New drugs cure SmithKline's Tagamet blues

SmithKline Beecham said yesterday it had overcome last year's expiry of the protective patent on Tagamet, which was the best-selling ulcer drug, mainly through sales of new pharmaceuticals.

While sales of Tagamet fell by £200m in 1994, turnover from new drugs, led by the Paxil/ Seroxat anti-depressant, climbed 74 per cent to £810m.

This performance, coupled with acquisitions, helped SmithKline to beat most analysts' forecasts with a rise in underlying pre-tax profits from £1.22bn to £1.271bn for 1994. The shares - already buoyed by US clearance to market Havrix, the world's first hepatitis A vaccine - gained 18p to 497p.

Steve Plagg, analyst at NatWest Markets, said total sales of £6.49bn, up from £6.16bn, were in line with expectations, but trading profits, up from £1.08bn to £1.24bn, came in stronger than forecast.

"The latter can be attributed to stronger than expected performance in hepatitis B vaccine Energix-B and Clinical Laboratories. We continue to advise our clients to be fully weighted in the stock," he said.

Analysts were also heartened by the US clearance for Havrix, which was launched in the UK two years ago and is now on sale in 35 countries.

Stated taxable profits were £691m, depressed by £580m of restructuring charges. The one-off cost, which had been expected and should be paid back in three years, follows the purchase of Sterling and comprised £243m for reorganising the supply chain, £320m for integrating the business, and £17m for integrating research and development.

Jan Leschly, chief executive of SmithKline, which is raising the fourth interim dividend from 3.3p to 3.9p, said: "Our financial objectives were accomplished in large measure through growing sales of new products." Earnings per share, excluding exceptional costs, were 8.7p, up from 8.5p.

Paxil, known as Seroxat outside the US, saw worldwide sales advance 124 per cent to £333m. This, and buoyant sales of the Relafen arthritis medicine and the Kytril anti-nausea drug helped pharmaceutical sales in the US to rise by 7 per cent.

Excluding Tagamet, sales in the US grew by 17 per cent. "We are very pleased with what is happening in pharmaceuticals," said Mr Leschly.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test