A shake-up of the US prescription system boosted AstraZeneca sales

Glaxo, Europe's biggest drugsmaker, said profits rose 27% to �2.17bn ($3.9bn).

AstraZeneca's profits rose 38% to $2.04bn (�1.2bn).

Strong demand for key brands, such as anti-depressant Paxil and asthma treatment Seretide, sent Glaxo's sales surging 15% to �5.81bn.

Earlier on Thursday, Astra agreed to pay $200m to American group Abraxis BioScience to get the right to jointly promote its Abraxane cancer therapy.

In addition, Astra also agreed to sell its US anaesthetics unit to Abraxis BioScience for $350m.

Ahead of schedule

GlaxoSmithKline also gave an upbeat assessment of earnings for the rest of the year.

It reiterated that it expected earnings growth of about 10% in 2006, and chief executive Jean-Pierre Garnier added that the firm might beat this target.

"Clearly, we are ahead of our own plans," he said.

In addition to strong sales of Glaxo's key drug brands, the company also revealed that sales of a treatment against a possible flu pandemic had surged.

Its anti-viral drug Relenza saw sales of �7m over the three-month period, against sales of �5m for the whole of last year.

The Relenza spray is taken by those suffering from flu symptoms and can give people a greater chance of survival, although it cannot prevent the illness.

Confidence

AstraZeneca's results were helped by an expansion of the US Medicare system to include partial payment for prescription drugs for the elderly.

Overall, the firm's sales jumped 8% to $6.18bn, with breast cancer drug Arimidex, schizophrenia treatment Seroquel and cholesterol fighter Crestor seeing rapid growth.

Looking ahead, the firm was confident that cost cuts and the strong momentum it has already built up in sales would continue for the rest of the year.

"This outcome gives us confidence for the remainder of the year, and we have increased our targets," chief executive David Brennan said.

He added that it would continue to keep an eye out for deals that would strengthen the business following its deal with Abraxis.