Drug giant's profits soar

The medicine is working for GlaxoSmithKline

GlaxoSmithKline, the world's second-biggest pharmaceutical firm, has reported a 15% rise in profits.

It made pre-tax profit for the second quarter of £1.7bn.

The result beat analysts' forecasts, with the firm's shares rising by nearly 1%, to 1,978p.

GlaxoSmithKline (GSK) attributed the result to the successful launch of some new products, notably diabetes treatment Avandia and asthma drug Seretide/Advair.

The firm also promised to tackle investors' concerns that its flow of new products may soon dry up.

Product problems

Chief executive Jean-Pierre Garnier said the company would "continue to aggressively build up our product portfolio, particularly our late-stage product portfolio".

Garnier: Promises to seek out new products

Earlier on Tuesday, GSK announced plans for a new joint venture with Shionogi, Japan's seventh-largest pharmaceutical company.

The venture will give it access to drugs to fight HIV and neurological disorders.

"Anything that comes across as interesting we will look at and we hope to be selected as a partner of choice by more companies, including other Japanese companies," said Mr Garnier.

Selling up

Sales in the April-June 2001 period rose 13% to £5.1bn, while sales in the US were up 20%.

The firm was formed by the merger of Glaxo Wellcome and SmithKline Beecham

For the first half of the year, pre-tax profit rose 17% to £3.1bn, while sales were up 15% to £9.9bn.

The company also announced an increase in planned merger and manufacturing cost savings to £1.8bn by 2003, from the £1.6bn forecast previously.

Last month GSK said it planned to cut more than 2,000 jobs, half of them in the UK, as part of the restructuring following the 2000 merger of Glaxo Wellcome and SmithKline Beecham.

GlaxoSmithKline is the first major European drug maker to report results for what analysts believe has been a healthy second quarter.

Smaller rivals Sanofi-Synthelabo, Schering and Aventis are all tipped to report strong profit growth over the next few days.