GLAXO REAFFIRMS COMMITMENT TO R&D

At Glaxo's first presentation to the financial community on strategies and research and development since December 1991, its chief executive Richard Sykes and other executives reaffirmed the company's commitment to investing in research and development and defended, at a time when many firms are cutting back, its R&D spending.

Dr Sykes also played down fears that the imminent threat of generic competition in the H2 antagonist market could severely damage Glaxo's mainstay product, Zantac (ranitidine), which made up over 40% of Glaxo's total sales in the last fiscal year. In Europe, Zantac continues to grow despite the patent for cimetidine having already expired in a number of countries, and line extensions and new indications will provide further growth opportunity.

Dr Sykes presented a picture of Glaxo as one of the strongest companies in the sector, both financially and in terms of its development pipeline, according to analysts Paul Krikler and Mark Tracey at Goldman Sachs, who note that to a certain extent this view is justified; Glaxo's pipeline is virtually free of "me-too" products, most being truly innovative and seeking to cater for unmet needs. Nevertheless, the analysts did not feel that the presentation contained anything to cause them to change their forecasts for the coming years - they rate Glaxo as a market performer near term and a market underperformer in the longer term.