shares.

Our commitment is to use free cash flow to support increasing dividends, undertake share repurchases or, where returns are more attractive, invest in bolt-on acquisitions.

Summary

In conclusion, whilst our operating environment remains challenging, I believe we have made significant progress through restructuring and a rigorous returns-based approach to capital allocation. Our business is more balanced and is generating underlying sales growth. Our broad and diverse pipeline is generating increasing potential. Our cash generation is strong and we are enhancing returns to shareholders. With the rest of GSK’s management team, I remain confident that we can generate increased value for shareholders and deliver even better outcomes to patients and consumers.

Andrew Witty
Chief Executive Officer

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

Issued: Thursday, 3rd February 2011, London, U.K.		4

PRESS RELEASE

Full year trading update

Turnover and key product movements impacting growth for full year 2010

Total Group turnover for the year declined 1% to £28.4 billion, with pharmaceutical turnover down 2% to £23.4 billion and Consumer Healthcare sales up 5% to £5.0 billion. Excluding pandemic products, Valtrex and Avandia, Group sales were up 4.5% for the year.

Regional pharmaceutical turnover

US pharmaceuticals sales declined 11% to £7.6 billion, primarily due to generic competition to Valtrex, a significant reduction in sales of pandemic related products and lower sales of Avandia. Excluding these products, sales grew 3%, despite the discontinuation of GSK’s promotion of Boniva, the sale of Wellbutrin XL in May 2009, and the impact of US healthcare reform across the product range. New products launched since 2007 grew 29% and contributed 8% of 2010 sales.

Europe pharmaceuticals sales declined 6% to £6.5 billion, primarily due to the impact of a significant reduction in sales of pandemic related products, generic competition to Valtrex and lower sales of Avandia. Excluding these products, sales were flat, reflecting the impact of government austerity measures.

Emerging Markets pharmaceutical sales grew 22% to £3.6 billion, with strong growth across most product categories and also helped by pandemic related product sales of £227 million (2009: £89 million). Asia Pacific/Japan pharmaceutical sales grew 9% to £3.1 billion. Excluding pandemic related products, Valtrex and Avandia, sales grew 20% in Emerging Markets and 7% in Asia Pacific/Japan.

Pharmaceutical products

Seretide/Advair sales grew 2% to £5.1 billion, with strong growth in Japan (+17% to £246 million) and Emerging Markets (+16% to £328 million). Sales in the USA were level at £2.6 billion and grew 2% in Europe to £1.6 billion.

Several other respiratory products delivered growth including Avamys/Veramyst (+33% to £193 million), Ventolin (+8% to £522 million) and Flovent (+2% to £804 million).

Total vaccine sales grew 15% to £4.3 billion, including £1.2 billion of pandemic vaccine sales (2009: £883 million). Several new vaccines contributed to this growth including Synflorix (more than doubling to £221 million), Boostrix (+29% to £181 million) and Cervarix (+26% to £242 million). Sales of Hepatitis vaccines grew 7% to £720 million, Infanrix/Pediarix grew 8% to £700 million and seasonal flu sales grew 14% to £241 million. Rotarix sales were down 18% to £235 million, as the product continues to recover market share lost following its temporary suspension from several markets earlier in the year.

Relenza sales were £121 million (2009: £720 million), down 84%, against the previous year where significant government orders were received.

Dermatology sales were £1,087 million, including heritage GSK products and those acquired through business acquisitions, principally Stiefel in July 2009. The estimated sales growth in 2010 for the business on a pro-forma basis (excluding 2010 acquisitions) is approximately 6%. In addition, GSK’s heritage consumer dermatology portfolio, reported within Consumer Healthcare, contributed sales of £256 million (+8%).

Other strong pharmaceutical performances during the year included Tykerb (+34% to £227 million), Arixtra (+19% to £301 million), Avodart (+18% to £629 million), and Lovaza (+17% to £530 million). Newly launched oncology products Votrient and Arzerra delivered sales of £38 million and £31 million, respectively.

Issued: Thursday, 3rd February 2011, London, U.K.		5

PRESS RELEASE

Valtrex sales (-60% to £532 million) were impacted by generic competition in the USA and Europe. Boniva’s reported sales of £78 million were down 69%, primarily reflecting the transfer to Genentech of the exclusive promotion rights in the USA on 1st January 2010. Reported sales of Wellbutrin declined 39% to £81 million, reflecting the sale of Wellbutrin XL in the USA to Biovail in Q2 2009.

Avandia sales declined by 44% to £440 million. On 23rd September 2010 the European Medicines Agency suspended marketing authorisation for all Avandia containing products and the US Food and Drug Administration announced additional measures to ensure continued safe use of Avandia, including a Risk Evaluation and Mitigation Strategy (REMS) programme. As a result, GSK expects global sales of Avandia containing products to be minimal in the future.

