Strategy for Growth Unveiled

GlaxoSmithKline PLC
22 February 2001
                                        
GlaxoSmithKline Unveils Strategy for Growth
-------------------------------------------
Company to Leverage Key New Products, Expand on Therapeutic
Franchises, Enhance R&D Productivity, and Capture Merger
Synergies to Deliver Strong Performance

Highlights
----------
*    Despite the 6% adverse impact of product divestments -
     Kytril and Famvir - GSK forecasts 2001 earnings per share
     (EPS) growth of around 13%

*    2002 EPS growth expected to accelerate to mid-teens

*    161 New Chemical Entities, vaccines and line extensions
     in development; 117 of these in clinical studies

*    Seretide/Advair (US launch planned for April) and Avandia
     identified as key drivers of growth

*    Key therapeutic franchises supported by a large number of
     line extensions, including: Augmentin ES approvable in the US;
     Augmentin SR filed; further development of Seroxat/Paxil in
     PMDD; Paxil/Seroxat to be launched for GAD and PTSD in 2001;
     Coreg to be submitted for severe heart failure; 908 Agenerase
     pro-drug to be filed in 2002

*    Record number of 9 in-licensed products during the last
     twelve months - all in clinical development

*    Full pipeline of 23 innovative vaccines; 5 to be launched
     in 2001

*    New plans outlined to boost R&D productivity

*    Cost savings of at least £1.6 billion from merger and
     manufacturing plans confirmed

At its inaugural meeting for analysts and investors,
GlaxoSmithKline plc (GSK) today outlined its R&D and business
strategies for the new company.

Dr Jean-Pierre Garnier, Chief Executive Officer, said: 'Today
we have provided compelling evidence that the promise of the
merger will be fulfilled. GSK is well positioned to
successfully address the key challenges confronting
pharmaceutical companies. We are determined to enhance R&D
productivity, build a rich pipeline and reduce our costs. We
believe GSK has what it takes to achieve financial growth and
become an even stronger force in the industry.'

Dr Tachi Yamada, Chairman, Research and Development, added:
'In GSK we have brought together two complementary R&D
portfolios to create one of the most exciting and innovative
early stage pipelines in our industry. GSK has the skills and
resources to harness the potential of the human genome,
building on our previous investments in integrated technology
platforms. In addition, we are announcing today a radical
restructuring of our R&D organisation, which will take
advantage of scale, while promoting focus and
entrepreneurialism.

Financial Outlook
-----------------
While improving pharmaceuticals sales growth is a key driver
of GSK's current strong business performance, the company will
also benefit from the delivery of at least £1.6 billion in
cost savings by 2003 as a result of both the merger and the
manufacturing plans already in place prior to the merger.

These benefits of the merger and the performance of the
business have led the company to forecast EPS growth
(excluding merger and restructuring costs and the effects of
currency) for 2001 of around 13%, despite the adverse effect
of product divestments and reduced dependency on profits from
disposals of investments.  Importantly, the divestments
required by regulatory bodies in order to complete the merger
have had the effect of reducing the company's EPS expectation
for the year by 6%. Additionally John Coombe, Chief Financial
Officer, indicated he expects a trading margin improvement of up
to 2% in 2001 as well as an improvement in the tax rate of 0.5%.

In 2002, the company expects EPS growth to accelerate to the
mid-teens, reflecting strong business performance, boosted by
cost savings.  For the second year in a row, one-time gains
are expected to decline.

John Coombe said: 'While we continue to focus on delivering a
successful merger, the company has negligible net debt
relative to its market capitalisation, and its financial
strength positions it to take advantage of any opportunities
that might arise to build the business.'

Strategies for Growth
---------------------
Dr Garnier indicated that GlaxoSmithKline's strategy for
growth is based on fully supporting new and existing products,
strengthening the product pipeline, boosting the company's
output of new products and achieving cost savings from the
merger.

Rolling Out Key New Products
----------------------------
Dr James Palmer, Senior Vice President, New Product
Development, told analysts: 'GSK will sustain and enhance its
growth by delivering innovative products, maximising product
life cycles through line extensions and new indications, and
being a favoured partner for in-licensing of promising new
medicines.'

