SmithKline pick-me-up fEor City

SMITHKLINE BeecTHER write errorham's drug sales in Italy fell 64 per cent in the first quarter as health authorities cracked down on the cost of pharmaceutical products, writes Russell Hotten.

But SmithKline reported better results than expected, with taxable profits up 15 per cent to pounds 353m in the three months to 31 March.

One analyst said: 'These are good numbers - top end of the range, very pleasing.' The City had been expecting pounds 340m- pounds 350m. The shares rose 8p to 372p.

In Italy, several drugs have been delisted, although sales of new products continued to grow. Excluding Italy, worldwide sales improved 5 per cent on last year's strong first-quarter rise of 15 per cent. The results were also affected by fewer antibiotic sales, reflecting less severe outbreaks of influenza in 1994.

Robert Bauman, chief executive, said: 'We are on target to meet our objectives for 1994.'

Sales of Tagamet, the ulcer drug which loses its US patent on 17 May, were down 3 per cent at pounds 153m. Drugs sales were strongest in the US where volume rose 11 per cent, while prices fell 1 per cent.

German sales fell 6 per cent, while France and the UK saw sales slide by 20 and 2 per cent respectively.

In Japan, sales were down 5 per cent, with a solid gain in Kytril sales offset by a decline in Tagamet.