GSK plans £4bn share buyback

DRUGS giant GlaxoSmith-Kline accompanied robust third-quarter results with a confident full-year outlook and plans to buy back as much as £4bn of its shares.

The group has delivered 'sustained growth across all regions', said chief executive Jean-Pierre Garnier, and is on course to meet its earnings growth target of 13% for the full year, and in the 'midteens' for 2002.

Profits for the three months to 30 September jumped by 17% to £1.35bn pre-tax, on turnover ahead by 13% at just short of £5bn. This takes the group's nine-month profit total to £4.44bn, up 17%, and sales to £14.87bn, up 14%. Earnings rose by 20% for the three and nine month periods, at 15.8p and 52p a share respectively.

Garnier said he was particularly pleased with the performance of new products, where sales surged by 59% to more than £1bn and now represent just under a quarter of total turnover.

There was a particularly strong performance from Seretide/Advair, the group's new asthma treatment, where sales reached £240m . With more than two million prescriptions written since its US launch in April, it has become the most successfully launched asthma treatment in the past decade.

Created through the merger of Glaxo Wellcome and Smith-Kline Beecham last year, GSK is Europe's largest pharmaceuticals manufacturer. Analysts said the robust performance demonstrates the resilience of the drugs sector in times of recession, although there had been a dip in business in the immediate aftermath of the terrorist attacks in the US.

'It is early days. We have seen a slowdown just following 11 September in the US - in other words, people were extremely shocked and stayed away from visiting their physicians,' he said.

Things are now returning to normal and Garnier denied anecdotal reports of a boom in anti-depressant sales across the Atlantic in response to the atrocities and ongoing anthrax scares: ''here is no sign of every American consumer rushing to get a prescription of Paxil,' he said.

Seroxat/Paxil, the group's anti-depressant treatment produced sales in line with last year, at £439m. A 10% fall in the US, caused by wholesaler buying patterns, was offset by strong growth in Europe and the rest of the world.

Another strong performer was GSK's diabetes drug, Avandia, where sales surged 94% for the quarter, to £226m. Sales of its former blockbuster drug, Zantac, continued their decline.