THE head of GlaxoSmithKline yesterday warned the City that analysts were gravely underestimating the revenues from a new vaccine that will immunise women against more than 70 per cent of all known cervical cancers.

JP Garnier, the chief executive of Europe’s biggest drugs company, said that revenue expectations for Cervarix, which is undergoing final clinical trials in thousands of women, were “too low”.

City analysts believe that the vaccine, which has proved so effective in trials that the company has brought forward plans to file for regulatory approval by two years, could generate sales of about $1 billion a year.

However, Dr Garnier insisted yesterday that forecasters were being overly cautious in their projections. “People are using the wrong model. This is not a just a vaccine for young girls — there will be huge pent-up demand of a completely different dimension to that of a typical vaccine coming to the market.”

Dr Garnier declined to give his own estimates, although it has been suggested from within the company that sales of the vaccine, which could start by 2007, could comfortably top $2 billion a year.

Dr Garnier was in ebullient mood as he shrugged off a challenging year in which GSK lost more than £1.5 billion in sales to companies churning out low-cost versions of Wellbutrin and Paxil, once its top-selling medicines. The French chief emphasised the quality of the company’s pipeline, highlighting 13 compounds in late-stage clinical trials and a further 45 in “proof of concept” tests — more than 2.5 times the number in the pipeline in 2001.

Dr Garnier accepted that the climate was tough, hinting that the company’s huge sales force could bear the brunt of future job cuts. He said the number of reps promoting rival medicines was fast reaching unsustainable levels: “We do not need those large sales forces to do the job . . . If we had the opportunity, we would like to shuffle the resources into R&D.”

Reflecting the mounting tide of litigation in America, the company said that it would add £141 million to provisions against liability claims. The cushion now stands at over £1 billion.

Total sales edged 1 per cent higher on a current exchange rate basis to £20.36 billion while pre-tax profits rose 2 per cent to £6.1 billion. Dr Garnier dismissed suggestions that the company might look at buying AstraZeneca, saying that guidance of high single-digit earnings per share growth for 2005 had been made without thought to a significant transaction. The shares closed 2p higher at £12.36.

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