GSK is set to benefit from the recent launch of two potential
blockbuster drugs, a unique source of strength for the
company. Avandia, GSK's treatment for Type 2 diabetes, has
done well with total sales of £462 million in 2000.  Avandia
offers significant opportunities for growth as it continues to
be launched in Europe and the rest of the world during 2001.
Moreover, the company is pursuing an extensive clinical
programme to attempt to demonstrate Avandia's ability to
prevent disease progression and reduce complications
associated with Type 2 diabetes. In February 2001 the company
received an approvable letter from the FDA for the use of
Avandia in combination with insulin.

The company's other potential blockbuster, Seretide - the
combination of a corticosteroid and a long-acting
bronchodilator for the treatment of asthma - is planned for
launch in the US under the name Advair in April this year,
giving it access to the world's largest market where the
benefits of inhaled steroid treatment are increasingly being
recognised. In the US, Advair will have a broad label,
allowing usage in asthma patients of all types. New data from
11 key studies will help to sustain Seretide/Advair as the
gold standard therapy for asthma treatment worldwide.

Additional studies with Seretide/Advair have provided clear
evidence of its benefits in the treatment of COPD (chronic
obstructive pulmonary disease). The company's strategy for
unlocking the COPD market includes gaining COPD indications
for Seretide/Advair, and securing regulatory approval for
Ariflo, an oral anti-inflammatory treatment for COPD.
Regulatory submissions for Seretide/Advair in the treatment of
COPD are expected to be filed in the US in March, and
September in Europe.

With sales of £2.8 billion in 2000, up 15%, GlaxoSmithKline
remains the clear leader of the respiratory market.

GlaxoSmithKline's newest HIV/AIDS treatment, Trizivir,
combines the two established HIV/AIDS medicines Epivir +
Retrovir (Combivir), with the potent reverse transcriptase
inhibitor Ziagen to offer the power of a triple combination
regimen in a single tablet. Trizivir reduces the pill burden
to 1 pill twice a day, increasing patient convenience.  As a
triple regimen that does not contain a protease inhibitor,
Trizivir may also preserve future treatment options containing
those drugs.

Expanding Key Therapeutic Franchises
------------------------------------
The antibiotic Augmentin has always been associated with
superior efficacy, and current treatment guidelines include it
as one of only a short list of antibiotics recommended for
acute otitis media and sinusitis. In a continuing programme to
increase its competitive advantage, the company is planning to
launch extra-strength formulations of the product for both the
paediatric (Augmentin ES) and adult (Augmentin SR) markets to
meet the challenge of emerging bacterial resistance. This
strategic move is intended to enhance Augmentin's position as
the drug of choice in treating PRSP (penicillin resistant S.
pneumoniae). Recently the company received an approvable
letter from the FDA for the use of Augmentin ES to treat
middle ear infection in children. The file for Augmentin SR
was submitted to the FDA in December 2000.

In the CNS (Central Nervous System) category, GSK will pursue
a dual strategy to continue growing the Seroxat/Paxil
business. With its immediate release (IR) formulation, the
company will expand into new markets and will offer a complete
spectrum of treatment for depression and anxiety disorders.
This will include launches in 2001 for GAD (General Anxiety
Disorder), and PTSD (Post-Traumatic Stress Disorder). A
controlled release formulation of Paxil, Paxil CR, already
approved in the US for depression, has recently received an
approvable letter from the US FDA for panic disorder. Paxil is
also in full clinical development for PMDD (Pre-menstrual
Dysphoric Disorder). In 2000, Seroxat/Paxil became the leading
SSRI (selective seretonin reuptake inhibitor) in the US in
terms of new retail prescriptions, and achieved sales of 
£1.55 billion worldwide.

Coreg (carvedilol) is the first beta-blocking agent to be
indicated for the treatment of mild or moderate heart failure.
It is also the only beta-blocking agent to show a mortality
benefit in the treatment of severe heart failure, and a filing
for this indication is expected to be made with the US FDA
later this year.


