Glaxo SmithKline, Britain’s largest drug company, is planning clinical trials of a human vaccine against avian flu before Christmas. Results of the trials on a vaccine against the killer H5N1 strain, which has killed 60 people in Asia so far, would be available by the middle of 2006. Should the tests be successful Glaxo would obviously file for regulatory approval to market the vaccine.

The British company is using a technique which requires only a very small amount of vaccine, important given the anticipated shortage of supplies if a pandemic is ever declared. However, no-one can be sure how well such a prototype would cope with the evolving live strain, but it is hoped that the prototype could "prime" a human immune system to give a stronger response to a later, and better-matched vaccine.

Glaxo recently invested more than £1 billion in expanding capacity to manufacture vaccine. If the World Health Organisation is ever forced to declare a bird flu pandemic Glaxo scientists believe it would take possibly a month to synthesise the strain of virus from which a vaccine could be developed. Getting vaccine into a publicly available form would take potentially another three or four months.

For a concerned public that all looks a little time consuming. But in the meantime Glaxo SmithKline is offering free licences to partners able to manufacture its flu drug Relenza, one of only two medicines recommended by health experts for potential use in bird flu pandemic.

Relenza, like Tamiflu, could be used as a treatment for bird flu but suffers the disadvantage that it has to be inhaled, unlike Tamiflu, which can be taken in tablet form. The licence to make Tamiflu is held by Roche, the Swiss giant. Neither Relenza nor Tamiflu acts as a vaccine against avian flu, but either drug could reduce the severity of symptoms.

Jean-Pierre Garnier, chief executive of Glaxo, hopes that by finding skilled partners to make Relenza the price could be discounted substantially. In a conference call, he refused to be drawn on a price estimate, although he did say Glaxo researchers were looking for more convenient ways of administering Relenza. He believes it will take six months to stockpile “substantial” quantities of Relenza.

Glaxo also pleased the market with third quarter results and increased profits guidance for the full year. Third quarter pre-tax profit rose from £1.45 billion to £5.47 billion, taking earnings per share up from 17.7p to 21.3p. The third interim dividend was left unchanged at 10p a share.

The company expects the strength to persist in the fourth quarter and believes that percentage earnings per share growth for the full year will be “in the mid-teens”, a big improvement on previous guidance of growth “towards the upper end of single digits” and possibly above the 14 per cent shown so far this year.

• While Glaxo was enjoying the stockmarket’s attention AstraZeneca, Britain’s other big drugs’ major, suffered the comparison. Results from Astra were in line with market forecasts and its earnings guidance pointed to growth “around the double digit mark” but the market was in a sell Astra buy Glaxo mood.

  Third quarter pre-tax profits rose from $1.42 billion to $1.74 billion on sales up from $5.265 to $5.789 billion.

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