Tagamet sales remain firm as rivals delayed

THE decline in sales of Tagamet, SmithKline Beecham's best-selling ulcer drug, has been lower than expected following the expiry in May of its US patent, writes Gail Counsell.

Tagamet sales in the US dropped 9 per cent in the second quarter of this year, half the expected fall.

Analysts attributed the relatively small decline to delays in sales of generic competitors.

Second-quarter figures from SmithKline show that group sales from continuing operations in the three months to 30 June rose 8 per cent to pounds 1.6bn. Pre-tax profits fell slightly to pounds 291m ( pounds 294m). Excluding last year's pounds 37m exceptional credit from disposals of personal care businesses and associated operating profits, they rose 21 per cent. After stripping out favourable currency effects, the increase was only 6 per cent.

Pharmaceuticals sales in the quarter were up 9 per cent at comparable exchange rates to pounds 909m, spurred by new products in key markets and a 2 per cent contribution from newly acquired Diversified, the US pharmaceutical benefit manager bought by SmithKline. Trading profits of pounds 219m rose 8 per cent.

The six-month figures saw sales from continuing operations up 4 per cent at pounds 3bn and trading profits up 20 per cent at pounds 648m. At comparable exchange rates they rose 5 and 6 per cent respectively.

The 'A' shares rose 8p to 402p.

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