Glaxo looks ahead to marketing push in US

GlaxoSmithKline, the UK's biggest drug maker, yesterday showed it is shrugging off competition to some of its biggest-selling drugs, saying it will outstrip the City's expectations for profits this year.

The company, which in May became the first to have an over-generous executive pay policy voted down by shareholders, said it was making more than £20m profit a day in the first six months of the year.

And it told investors to expect a giant marketing push in the US in the second half as it launches three new products it hopes will be blockbusters - treatments for depression, lymphoma and male impotence.

Jean-Pierre Garnier, GSK CEO, whose £11m severance package prompted the shareholder rebellion, said yesterday that the company was "weathering the loss" of patent protection for its multi-purpose antibiotic, Augmentin.

The launch of copycat versions of the drug in the US, the world's largest pharmaceuticals market, led to a 42 per cent slump in Augmentin sales in the first half.

Dr Garnier said: "It hasn't really slowed us down much and now we are entering an interesting period in the second half of the year, launching three new medicines in the US at least. We can shift a lot of our marketing resources around to the newer products and any increased costs should be absorbed by the additional sales."

GSK shares were among the best FTSE 100 performers, gaining 37p to 1,212p, after the company forecast "high single digits or better" percentage growth in earnings this year. The guidance is also no longer conditional on rivals failing to launch a copycat version of Paxil, its giant-selling US anti-depressant.

GSK made profits of £3.7bn in the first six months of the year, up 9 per cent on last year, or 18 per cent if the effects of the depreciating dollar are stripped out. Turnover was up 6 per cent in constant currency terms, with disappointment only in the consumer goods business - whose products include Aquafresh toothpaste and Lucozade - and over pharmaceuticals sales in continental Europe. There was also a setback to the company's HIV research, with the abandonment of one new drug after safety trials in humans, but Dr Garnier remained upbeat about the drug pipeline he will unveil at an R&D Day in December. "We have 125 products in the clinic, so there have not been too many deaths in the family," he said. Mr Garnier is expected to agree to a reduction of his contractual notice period from two years to one when a Deloitte & Touche report into GSK's remuneration policy is completed later this year. But he said yesterday that his pay and conditions - and those of other executives - will be addressed in the round rather than "one slice at a time".