Sales of HIV products by ViiV Healthcare were down 3% to £1.6 billion. Sales of the former Pfizer products Selzentry and Viracept (combined sales of £118 million) and growth from Epzicom/Kivexa (+1% to £555 million) partially offset reductions in the sales from other HIV products including Trizivir (-28% to £144 million) and Combivir (-16% to £363 million).

Consumer Healthcare

Total Consumer Healthcare sales were up 5% to £5.0 billion, significantly outgrowing market growth estimated to be approximately 2%.

Sales in the Rest of World grew 13% to £2.0 billion, driven by strong growth in India and China, which grew by 19% and 18%, respectively. Europe sales were level with last year with sales of £2.0 billion and the business in the USA grew 1% to £1.0 billion.

On a category basis, global Oral care sales grew 6% to £1,602 million led by growth of Sensodyne in all regions and Nutritional healthcare sales grew 9% to £952 million. Sales of OTC medicines were £2,456 million, up 3%, with strong growth of Panadol and smoking control products partly offset by lower sales of alli in both the USA and Europe and lower sales of respiratory tract products due in part to a relatively weak flu season earlier in 2010.

Operating profit and earnings per share commentary — year ended 31st December 2010

Results before major restructuring

Operating profit before major restructuring for the year ended 31st December 2010 was £5,128 million, a 48% decline in CER terms (a decrease of 45% in sterling terms). Excluding legal costs of £4,001 million, operating profit was £9,129 million, an 11% decline in CER terms (a decrease of 7% in sterling terms) principally reflecting a 1% decline in turnover, higher cost of sales and lower other operating income partly offset by reduced SG&A costs. Operating profit margin excluding legal costs and other operating income was 30.4% in 2010. The company expects the operating profit margin excluding legal costs and other operating income to be around 1 percentage point lower in 2011.

Cost of sales increased to 26.1% of turnover (2009: 25.0%) reflecting the impact of generic competition to higher margin products in the USA (principally Valtrex), lower Avandia sales, US healthcare reforms and European austerity price cuts, and inventory and other asset write-downs, partially offset by savings from the Operational Excellence programme. The company expects cost of sales as a percentage of turnover in 2011 to remain around 26%.

SG&A costs as a percentage of turnover increased by 11.2 percentage points to 43.6%. Excluding legal costs of £4,001 million (2009: £591 million), SG&A costs were 29.5% of turnover (2009: 30.3%). This reflected operational excellence savings in the USA and Europe and lower exchange losses on inter-company transactions, partially offset by investment in growth markets and the full year impact of the acquisition of Stiefel. The company expects SG&A costs excluding legal charges to be around 30.5% of turnover in 2011.

Issued: Thursday, 3rd February 2011, London, U.K.		6

PRESS RELEASE

R&D expenditure was 14.0% of total turnover (2009: 13.9%) and included savings from the Operational Excellence programme, partially offset by higher ViiV R&D investment. The comparison to prior year was unfavourably impacted by the one-off recognition of a recoverable balance in 2009, partly offset by lower intangible asset impairments of £126 million (2009: £167 million). The company expects R&D costs as a percentage of turnover to remain around 14% in 2011.

Other operating income was £493 million (2009: £1,135 million) primarily reflecting royalty income of £296 million (2009: £296 million), income from the transfer to Genentech of the exclusive promotion rights to Boniva in the USA, and asset disposals of £134 million (2009: £875 million), partially offset by equity investment impairments of £65 million (2009: £135 million). The 2009 income included the disposal of Wellbutrin XL, various asset disposals to Aspen Pharmacare, a royalty dispute settlement gain of £78 million and the accounting gain of £296 million on the creation of ViiV Healthcare. In 2011 the company expects other operating income to be around £600 million, excluding the profit arising on the proposed Consumer Healthcare divestments of non-core OTC brands.

Net interest payable for the year was £712 million (2009: £710 million) and the company expects a similar charge in 2011.

Profit on disposal of interests in associates was £8 million. The 2009 profit of £115 million arose from the sale of 5.7 million Quest shares. Subsequent to the year-end, the company sold its entire shareholding in Quest, which will give rise to a pre-tax profit on disposal of associates of approximately £600 million (£250 million after tax).

The charge for taxation on profit before major restructuring charges amounted to £1,544 million and represents an effective tax rate of 34.3% (2009: 28.0%). The company currently expects an underlying tax rate in 2011 of around 27%. The tax due on the profit realised on the disposal of the shareholding in Quest will increase the overall tax rate for 2011 to around 29.5%. This excludes the effect of any tax that may arise on the proposed Consumer Healthcare divestments of non-core brands.

EPS before major restructuring of 53.9p decreased 59% in CER terms (a 56% decrease in sterling terms) compared with 2009. Excluding legal costs EPS before major restructuring decreased 11% in CER terms. The favourable currency impact of three percentage points reflected the weakness of Sterling against most major international currencies compared with last year, partially offset by the strengthening of Sterling against the Euro.

