PHARMACEUTICALS company GlaxoSmithKline has seen "spectacular" sales of new products in the US help second-quarter profits leap by nine per cent.

The profits jump comes as the group, which employs more than 1,500 staff at its Barnard Castle site is set to axe about 400 jobs from the County Durham operation.

Sales on the other side of the Atlantic were boosted with GSK's asthma drug, Advair, taking £71m in its first 12 weeks on the US market.

The group's diabetes treatment, Avandia, also saw strong growth, with sales up 72 per cent in the three months to June 30 on the same period last year.

GSK's total US pharmaceutical sales rose 20 per cent to £2.3bn in the second quarter, pushing group turnover to £5.1bn, a jump of ten per cent.

Pre-tax profit rose to £1.7bn before exceptional costs, compared with £1.5bn in the same period last year.

Chief executive Jean-Pierre Garnier said: "We have had a very solid quarter and our new product performance has been driving growth.

"In just 12 weeks Advair has taken a 12 per cent share of the new prescriptions market. There has not been a better take-up for an asthma drug in around 20 years."

Mr Garnier said a deal announced with Japanese pharmaceutical group Shionogi would help guarantee a flow of new products on to the marketplace.

The two firms have created a joint venture in the US and Europe which will initially develop five drugs, four from Shionogi, including one targeting HIV.

Mr Garnier said: "This is an exciting development. We have the preferred rights for further products coming out of the pipeline, so we are having a real celebration.

"This is an agreement a lot of other companies were hoping to strike, so we are happy to come out ahead."

GSK was formed by the merger of Glaxo Wellcome and SmithKline Beecham last year, and is the world's second biggest drugs company.

Competition authorities required the combined group to wash their hands of a number of drugs before the merger could be completed, including herpes treatment Famvir and Vectavir and anti-nausea drug Kytril.

Mr Garnier said the group now expects savings from the integration of the two businesses to hit £1.2bn annually by 2003, compared with an earlier forecast of £1bn.

The increased saving is down to manufacturing cuts and a higher level of redundancies. GSK said the redundancies equated to a "very small percentage" of its 110,000 worldwide workforce.

Mr Garnier admitted the group's consumer healthcare arm, the home of Ribena, Aquafresh toothpaste and Day Nurse, did not perform well during the quarter.

Sales fell two per cent to £656m at constant exchange rates if the acquisition of Block Drug, makers of Sensodyne toothpaste, was excluded.

Block Drug added £146m to sales, taking overall turnover at the arm up by 19 per cent.

Costs resulting from the merger and integration of the two groups contributed to exceptionals of £253m in the three-month period.

Bottom-line second quarter profit was £1.4bn up from £1.3bn. Over the first six months of the year, GSK made a pre-tax profit of £2.5bn, against £2.4bn at the same time last year.