Asthma drug drives GSK growth

LONDON, England (CNN) -- GlaxoSmithKline, Europe's biggest drug maker, said first-quarter profit rose almost 49 percent on soaring demand for asthma drug Advair in the United States.

Net income in the first three months to March 31 rose to £1 billion ($1.4 billion) from £687 million, while sales rose more than 7 percent to £5.1 billion.

Earnings per share (EPS) rose 17 percent to 19 pence. Analysts polled by Reuters had expected EPS of 18.8p.

Its newest drug, Advair, which has been on sales in the U.S. for the last 12 months, has sold £699 million globally -- ranking it as the company's third biggest drug.

GSK, formed by the merger of Glaxo Wellcome and SmithKline Beecham in December 2000, reaffirmed its commitment to deliver earnings per share growth in the "mid-teens in 2002 and low-teens or better in 2003."

But warned growth would depend on it successfully defending its patents on antibiotic Augmentin and antidepressant Paxil. Like its rivals, GSK is vigorously defending its grip on the patents as generic producers attempt to break its stranglehold.

Its stock, which has fallen about 10 percent in the last 12 months, rose 2.4 percent to 1,679 pence after its delivered earnings that beat expectations. The stocks decline over the last year has come about amid concerns it may not be able to fill a looming gap in new products beyond 2003.

"These results continue to demonstrate the breath and strength of GSK's portfolio of products, and provide a strong platform to build on for the rest of the year," said Chief Executive Jean-Pierre Garnier.

"At the same time, we have continued to bolster our pipeline by in-licensing two more highly promising compounds."

London-based GSK has spent the last 12 month securing the right to a number of promising drugs, including Bayer's impotence Vardenafil. The company said it has 118 projects in clinical development.

While GSK is confident it can defend its patents and replace it drugs cabinet with new products, but speculation has increased recently that it may buy U.S. rival Bristol-Myers Squibb to kick-start earnings and avoid a slowdown after 2003.

Earnings, before merger and restructuring costs, for the three months to March 31 rose to £1.13 billion compared with £1.01 billion in the year ago period.