Total results after restructuring

Operating profit after restructuring for the year ended 31st December 2010 was £3,783 million, a decrease of 59% CER (a decrease of 55% in sterling terms) compared with 2009. This included £1,345 million of restructuring charges (2009: £832 million); £187 million was charged to cost of sales (2009: £285 million), £665 million to SG&A (2009: £392 million) and £493 million to R&D (2009: £155 million). EPS after restructuring of 32.1p decreased 75% in CER terms (a decrease of 71% in sterling terms) compared with 2009.

The current £4.5 billion Operational Excellence restructuring programme delivered £1.7 billion of cumulative annual savings in 2010, and remains on track to deliver full year savings of £2.2 billion by 2012. The cumulative charge incurred to 31st December 2010 was £3.6 billion, which includes £0.2 billion of charges for integration of new businesses.

Issued: Thursday, 3rd February 2011, London, U.K.		7

PRESS RELEASE

Cash flow and net debt

The adjusted net cash inflow from operating activities before legal settlements of £2,047 million (2009: £254 million) was £8,844 million, a 9% increase in sterling terms over 2009. The 2010 cash flow benefited from a net working capital reduction of £1,297 million. This net inflow was used to fund net interest of £668 million, capital expenditure on property, plant and equipment and intangible assets of £1,635 million, equity investments of £279 million, acquisitions of £354 million, repayment of short-term loans of £1,296 million and the dividends paid to shareholders of £3,205 million.

Net debt decreased by £585 million during the year to £8.9 billion, comprising gross debt of £15.1 billion and cash and liquid investments of £6.2 billion.

At 31st December 2010, GSK had short-term borrowings (including overdrafts) repayable within 12 months of £291 million with loans of £2,559 million repayable in the subsequent year.

Dividends

The Board has declared a fourth interim dividend of 19 pence per share resulting in a dividend for the year of 65 pence, a 4 pence increase on the 61 pence per share for 2009. The equivalent interim dividend receivable by ADR holders is 61.5296 cents per ADS based on an exchange rate of £1/$1.6192. The ex-dividend date will be 9th February 2011, with a record date of 11th February 2011 and a payment date of 7th April 2011.

Currency impact

The 2010 results are based on average exchange rates, principally £1/$1.55, £1/€1.16 and £1/Yen 136. Comparative exchange rates are given on page 31. The period end exchange rates were £1/$1.56, £1/€1.17 and £1/Yen 127. If exchange rates were to hold at these period end levels for the rest of 2011 and there were no exchange gains or losses, the estimated positive impact on 2011 sterling EPS before major restructuring would be approximately 0.9p.

Additional income statement information

To improve transparency and understanding of our increasingly diversified business additional detailed financial information is provided on pages 32 to 35.

Issued: Thursday, 3rd February 2011, London, U.K.		8

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		David Mawdsley		(020) 8047 5502
				Claire Brough		(020) 8047 5502
				Alexandra Harrison		(020) 8047 5502
				Stephen Rea		(020) 8047 5502
		USA Media		Nancy Pekarek		(919) 483 2839
				Mary Anne Rhyne		(919) 483 2839
				Kevin Colgan		(919) 483 2839
				Jennifer Armstrong		(919) 483 2839
		European Analyst / Investor		Sally Ferguson		(020) 8047 5543
				Gary Davies		(020) 8047 5503
				Ziba Shamsi		(020) 8047 3289
		US Analyst / Investor		Tom Curry		(215) 751 5419

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 acquisitions of Reliant Pharmaceuticals in December 2007 and Stiefel in July 2009. 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.

Underlying sales growth

Underlying sales growth excludes the sales of pandemic products, Avandia and Valtrex. Management believes this measure assists shareholders in gaining a clearer understanding of the Group’s sales performance and prospects because of the size and nature of the loss of sales from these products in 2010 and 2011. Sales of these products were:

		2010				2009
		£m				£m
Pandemic products			1,313				1,603
Avandia			440				771
Valtrex			532				1,294

Brand names and partner acknowledgements

Brand names appearing in italics throughout this document are trademarks of GSK or associated companies or used under licence by the Group.

White pills/western markets

White pills/western markets refers to sales of tablets and simple injectables (excluding biopharmaceuticals and vaccines) in North America and Europe.

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 2009.

