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Drug sales boost GSK profit
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July 24, 2001: 11:23 a.m. ET
Europe's largest drugsmaker reaps benefits of strong sales in drugs
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LONDON (CNN) - GlaxoSmithKline on Tuesday said second-quarter profit rose 13 percent to 1 billion pounds ($1.4 billion) on increased demand for its drugs.
Europe's largest drugmaker said its sales rose 13 percent to £5.1 billion in the three months to June 30, compared to the same period last year.
The markets had been awaiting the results in order to glean an idea of the health of pharmaceutical companies in Europe.
U.S.-based Pfizer had reported on Monday a 30 percent jump in second quarter income and predicted revenue growth would be in the 10 percent region for the year.
GSK said its earnings per share for the first three months to June 30 were 16.9 pence compared to 14.2 pence on the year-ago period.
Earnings per share before one time items were 20 pence per share, at the top end of expectations, compared to the year-ago figure of 17 pence per shares.
The company's Chief Executive Officer, Jean-Pierre Garnier said: "New products are driving growth, particularly the phenomenal success of Seretide, Advair and Avandia.
"We're on track to deliver earnings per share growth of around 13 percent constant exchange rate for the year which, if exchange rates hold at current levels, should be around 18 percent in sterling."
Seretide and Advair are the firm's key asthma products while Avandia is used for metabolic and gastro-intestinal problems.
Peter Cartwright, of investment bank Williams de Broe, told CNN: "GSK is being driven at the moment by good strong sales from the main in line products, from drugs such as Avandia and Paxil.
"All these are good established products. We've now seen some jolly good sales gains on the back of them."
Shares in GSK (GSK), the FTSE 100's second biggest stock, were up more than 1 percent at 1,981 pence.
GSK was created from last year's $68 billion merger of Glaxo Wellcome and SmithKline Beecham and the company's chief executive, Jean-Pierre Garnier, 53, has focused on using savings from the merger to up profits.
GlaxoSmithKline said it now expects to achieve costs savings from the merger of £1.8 billion by 2003, as opposed to its previous target of £1.6 billion.
GSK announces Japanese joint venture
GlaxoSmithKline announced earlier on Tuesday it had formed a joint venture with Shionogi of Japan to develop several experimental drugs, including new agents to fight HIV and neurological disorders.
The deal reflects GSK's goal of expanding its product pipeline by sealing agreements with international partners.
The venture is expected to operate in the U.S. and in major European markets and will initially have exclusive rights to develop and commercialise four compounds contributed by Shionogi and one by GlaxoSmithKline.
UK-based Astrazeneca (AZN), formed by the union of UK-based Zeneca Group with Sweden's Astra two years ago, is not expect to show the same sort of growth when it reports its results on Thursday.
The company is having to finance a rollout of new drugs while there are questions being raised over its current stable of big sellers.
Swiss pharmaceutical firms Novartis and Roche report next month, but few analysts have been recommending shares in the two slow growing companies. 
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