GlaxoSmithKline has increased its predicted earnings for 2003 despite a virtually unchanged turnover in the second quarter.

The company saw its pharmaceutical sales grow by just 3%, but strong savings, arising from what it called "tight management" of costs means share earnings have exceeded expectations with 12% growth

Profits before tax increased by 15% to £1.9 billion, while sales growth was led by asthma treatment Seretide, overtaking Seroxat/Paxil as the company's best-selling product,

with sales of £531 million in the quarter compared to the antidepressant's £520 million.

Chief Executive Jean-Pierre Garnier said: n the back of this excellent performance we are upgrading our earnings guidance. We now expect earnings per share growth of high single digits or better in 2003, regardless of possible generic competition to Paxil in the USA.

US sales of the anti-depressant fell by 4% in the quarter after higher-than-normal wholesaler inventories of the drug in the first quarter of the year.

The company has not disclosed when it expects to face generic competition for the drug, although this could come as early as September, depending on the outcome of ongoing litigation.

GSK said it remains on track to launch two key products into the US market in the second half of the year - Levitra, for erectile dysfunction, and Wellbutrin XL, an extended release version of its depression drug.

pharmafocus@pharmafile.co.uk