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

Issued: Thursday, 3rd February 2011, London, U.K.		9

PRESS RELEASE

Income statement

Year ended 31st December 2010

		Results																Results
		before major								Major								before major				Major
		restructuring								restructuring				Total				restructuring				restructuring				Total
		2010				Growth				2010				2010				2009				2009				2009
		£m				CER%				£m				£m				£m				£m				£m
TURNOVER			28,392				(1	)							28,392				28,368								28,368
Cost of sales			(7,405	)			4				(187	)			(7,592	)			(7,095	)			(285	)			(7,380	)
Gross profit			20,987				(3	)			(187	)			20,800				21,273				(285	)			20,988
Selling, general and administration			(12,388	)			35				(665	)			(13,053	)			(9,200	)			(392	)			(9,592	)
Research and development			(3,964	)			—				(493	)			(4,457	)			(3,951	)			(155	)			(4,106	)
Other operating income			493												493				1,135								1,135
OPERATING PROFIT			5,128				(48	)			(1,345	)			3,783				9,257				(832	)			8,425
Finance income			116												116				70								70
Finance expense			(828	)							(3	)			(831	)			(780	)			(3	)			(783	)
Profit on disposal of interest in associates			8												8				115								115
Share of after tax profits of associates and joint ventures			81												81				64								64
PROFIT BEFORE TAXATION			4,505				(52	)			(1,348	)			3,157				8,726				(835	)			7,891
Taxation			(1,544	)							240				(1,304	)			(2,443	)			221				(2,222	)
Tax rate %			34.3	%											41.3	%			28.0	%							28.2	%
PROFIT AFTER TAXATION FOR THE YEAR			2,961				(56	)			(1,108	)			1,853				6,283				(614	)			5,669
Profit attributable to non-controlling interests			219												219				138								138
Profit attributable to shareholders			2,742								(1,108	)			1,634				6,145				(614	)			5,531
			2,961								(1,108	)			1,853				6,283				(614	)			5,669
EARNINGS PER SHARE			53.9	p			(59	)							32.1	p			121.2	p							109.1	p
Diluted earnings per share			53.5	p											31.9	p			120.3	p							108.2	p

Issued: Thursday, 3rd February 2011, London, U.K.		10

PRESS RELEASE

Pharmaceuticals turnover
Year ended 31st December 2010

		Total								USA								Europe								Emerging Markets								Rest of World
		£m				CER%				£m				CER%				£m				CER%				£m				CER%				£m				CER%
Respiratory			7,238				3				3,394				1				2,149				—				616				19				1,079				4
Avamys/Veramyst			193				33				69				—				56				27				31				>100				37				94
Flixonase/Flonase			164				(5	)			37				37				40				(7	)			39				11				48				(30	)
Flixotide/Flovent			804				2				431				8				159				(9	)			48				38				166				(10	)
Seretide/Advair			5,139				2				2,604				—				1,601				2				328				16				606				10
Serevent			201				(16	)			64				(12	)			98				(16	)			2				(33	)			37				(23	)
Ventolin			522				8				179				16				142				(3	)			112				19				89				(2	)
Zyrtec			82				4				—				—				—				—				14				—				68				5
Anti-virals			1,086				(56	)			370				(68	)			109				(73	)			223				(3	)			384				(44	)
Hepsera			128				6				—				—				1				—				58				10				69				2
Relenza			121				(84	)			43				(69	)			6				(97	)			1				(97	)			71				(80	)
Valtrex			532				(60	)			252				(73	)			68				(56	)			28				8				184				2
Zeffix			233				4				13				(24	)			26				(10	)			136				17				58				(5	)
Central nervous system			1,753				(8	)			505				(23	)			540				(4	)			223				17				485				(2	)
Imigran/Imitrex			212				(21	)			75				(39	)			85				(10	)			5				—				47				2
Lamictal			504				1				257				(4	)			143				(6	)			57				23				47				42
Requip			233				11				44				69				137				2				3				50				49				2
Seroxat/Paxil			482				(12	)			27				(36	)			82				(15	)			73				(3	)			300				(9	)
Treximet			56				2				55				2				—				—				—				—				1				—
Wellbutrin			81				(39	)			24				(73	)			39				33				13				30				5				(25	)
Cardiovascular and urogenital			2,570				11				1,571				10				610				7				134				25				255				23
Arixtra			301				19				177				25				99				8				10				43				15				18
Avodart			629				18				337				5				175				22				33				50				84				90
Coreg			171				(1	)			170				(1	)			—				—				—				—				1				—
Fraxiparine			222				(2	)			—				—				154				(9	)			55				29				13				(7	)
Lovaza			530				17				528				17				—				—				—				—				2				—
Vesicare			114				9				113				8				—				—				—				—				1				—
Volibris			46				>100				—				—				40				>100				1				—				5				>100
Metabolic			678				(44	)			238				(59	)			166				(38	)			91				(24	)			183				(17	)
Avandia products			440				(44	)			237				(45	)			88				(48	)			42				(43	)			73				(32	)
Bonviva/Boniva			78				(69	)			—				(100	)			64				(26	)			2				—				12				22
Anti-bacterials			1,396				(4	)			75				(28	)			536				(14	)			609				10				176				1
Augmentin			625				(6	)			11				(76	)			240				(17	)			291				15				83				10
Oncology and emesis			688				9				350				13				201				1				62				7				75				17
Arzerra			31				>100				26				>100				4				—				—				—				1				—
Hycamtin			144				(16	)			83				(17	)			48				(17	)			7				17				6				(14	)
Promacta			31				>100				25				92				5				—				—				—				1				—
Tyverb/Tykerb			227				34				70				28				94				28				30				36				33				72
Votrient			38				>100				33				>100				4				—				—				—				1				—
Vaccines			4,326				15				763				(7	)			1,681				(2	)			927				38				955				85
Boostrix			181				29				110				51				43				10				9				29				19				(16	)
Cervarix			242				26				13				>100				116				(14	)			25				4				88				>100
Fluarix, FluLaval			241				14				110				51				63				(8	)			40				(5	)			28				—
Flu Pandemic			1,192				31				1				(99	)			488				(6	)			226				>100				477				>100
Hepatitis			720				7				307				19				242				(6	)			88				8				83				15
Infanrix, Pediarix			700				8				146				8				429				8				50				13				75				3
Rotarix			235				(18	)			74				(4	)			38				(28	)			102				(22	)			21				(17	)
Synflorix			221				>100				—				—				43				38				149				>100				29				>100
Dermatologicals			1,087				51				358				70				246				48				286				52				197				26
Bactroban			119				(3	)			51				(14	)			27				8				28				7				13				—
Dermovate			74				—				—				—				19				—				30				—				25				—
Duac			116				>100				67				>100				23				>100				11				>100				15				>100
Soriatane			71				>100				71				>100				—				—				—				—				—				—
Zovirax			152				15				53				>100				27				(10	)			26				9				46				(14	)
Other			994				16				24				53				310				9				385				37				275				—
			21,816				(2	)			7,648				(11	)			6,548				(6	)			3,556				22				4,064				6
ViiV Healthcare (HIV)			1,566				(3	)			660				(8	)			585				(5	)			146				35				175				7
Combivir			363				(16	)			143				(24	)			117				(21	)			63				22				40				(3	)
Epivir			115				(12	)			40				(17	)			37				(22	)			18				31				20				—
Epzicom/Kivexa			555				1				210				(7	)			245				3				29				38				71				14
Lexiva			155				(12	)			80				(19	)			51				(15	)			13				86				11				—
Selzentry			80				>100				34				—				41				>100				2				—				3				—
Trizivir			144				(28	)			73				(30	)			60				(26	)			4				(43	)			7				(13	)
			23,382				(2	)

