The Wall Street Journal - February 23, 2001
Gautam Naik, Staff Reporter of The Wall Street Journal

LONDON -- GlaxoSmithKline PLC, the world's largest maker of anti-AIDS drugs, said it plans to test a novel AIDS vaccine on humans later this year after it showed promising results in tests on laboratory monkeys.

The British drug giant said that tests on monkeys demonstrated that the vaccine offered protection lasting more than a year. The company expects to start human Phase 1 clinical trials of the vaccine for use as a prophylactic, or preventive drug, in the fourth quarter. It expects to test the vaccine as a therapeutic drug -- a treatment -- early next year.

"We have good results" for the vaccine so far, said Jean-Pierre Garnier, chief executive officer of GlaxoSmithKline, at a London news conference Thursday, where he outlined the company's long-term strategy. GlaxoSmithKline, which has about 40% of the global share of anti-AIDS drugs, said it could potentially combine the vaccine with a cocktail of AIDS therapies it currently markets.

The race to develop an effective AIDS vaccine is intensifying. Merck & Co. of the U.S. has started small human trials of a new experimental HIV vaccine that sparked hope among AIDS scientists. At least half a dozen companies are testing or have tested vaccines in people, including VaxGen Inc., Aventis SA and Chiron Corp.

While GlaxoSmithKline's anti-AIDS vaccine is still some way off, investors have been hungrier for news of Glaxo's immediate prospects. The company said it expects to derive 1.6 billion pounds ($2.31 billion or 2.56 billion euros) in cost savings by 2003 from the December merger of Glaxo Wellcome and SmithKline Beecham. The company also expects 13% earnings-per-share growth this year and earnings growth in the "mid-teens" by 2002.

Thursday, the company told analysts that Glaxo Wellcome and SmithKline Beecham's 15 separate sales forces in the U.S. had been unified, and that the entities' European operations would be entirely merged by the end of the first quarter. GlaxoSmithKline has embarked on a plan to increase productivity by splitting research and development into competing divisions.

The company disclosed that its drug pipeline includes 44 new drugs in development, as well as 20 vaccines. "It's kicked off to a good start," said Mark J. Tracey, analyst at Goldman Sachs & Co. in London. "I'm pleased with the depth of the drug pipeline."

Mr. Garnier also said he is eager to consider deals to co-market drugs already developed by other pharmaceutical companies, provided the price was right.

Write to Gautam Naik at gautam.naik@wsj.com

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