The drug, fluticasone propionate, is already available as a treatment for hay fever under the name Flixonase. But its extension to the pounds 2.5bn-a-year respiratory market is important for Glaxo, which badly needs to broaden its product base.
More than half of Glaxo's profits are currently dependent on one drug, Zantac, the anti-ulcer treatment, and the performance of some of its newer drugs has proved disappointing.
The news boosted Glaxo's share price, which went on a roller- coaster ride yesterday following weekend reports that America's Food and Drug Administration had criticised the marketing of Zantac. In heavy trading, its shares tumbled 28p but recovered to close down 8p at 652p.
Glaxo, under its chief executive, Ernest Mario, played down the reports, admitting that the FDA had written in January warning that in its view some of the promotional claims made for Zantac were not justified.
But Glaxo insisted that the 'safety and effectiveness' of Zantac had not been called into question, and pointed out that at most the FDA would require it to write to US physicians correcting certain of the claims it had made.
Analysts said the problem was commonly encountered by drug companies. 'It's a storm in a teacup,' Paul Woodhouse, an analyst with Smith New Court, said.
The Stock Exchange said that it would be looking as a matter of routine at the movement in the share price. The implication is that a statement should perhaps have been made by the company when the problem arose.
But Mr Woodhouse insisted that the issue had been well aired. 'This was raised and discussed with analysts following the interim results last month,' he said.
Flixotide is an improved version of an inhaled steroid, a type of drug increasingly used to treat asthma since it attacks the inflammation that causes the asthma. Conventional treatments such as Glaxo's best-selling Ventolin merely ease its symptoms. Flixotide will therefore be able to substitute for lost Ventolin sales. It is also held to be more powerful and to have fewer side-effects than other steroids on the market.
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