Pharmaceutical turnover includes co-promotion income.

Issued: Thursday, 3rd February 2011, London, U.K.		11

PRESS RELEASE

Consumer Healthcare turnover
Year ended 31st December 2010

		Total
		£m				CER%
Over-the-counter medicines			2,456				3
Oral healthcare			1,602				6
Nutritional healthcare			952				9
			5,010				5

		Total
		£m				CER%
USA			1,037				1
Europe			1,958				—
Rest of World			2,015				13
			5,010				5

Statement of comprehensive income

		2010				2009
		£m				£m
Profit for the year			1,853				5,669
Exchange movements on overseas net assets and net investment hedges			166				(194	)
Reclassification of exchange on liquidation or disposal of overseas subsidiaries			(2	)			(44	)
Tax on exchange movements			—				19
Fair value movements on available-for-sale investments			94				42
Deferred tax on fair value movements on available-for-sale investments			(25	)			(24	)
Reclassification of fair value movements on available-for-sale investments			1				—
Deferred tax reversed on reclassification of available-for-sale investments			(3	)			13
Actuarial losses on defined benefit plans			(1	)			(659	)
Deferred tax on actuarial movements in defined benefit plans			1				183
Fair value movements on cash flow hedges			(8	)			(6	)
Deferred tax on fair value movements on cash flow hedges			1				2
Reclassification of cash flow hedges to income statement			3				1
Fair value movement in subsidiary acquisition			—				(6	)
Cash flow hedge re-allocated on subsidiary acquisition			6				—
Other comprehensive income/(expense) for the year			233				(673	)
Total comprehensive income for the year			2,086				4,996
Total comprehensive income for the year attributable to:
Shareholders			1,847				4,895
Non-controlling interests			239				101
			2,086				4,996

Issued: Thursday, 3rd February 2011, London, U.K.		12

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 terminated in the last quarterly update and are no longer included in the table: Avandamet XR, Avandia+statin and Simplirix. Additionally, development of almorexant was discontinued in January 2011.

