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What happened

According to data from S&P Global Market Intelligence, shares of the British pharma giant GlaxoSmithKline (GSK -1.12%) slid by 4.8% in 2016.

GSK Chart

GSK data by YCharts.

The drugmaker's woes can be traced directly to the headwinds facing its top-selling asthma medicine Seretide/Advair. In a nutshell, the drug's revenue fell by 13% during the first nine months of 2016, compared to the same period a year ago, due to a mixture of declining sales volume and a new lower price that was part of Glaxo's campaign to appease payers. 

So what

Glaxo's run of bad luck on the clinical front over the past few years, combined with its pivot toward less profitable products like vaccines and consumer healthcare products, also played key roles in the pharma giant's less-than-stellar 2016. Basically, the company was counting on the launch of new blockbuster pharma products to overcome Seretide/Advair's declining market share.

When that plan imploded, management cut a deal with Novartis in 2015 to exchange Glaxo's high-margin oncology business for a host of less profitable vaccines, and the two companies also formed a joint venture for consumer healthcare products. The goal was to produce sustainable, albeit more modest, levels of growth. 

Now what

Glaxo is an intriguing position relative to its healthcare peers as a result of its decision to rely less on specialty medicines to drive growth moving forward. After all, it's no secret that President-elect Donald Trump's populist rhetoric is wreaking havoc on the pharma industry right now due to the widespread notion that drug companies are basically gouging U.S. consumers.

Whether Trump's stinging rhetoric will be enough to overcome the industry's ginormous lobbying presence in D.C. isn't clear. But it does put a premium on companies like Glaxo that are striving for better operational efficiency and higher sales volumes to create value for shareholders -- instead of regular price hikes for legacy products. 

The bottom line is that this brave deal with Novartis, which brought new star products like the meningitis vaccines Bexsero and Menveo into the fold, is starting to pay dividends from both a political and growth standpoint. So with a top line that's starting to rebound and is based on a sustainable growth model, Glaxo could be one of the better-performing pharma stocks this year.