Blockbuster drug hopes hike Glaxo

SHARES in drugs giant GlaxoSmithKline have rocketed to a 15-month high as the City began to re-assess the potential of a revolutionary new drug for cervical cancer.

This news along with some much-needed glad tidings for rival AstraZeneca led to a massive £3.3bn being added to the value of UK pharmaceuticals stocks.

AZ climbed 79p to £21.52 while GSK rose 36p to £13.18.

Heavyweight broker Credit Suisse First Boston lit the fuse under GSK when it calculated that cervical cancer vaccine Cervarix could rake in £2.1bn a year of revenues - putting it among the world's biggest blockbusters. Previously it was thought that the treatment would struggle to make £520m.

GSK bosses, led by chief executive Jean-Pierre Garnier, will no doubt be privately delighted with the research as they have long believed that analysts have radically underestimated the earning power of Cervarix.

Some experts reckon that as many as 300m women could be treated with the vaccine. In monetary terms that translates to a worldwide market worth £4.2bn annually.

While GSK is in a race with US rival Merck to get a vaccine to market, the pair have no other competitors. The jab works against the human papilloma virus which is responsible for nearly all cases of the killer disease. Injections could be given to girls before they are sexually active, meaning that cervical cancer could be virtually eradicated.

AstraZeneca was given a surprise boost when American regulator, the Food & Drug Administration, said its cholesterol-lowering pill Crestor was no more dangerous than existing medicines. AZ will be hoping the all-clear will counter claims by one of its own employees that the drug was so dangerous that it should be used only as a drug of last resort.

The FDA did, however, revise Crestor's label to 're-emphasise' existing recommendations and restrictions.