The table includes 5 new late stage assets that entered Phase III since the last update:

IPX066 (from Impax) for Parkinson’s disease
‘444+’719 (LABA/LAMA combination) for COPD
1605786 (CCX282) for Crohn’s disease
migalastat HCl (from Amicus) for Fabry disease
‘572+Kivexa FDC (from ViiV/Shionogi) for HIV

By the end of 2012, Phase III data is expected on the following 15 assets:

migalastat HCl, 2118436, 1349572, IPX066, ‘444+’719, Mosquirix, 1120212, otelixizumab, pazopanib, Promacta, 2402968, Relovair, albiglutide, Tykerb, MAGE-A3 — event driven

Biopharmaceuticals				USA		EU		News update in the quarter
Arzerra (ofatumumab)		CLL (first line & relapsed)		Ph III		Ph III
		NHL (FL)		Ph III		Ph III
		NHL (DLBCL)		Ph III		Ph III
Benlysta (belimumab)		Systemic lupus		Filed Jun 2010		Filed Jun 2010		Positive AdCom on 16th November 2010. PDUFA date extended to 10th March 2011.
otelixizumab		Type 1 diabetes		Ph III		Ph III
albiglutide (formerly known as Syncria)		Type 2 diabetes		Ph III		Ph III		Recruitment complete in all 8 Phase III studies.
Prolia (denosumab)		Post menopausal osteoporosis		n/a		Launched		Filings taking place in expansion territory emerging markets.
Cardiovascular & Metabolic				USA		EU		News update in the quarter
darapladib		Atherosclerosis		Ph III		Ph III
Neurosciences				USA		EU		News update in the quarter
Horizant		RLS		Filed		n/a		Response to CR letter accepted by FDA 5th November 2010. PDUFA date 6th April 2011. Ex-US rights returned to Xenoport.
almorexant		Primary insomnia		n/a		n/a		Discontinued in January 2011 following review of tolerability data from additional studies.
Potiga (ezogabine)/Trobalt (retigabine)		Epilepsy		Filed		Filed		Received CR letter from FDA on 20th November 2010. CHMP positive opinion received on 21st January 2011.
IPX066		Parkinson’s disease		Ph III		Ph III		Co-development agreement with Impax announced 16th December 2010.
Oncology				USA		EU		News update in the quarter
Promacta/Revolade		Hepatitis C		Ph III		Ph III
		CLD		Ph III		Ph III		Next steps under review.
Avodart		Prostate cancer prevention		Filed		Filed		Negative AdCom on 1st December 2010. Received CR letter from FDA on 26th January 2011.

Issued: Thursday, 3rd February 2011, London, U.K.		13

PRESS RELEASE

Oncology / contd.				USA		EU		News update in the quarter
Votrient		Sarcoma		Ph III		Ph III
(pazopanib)		Ovarian		Ph III		Ph III
Tykerb		First-line metastatic breast cancer		Ph III		Ph III
		Adjuvant breast cancer		Ph III		Ph III		Positive data from ‘535 study and Tykerb+Herceptin combination in neo-ALTTO study presented at San Antonio Breast Cancer Symposium, December 2010.
		Head & neck cancer		Ph III		Ph III
		Gastric cancer		Ph III		Ph III
1120212 (MEK inhibitor)		Metastatic melanoma		Ph III		Ph III		Phase III study commenced in January 2011.
2118436 (BRaf inhibitor)		Metastatic melanoma		Ph III		Ph III		Phase III study commenced in January 2011.
Respiratory & Immuno-inflammation				USA		EU		News update in the quarter
Relovair (‘444+‘698)		COPD		Ph III		Ph III		Phase III outcomes study commenced January 2011.
		Asthma		Ph III		Ph III
1605786 (CCX282)		Crohn’s disease		Ph III		Ph III		Phase III study commenced in January 2011.
‘444+‘719		COPD		Ph III		Ph III		Phase III study commenced in February 2011.
Rare Diseases				USA		EU		News update in the quarter
migalastat HCl		Fabry disease		Ph III		Ph III		Co-development agreement with Amicus announced 29th October 2010.
2402968 (PRO051)		Duchenne muscular dystrophy				Ph III		Phase III study commenced in January 2011.
2696273 (Ex-vivo stem cell gene therapy)		adenosine deaminase severe combined immune deficiency (ADA-SCID)				Ph II/III
Vaccines				USA		EU		News update in the quarter
Menhibrix (HibMenCY-TT)		MenCY and Hib prophylaxis		Filed		n/a		Expect to respond to FDA Complete Response letter in H1 2011.
MAGE-A3		Melanoma		Ph III		Ph III
		NSCLC		Ph III		Ph III
Nimenrix (MenACWY)		MenACWY prophylaxis		Ph III		Ph III
Herpes zoster		Shingles prophylaxis		Ph III		Ph III
Mosquirix		Malaria prophylaxis		n/a		n/a		Phase III study ongoing in Africa.
HIV (ViiV Healthcare)				USA		EU		News update in the quarter
1349572		HIV integrase inhibitor		Ph III		Ph III
‘572+Kivexa FDC		HIV integrase inhibitor + abacavir + lamivudine FDC		Ph III		Ph III		Phase III study commenced in February 2011.

Issued: Thursday, 3rd February 2011, London, U.K.		14

PRESS RELEASE

Turnover and key product movements impacting growth — Q4 2010

Total Group turnover for the quarter declined 13% to £7,197 million, with pharmaceutical turnover down 16% to £5,930 million and Consumer Healthcare sales up 4% to £1,267 million. Excluding pandemic products, Valtrex and Avandia, Group sales were up 2% in the quarter.

