IT may have been a year in coming, but GlaxoSmithKline, the group created by the merger of pharmaceutical giants Glaxo Wellcome and SmithKline Beecham, got off to an inauspicious start on the London Stock Exchange yesterday.

The merger of the two firms creates Britain's third largest company, after Vodafone and BP Amoco, with a market value of around £114bn and sales of about £15bn.

Completion of the deal has come almost a year after the pair agreed to merge.

In London, shares began trading at £18.48 in the morning, with dealing in New York starting yesterday afternoon.

But on this side of the Atlantic, the shares quickly fell in morning trading, dropping nearly two per cent, although they later recovered some ground.

The fall was being blamed by the City on worries about a lack of new drugs in the pipeline, after several drug failures, and the enforced sale of other drugs to meet competition concerns.

Last month Glaxo withdrew its Lotronex irritable bowel syndrome drug from the US market and has been forced to delay the introduction of a new diabetes drug.

SmithKline in turn failed to win approval for its antibiotic Factive and also recently delayed a heart drug and a medicine for smoker's cough.

Chris Paul, pharmaceuticals analyst at stockbroker Brewin Dolphin, said the company needed to find a new blockbuster drug - one that brings in 1bn US dollars a year (£667m) sales - fast.

"At the moment the cupboard is remarkably bare. It is all very well having the world's largest pharmaceutical salesforce, but you have got to have some drugs out there to sell," he said.

If it failed to come up with the goods, the company could be forced to cut its workforce to reduce costs, he forecast.

GlaxoSmithKline has refused to be drawn on fears that between 2,000 and 5,000 jobs from the 23,000 staff employed in the UK could be lost as a result of the merger.

The combined company employs 100,000 staff worldwide and it is feared there could be as many as 15,000 job cuts in total.

A spokesman said it was "inevitable" there would be "one or two" redundancies when two companies of this size merged, but any job cuts would take place over the next couple of years.

The group has already announced it is closing seven offices around the country as it transfers staff to three UK bases. They include SmithKline House - famous for the lit-up Lucozade bottle on the outside - off the M4.

Originally, the tie-up was expected to be finished in the summer, but delays in approval from the US Federal Trade Commission saw the date move to the year end.

The FTC had been concerned about the combined group's hold on the US market for anti-smoking products - including Glaxo's Zyban product and SmithKline's Nicorette and Nicoderm products.

But the merger received clearance from the FTC earlier this month.

The tie-up got the green light from the European Commission in May and was given shareholder approval in August. Sir Richard Sykes, chairman of the enlarged group, said the new company would have an R&D budget of £2.3bn a year.

He added: "GlaxoSmithKline will have a powerful research and development capability encompassing the application of leading edge technologies."

The corporate headquarters will be at Brentford, with its US operation in Philadelphia and North Carolina.

l GlaxoSmithkline shares closed up 29p at £18.7