SB and Glaxo shares fall 5%

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The Independent Online

Shares in SmithKline Beecham and Glaxo Wellcome, the merging drugs companies, fell 5 per cent yesterday after they disclosed delays to drug launches and mixed financial results, and a consumer group questioned the safety of Glaxo's irritable bowel syndrome drug.

Shares in SmithKline Beecham and Glaxo Wellcome, the merging drugs companies, fell 5 per cent yesterday after they disclosed delays to drug launches and mixed financial results, and a consumer group questioned the safety of Glaxo's irritable bowel syndrome drug.

SB said Ariflo, a respiratory treatment, needed further trials that could take up to a year, while Glaxo said the US launch of Advair, the asthma drug, had been shunted into 2001.

Glaxo also confirmed it was in talks with the US Food and Drug Administration over labelling on Lotronex, its irritable bowel treatment, after a US consumer group said its side effects could lead to major complications. Glaxo said it was aware that four deaths had been reported of people taking the medication, but denied any causal link. The company said Lotronex had won approval as its efficacy was deemed to outweigh any risks.

SB shares fell 43p to 890p while Glaxo was down 84p at 1,984p. The downward pressure was compounded by flat third-quarter consumer healthcare sales from SB. The wet British summer hit sales of Ribena, while competition in the stop-smoking market saw sales of Nicorette gum reverse. Oral care sales suffered amid tough competition. Jean-Pierre Garnier, SB's chief executive, said market share was falling only in smoking-cessation. He said SB had no intention of divesting Nicorette. Competition concerns about the companies' stop-smoking franchises have delayed the companies' merger to the year-end.

In pharmaceuticals, SB warned that Paxil, the antidepressant, was facing a challenge to its patent. Strong Paxil sales helped underlying US drug sales climb 20 per cent.

Glaxo reported nine-month sales up 12 per cent at £6.86bn. In the same period, sales in SB's ongoing businesses rose 12 per cent to £6.2bn.

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