Glaxo hopes of new-drugs booster

GLAXOSMITHKLINE has as many as 20 blockbuster $1bn drugs on its books and expects to make a record number of regulatory filings over the next five years to replenish its dwindling product pipeline.

The Anglo-American drugs giant came out fighting at a crucial City presentation today and told analysts it has more than enough treatments to take over from its existing products and drive future sales.

It plans a major push into the lucrative markets for cancer and cardiovascular disease, two areas where it has traditionally been weak, and will seek regulatory approval for three new vaccines in 2004.

Chief executive Jean-Pierre Garnier said new drugs in late-stage testing had almost doubled to 44 in the past two years and added that his scientists were working on a total of 147 projects.

'It is only three years ago that we decided to embark on a difficult journey to tackle the number one challenge facing the pharmaceutical industry which is declining R&D productivity,' he said.

'Success is with us and we are very reassured by the enormous progress we have made over a fairly short period of time. We are on our way to building an extremely exciting pipeline of new drugs and new vaccines.'

Glaxo has faced increasing competition from cut-price generic producers challenging patents protecting its current star products. It lost an attempt to reinstate patents on its antibiotic Augmentin only last week.

Garnier said 20 of Glaxo's new drugs had the potential to reach blockbuster status - $1bn a year of peak sales - led by a cancer treatment the group hopes will stabilise the disease for many patients.

The once-daily drug, codenamed 572016, has already shown promise against breast, non-small-cell lung cancer, bladder, head-and-neck and gastric cancer in Phase I and Phase II clinical tests, although regulatory filing will be in 2005, several months later than expected.

Glaxo is also developing a cholesterol-lowering treatment, that seeks to reduce the inflammation of arterial walls.

Analysts fear that earnings will fall over 2004 and 2005 as generic drugs hit sales before the group has the time to plug the gap. Only asthma treatment Seratide and diabetes drug Avandia currently have blockbuster status.

Traders said today's update seemed 'pretty positive' but Glaxo shares slid 19p to 1311p.