Regional pharmaceutical turnover

US pharmaceuticals sales declined 22% to £1,854 million, primarily due to a significant reduction in sales of pandemic related products, generic competition to Valtrex and lower sales of Avandia. Excluding these products, sales fell 6% reflecting the discontinuation of GSK’s promotion of Boniva, and the impact of US Healthcare Reform on other products.

Europe pharmaceutical sales declined 24% to £1,647 million, primarily due to the impact of a significant reduction in sales of pandemic related products, generic competition to Valtrex and lower sales of Avandia. Excluding these products, sales were down 1%, reflecting the impact of government austerity measures.

Emerging Markets pharmaceutical sales grew 16% to £969 million, with strong growth across most product categories partly offset by a reduction in pandemic sales. Excluding sales of pandemic products, Valtrex and Avandia, sales grew 28%.

Asia Pacific/Japan pharmaceutical sales declined 11% to £797 million. Excluding sales of pandemic related products, Valtrex and Avandia, sales were £724 million (+8%).

Pharmaceutical products

Sales of Seretide/Advair declined 4% to £1,346 million in the quarter, with growth in Emerging Markets (+14% to £85 million) and Japan (+6% to £81 million) offset by reductions in the USA (-7% to £670 million) and Europe (-3% to £416 million). Higher levels of discounts required as a result of US Healthcare Reform and austerity measures by European governments negatively impacted growth for the product in both the USA and in Europe.

Other respiratory products sales during the quarter were: Avamys/Veramyst (+45% to £50 million), Ventolin (-1% to £142 million) and Flovent (-5% to £220 million). The reported growth rates for both Ventolin and Flovent were negatively impacted by variations in US shipping patterns.

Total vaccine sales (excluding pandemic sales) were £833 million (+20%), with strong growth in Asia Pacific/Japan (+48% to £88 million), Emerging Markets (+34% to £235 million), the USA (+26% to £171 million) and Europe (+10% to £303 million). Contributions from new vaccines included Cervarix (+68% to £67 million, including £23 million in Japan) and Boostrix (+37% to £49 million). Synflorix sales were down 2% to £48 million, following large shipments in Q3 2010. Sales of the Hepatitis vaccines grew 5% to £164 million and seasonal flu sales grew 64% to £69 million. Rotarix sales were up 11% to £79 million, as the product continues to recover market share lost following its temporary suspension from several markets earlier in the year.

Pandemic vaccines sales were £161 million compared with Q4 2009 sales of £836 million. Relenza sales were £11 million compared with Q4 2009 sales of £256 million, which benefited from significant government orders.

Dermatology sales grew 10% to £288 million in the quarter. In addition, GSK’s heritage consumer dermatology portfolio, reported within Consumer Healthcare, contributed sales of £63 million (+11%).

Other strong pharmaceutical performances in the quarter included Tykerb (+23% to £60 million), Avodart (+22% to £177 million), Lovaza (+11% to £147 million) and Arixtra (+8% to £80 million). Newly launched oncology products Votrient and Arzerra delivered sales in the quarter of £14 million and £9 million, respectively.

Valtrex sales (-60% to £96 million) continued to be impacted by generic competition in the USA and Europe. Boniva’s reported sales of £18 million were down 73%, primarily reflecting the transfer to Genentech of the exclusive promotion rights in the USA on 1st January 2010.

Avandia sales declined by 76% to £49 million. On 23rd September 2010 the European Medicines Agency suspended marketing authorisation for all Avandia containing products and the US Food and Drug Administration announced additional measures to ensure continued safe use of Avandia, including a Risk and Evaluation and Mitigation Strategy (REMS) programme. As a result, GSK expects global sales of products containing Avandia to be minimal in the future.

Issued: Thursday, 3rd February 2011, London, U.K.		15

PRESS RELEASE

Sales of HIV products by ViiV Healthcare were down 4% to £403 million. Sales of the former Pfizer products Selzentry and Viracept (combined sales of £30 million in the quarter) partly offset reductions in the sales from other HIV products including Trizivir (-35% to £32 million), Combivir (-11% to £99 million) and Epzicom/Kivexa (-3% to £146 million).

Consumer Healthcare

Total Consumer Healthcare sales were up 4% to £1,267 million, ahead of market growth for the quarter estimated to be approximately 3%.

On a regional basis, sales in the Rest of World markets continued to perform strongly (+13% to £485 million) with growth across all major categories. Sales in Brazil and Japan were particularly strong, helped by growth of smoking control product sales. In Europe, sales were down 3% to £503 million, mainly due to lower sales of alli and a challenging comparison to Q4 2009 which saw strong growth of Cold and flu products. US sales were up 5% to £279 million, with strong performances from Tums, Abreva, Breathe Right and smoking control products, which were driven by innovation and enhanced consumer marketing.

