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SmithKline 2Q net rises 19%
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July 25, 2000: 9:26 a.m. ET
Earnings rise as drug maker delays Glaxo merger, awaiting U.S. approval
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LONDON (CNNfn) - SmithKline Beecham PLC on Tuesday reported a 19 percent increase in second-quarter earnings, slightly exceeding analysts' expectations, as the British drug maker posted solid sales of antidepressant Seroxat/Paxil and antibiotic Augmentin.
The announcement came as SmithKline Beecham announced it would delay completion of its $76 billion merger with Glaxo Wellcome PLC for a month as the companies await needed approval from U.S. antitrust regulators.
SmithKline Beecham, which will be one the world's biggest drug makers when it combines with Glaxo, said second-quarter profit rose to £362 million ($549 million), or 5.9 pence per share, from £303 million, or 5 pence per share, a year earlier. Sales declined 3 percent to £2.08 billion, in part due to the sale of its healthcare business.
"SB had a strong second quarter," Chief Executive Officer Jean-Pierre Garnier said in a statement. "Sales were driven, once again, by
continued growth from Paxil/Seroxat, the selective serotonin reuptake
inhibitor, Augmentin, the broad-spectrum antibiotic and new products."
SmithKline said pretax profit rose to £1.06 billion ($1.65 billion) in the year's first half, from £928 million a year ago. That topped the expected range of £1.01 billion and £1.03 billion analysts had forecast according to a Reuters poll. First-half sales rose 9 percent to £4.1 billion.
On the merger front, SmithKline and Glaxo said they expect to complete their merger by September 25. They cited a hold-up in obtaining antitrust clearance in the United States as the reason why they would not achieve their previously proposed completion date of August 21.
The European Commission in May gave its approval for the merger, but attached the condition that the enlarged company divest SmithKline's antiviral products Famvir and Vectavir/Denavir, as well as Kytril, an anti-emetic drug.
The companies said they had reached agreements in principle with specific buyers for the products, subject to U.S. Federal Trade Commission consent. Glaxo and SmithKline shareholders will vote on the merger July 31.
SmithKline Beecham (SB-) rose 22.5 pence, or 2.8 percent, to 826.50 in London, while Glaxo Wellcome (GLXO) shares rose 60 pence, or 3.4 percent, to 1,851 pence. Glaxo is expected to report first-half income Thursday. 
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