Glaxo ‘Close to Development of Bird Flu Vaccine’ Drugs Giant Reports Profits Up 20-Per Cent Thanks to Advair Sales

By MARK SMITH

GLAXOSMITHKLINE, the biggest drugmaker in Europe, yesterday said its third-quarter profit rose 20-per cent on sales of its asthma drug Advair, and added it was close to developing a vaccine against H5N1 bird flu in humans in the event of a global pandemic.

Glaxo also said it will start tests on humans within weeks for its prototype pandemic vaccine, which uses the H5N1 bird flu strain spreading from Asia to Europe, and will file for regulatory approval immediately if the trials are successful.

The London-based company, which controls about 23-per cent of the global vaccines market and is Europe’s biggest pharmaceutical company, is focusing on launching five new vaccines, including Cervarix for cervical cancer, in as many years.

It added that it was ramping up production of its anti-flu drug Relenza, which is similar to the Tamiflu treatment of Swiss rival Roche, and has decided to allow other pharmaceutical companies to make it for free.

Glaxo posted a pre-tax profit of GBP1.8bn for the three months to the end of September, compared with GBP1.5bn during the same period of last year.

Turnover climbed to GBP5.5bn compared with GBP4.9bn last time, as the firm reported strong sales growth across all regions and key drugs.

Jean-Pierre Garnier, Glaxo’s chief executive, said the company had found a way of using an adjuvant, or additive, to expand the amount of vaccine from a given batch of antigen.

“We’ve been at it for several years now, and this gives us good hope for the last bit that remains to be done to come up with a ‘shotgun’ vaccine on H5N1, ” he said.

Glaxo. which is also expanding flu vaccine factory capacity, will start clinical tests of its prototype H5N1 vaccine within weeks, and expects to have results available in the second quarter of next year, allowing it to file for regulatory approval later in 2006.

“Once the vaccine is approved we will be able to produce very large quantities, ” Garnier said.

Glaxo is also working on a second-generation additive that should require even less antigen.

“To be successful, you need a prototype of a vaccine that is effective and also requires a very small quantity of product, otherwise you are not going to be able to mass-produce it, ” Garnier said.

No-one knows how well such prototype vaccines, based on the current H5N1 strain, will match a future pandemic strain, but some scientists believe they might “prime” a person’s immune system so they get stronger effects from a later, bettermatched vaccine.

That later vaccine cannot be made until the precise strain of pandemic flu is established.

The normal seasonal flu vaccine provides no protection.

So far, the H5N1 strain has infected more than 120 people in Asia, and has killed more than half of them, triggering fears the virus will eventually mutate to become a deadly pandemic.

Shares in Glaxo climbed 3-per cent or 42p, to close at 1437p yesterday.

Separately, shares in AstraZeneca, the UK’s other big pharma giant, fell 3.4-per cent, or 89p, to 2500p.

Although sales climbed 9-per cent to dollars-5.8bn and operating profit rose by nearly 50-per cent to dollars-1.7bn, Europe’s third- largest drug maker’s weak late-stage pipeline yesterday crimped enthusiasm for the shares.

By contrast, City investors recognised yesterday that Glaxo is now looking ahead to a rich pipeline of new products that reach market within a couple of years.

AstraZeneca also reported a 19-per cent increase in quarterly pre- profits to dollars-1.7bn on the back of impressive sales and cost- cutting measures. It said sales of its top five medicines, including its fatbusting drug Crestor, ulcer treatment Nexium and Seroquel for schizophrenia, rose 25-per cent on a year earlier in the period between July and September.

Jon Symonds, AstraZeneca’s chief financial officer, yesterday said: “A strong top line, coupled with strong management and continuing productivity gains and sensible cost management, has contributed to a very strong bottom line.”

GLAXOSMITHKLINE

2005 2004

TURNOVER GBP5.5bn GBP4.9bn

PRE-TAX PROFIT GBP1.8bn GBP1.5bn

DIVIDEND 10p 10p

Third-quarter figures

ASTRAZENECA 2005 2004

TURNOVER dollars-5.8bn dollars-5.2bn

PRE-TAX PROFIT dollars-1.7bn dollars-1.4bn

DIVIDEND n/a n/a

Third-quarter figures