On a category basis, global Oral healthcare sales grew 7% to £411 million led by Sensodyne, which grew strongly in all regions. Nutritional healthcare sales grew 7% to £211 million, as a result of geographic expansion and enhanced marketing behind the Horlicks brand. Sales of OTC medicines were £645 million, up 1%. Strong growth in Rest of World markets was partially offset by lower sales of alli in both the USA and Europe.

Operating profit and earnings per share commentary — Q4 2010

Results before major restructuring

The operating loss before major restructuring for Q4 2010 was £37 million, compared with an operating profit of £2,677 million in Q4 2009. Excluding legal costs of £2,165 million, the operating profit for Q4 2010 was £2,128 million, a 33% decrease, principally reflecting reduced sales of pandemic vaccines, Valtrex and Avandia, a higher cost of sales as a percentage of turnover and lower other operating income, partially offset by lower SG&A costs.

Cost of sales was 27.5% of turnover, higher than the prior year (Q4 2009: 25.9%), reflecting the impact of generic competition to higher margin products in the USA (principally Valtrex), lower pandemic and Avandia sales, the impact of US healthcare reforms and European austerity price cuts on net sales, partially offset by savings from the Operational Excellence programme.

SG&A costs as a percentage of turnover increased to 59.6% in the quarter (Q4 2009: 34.3%). Excluding legal costs of £2,165 million, SG&A costs were 29.5% of turnover which was unchanged from 2009. This reflected investment in growth markets, offset by Operational Excellence savings in the USA and Europe.

R&D expenditure was 15.0% of turnover in the quarter (Q4 2009: 13.5%) reflecting higher intangible asset impairments offset by savings from the restructuring programme on lower turnover.

Other operating income in the quarter was £118 million (2009: £553 million) primarily comprising royalty income of £74 million (Q4 2009: £67 million), asset disposals of £60 million (Q4 2009: £511 million) and offset by £31 million of equity impairments (Q4 2009: £36 million). Various asset disposals to Aspen Pharmacare and the accounting gain from the creation of ViiV Healthcare contributed to the profit from asset disposals in 2009.

The loss per share before major restructuring was 7.5p compared with earnings per share of 35.4p in Q4 2009.

Total results after restructuring

The operating loss after restructuring for Q4 2010 was £320 million, compared with an operating profit of £2,447 million in Q4 2009. This included £283 million of restructuring charges related to the restructuring programme (Q4 2009: £230 million); £97 million was charged to cost of sales (Q4 2009: £21 million), £172 million to SG&A (Q4 2009: £174 million) and £14 million to R&D (Q4 2009: £35 million). The loss per share after restructuring was 13.6p compared with earnings per share of 32.1p in Q4 2009.

Issued: Thursday, 3rd February 2011, London, U.K.		16

PRESS RELEASE

Income statement

Three months ended 31st December 2010

		Results																Results
		before major								Major								before major				Major
		restructuring								restructuring				Total				restructuring				restructuring				Total
		Q4 2010				Growth				Q4 2010				Q4 2010				Q4 2009				Q4 2009				Q4 2009
		£m				CER%				£m				£m				£m				£m				£m
TURNOVER			7,197				(13	)							7,197				8,094								8,094
Cost of sales			(1,980	)			(6	)			(97	)			(2,077	)			(2,098	)			(21	)			(2,119	)
Gross profit			5,217				(16	)			(97	)			5,120				5,996				(21	)			5,975
Selling, general and administration			(4,289	)			51				(172	)			(4,461	)			(2,780	)			(174	)			(2,954	)
Research and development			(1,083	)			(3	)			(14	)			(1,097	)			(1,092	)			(35	)			(1,127	)
Other operating income			118												118				553								553
OPERATING (LOSS)/PROFIT			(37	)			(>100	)			(283	)			(320	)			2,677				(230	)			2,447
Finance income			58												58				5								5
Finance expense			(240	)											(240	)			(213	)							(213	)
Profit on disposal of interest in associate			8												8
Share of after tax profits of associates and joint ventures			18												18				11								11
(LOSS)/PROFIT BEFORE TAXATION			(193	)			(>100	)			(283	)			(476	)			2,480				(230	)			2,250
Taxation			(134	)							(23	)			(157	)			(646	)			64				(582	)
Tax rate %			(69.4	)%											(33.0	)%			26.0	%							25.9	%
(LOSS)/PROFIT AFTER TAXATION FOR THE PERIOD			(327	)			(>100	)			(306	)			(633	)			1,834				(166	)			1,668
Profit attributable to non-controlling interests			57												57				38								38
(Loss)/profit attributable to shareholders			(384	)							(306	)			(690	)			1,796				(166	)			1,630
			(327	)			(>100	)			(306	)			(633	)			1,834				(166	)			1,668
(LOSS)/EARNINGS PER SHARE			(7.5	)p			(>100	)							(13.6	)p			35.4	p							32.1	p
Diluted (loss)/earnings per share			(7.5	)p											(13.4	)p			35.1	p							31.8	p