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Last Updated: Thursday, 27 October 2005, 12:44 GMT 13:44 UK
Drug firm profits beat forecasts
Syringe, slide and test tube
Surging sales boosted the two firms
Drugs giants AstraZeneca and GlaxoSmithKline have unveiled forecast beating results, buoyed by strong demand for key drugs.

AstraZeneca said operating profits had surged 49% to $1.7bn (952m) in the three months to the end of September.

Meanwhile, Glaxo said strong sales of asthma and diabetes drugs lifted third quarter operating profits 19% to 1.7bn.

Glaxo said it was accelerating its preparations to supply a bird flu vaccine in the event of a pandemic.

Results of clinical trials of the vaccine against the H5N1 strain of flu that has killed around 60 people in Asia would be available by the middle of 2006, Glaxo said.

More of its factories would be converted to make a flu vaccine and plans to increase output of its anti-flu Relenza drug, the company said.

This quarter's performance shows the vitality of our business
Jean-Pierre, Glaxo chief

Like Tamiflu, Relenza is not a cure but treats flu symptoms.

Interest in Glaxo's vaccine business has been fuelled by the success of Cervarix, an experimental treatment to prevent the virus that leads to most cases of cervical cancer.

Shares in the company have rallied by about 25% in the past year on growing hopes for a plethora of new treatments.

"This quarter's performance shows the vitality of our business, which is again being driven by great performances from key products such as Advair, Avandia and our vaccines franchise," said chief executive Jean-Pierre Garnier.

Drugs setback

Strong sales of blockbuster drugs over the summer boosted AstraZeneca in the third quarter.

Sales of its top five products - including cholesterol drug Crestor, ulcer drug Nexium and schizophrenia treatment Seroquel - went up by 25%.

Chief executive Sir Tom McKillop called its profits performance an "outstanding result".

But AstraZeneca, Europe's third-largest drug maker, has suffered a number of setbacks with its new drugs.

The Anglo-Swedish group was forced to drop part of a trial to develop a drug for heart arrhythmia and trials for an incontinence treatment were halted.

The slow uptake of Crestor in the lucrative US market has also concerned investors.

But the company reported progress in other experimental medicines, notably for cancer.

"R&D will increased going forward next year, but we still expect a significant jump in margins driven by high-margin specialist products, in particular Seroquel," said Mark Purcell, analyst at Deutsche Bank.

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