DRUGS company GlaxoSmithKline said it had lost more than £1bn to rival copies of two anti-depressants as it posted a ten per cent fall in third quarter profits to £1.5bn.

Glaxo, which employs more than 1,000 people at its factory in Barnard Castle, County Durham, said generic versions of Wellbutrin SR and Paxil IR had cost it more than £1.2bn in lost sales in the first nine months of its financial year.

The group said total sales of Wellbutrin products fell 30 per cent to £173m, which was partially offset by an exceptionally strong performance by Wellbutrin XL, while sales of Paxil dropped 51 per cent to £246m.

However, chief executive Jean-Pierre Garnier said the quarterly results, which showed total turnover flat at just over £5bn, confirmed the group's success in absorbing the significant impact of the generic competition to the two drugs.

He said that GSK's broad portfolio of 14 products was continuing to drive performance, with sales of more than £100m in the quarter.

He said: "As the impact from Paxil generics now diminishes, we look forward to improved earnings growth in the fourth quarter and in 2005."

Glaxo said the strong performance of key product growth drivers, including diabetes drug Avandia and asthma treatment Advair, were helping to keep overall sales level.

Seretide/Advair is now the world's fifth largest-selling pharmaceutical product, with sales up 20 per cent to £609m.

Several key product launches expected in the next six months include Vesicare, for over-active bladders, Avan-daryl, for type-two diabetes, and Requip, for restless leg syndrome. Mr Garnier said the company was also continuing to make progress with its pipeline of potential new medicines, which will fuel the company's performance during the years to come.

"A wave of other exciting compounds for diseases such as pain, HIV and blood disorders are making good progress,'' Mr Garnier said.