In-Licensing Partner of Choice
------------------------------
Even in the midst of merger planning, a record nine
significant compounds have been licensed in to GSK in the past
twelve months. These are:

* Merck        SSRI/5HT1A           Depression                  Phase II
  KGaA         partial agonist                                
      
* Sepsicure    Endotoxin            Sepsis                      Phase II
               binder

* HGS          Keratinocyte GF-2    Wound care, inflammatory    Phase II
                                    bowel disease

* Taiho        RNA polymerase       Cancer                      Phase II
               inhibitor

* Tanabe       Dual Alpha 4         A novel, oral anti-         Phase II
               integrin             inflammatory with
               antagonist           potential utility in a
                                    range of disorders
                                    including asthma,
                                    rheumatoid arthritis,
                                    inflammatory bowel
                                    disease, multiple
                                    sclerosis

* NeuroSearch  5HT/NA/DA            Depression                  Phase II
               uptake
               inhibitor

* Asahi        Beta 3-adrenoceptor  Obesity/diabetes            Phase I
               agonist

* Yuhan        Reversible PPI       GERD                        Phase I
 
* Zambon       ACE/NEP              Arterial hypertension       Phase I
               inhibitor

'We're committing our considerable development capabilities
towards bringing these promising in-licensed compounds to
patients,' Dr Palmer said. 'All of these products have the
potential to contribute significantly to GSK's future growth,
benefiting from the sales and marketing strength of the new
organisation.'

Delivering Current Pipeline NCEs and Vaccines to the Marketplace
----------------------------------------------------------------
GlaxoSmithKline's investment in R&D has yielded 161 New
Chemical Entities, vaccines and line extensions in development. 
Of this total, 117 are currently in clinical development 
(ie. Phase I onwards).

Dr Allan Baxter, Senior Vice President, Drug Discovery, said:
'Far-sighted and imaginative investment in new technologies by
both Glaxo Wellcome and SmithKline Beecham has yielded a full
and innovative early stage pipeline.  This pipeline has the
potential both to reinforce our existing areas of therapeutic
leadership and to allow us to expand further into other areas
with major commercial promise, including obesity, cancer, and
cardiovascular disease.'

Among the exciting Phase I/II compounds highlighted by Dr
Baxter are:

* 223412     NK-3 receptor         The first compound in its class,
             antagonist            under development for COPD

* 181771     CCK-A receptor        Novel treatment for obesity (and
             agonist               type 2 diabetes). Works non-
                                   centrally. Decreases appetite among
                                   obese patients
* 418790     Beta 3-adrenoceptor   A non-centrally acting approach to
             agonist               treating obesity (and Type 2
                                   diabetes). Stimulates metabolism in
                                   fat cells

* 501516     PPAR agonist          Unique approach to fighting
                                   cardiovascular disease by
                                   simultaneously targeting two risk
                                   factors - low HDL (high density
                                   lipoproteins) and elevated
                                   triglicerides.  Area currently
                                   lacking effective treatment

* 408075     Maytansine            A pioneering approach targeting
             antibody              major solid tumours, primarily colon
             conjugate             cancer. Shown in animal models to
                                   reduce tumour volume below levels of
                                   measurability, without tumour
                                   regrowth

* 572016     Kinase dual           Major breakthrough in targeting two
             inhibitor             enzymes on which tumour growth
                                   depends (tyrosine kinases linked to
                                   erbB2 and EGFR)

* 273005     Vitronectin           A novel approach to the treatment of
             antagonist            osteoporosis and rheumatoid
                                   arthritis directed at prevention of
                                   bone loss

In the later stages of the development pipeline (Phase III),
Dr Palmer highlighted the progress of several compounds
nearing completion of registration:-

GW433908 is an improved formulation to deliver Agenerase, an
HIV protease inhibitor with proven safety and efficacy.
Preliminary evidence from Phase II comparative studies show
that '908 has a better GI side effect profile than Agenerase,
and will allow a significant reduction of the pill burden from
16 to 6 per day. Regulatory filings are expected in Europe and
the US in 2002.

GI198745 is a dual 5-alpha reductase inhibitor for the
treatment of BPH (benign prostatic hyperplasia) and hair loss.
The NDA submission for BPH was filed in December 2000.
Clinical trials for hair loss have shown encouraging results
for hair restoration after 6 months of treatment.

G1262570 is the first in a new class of non-glitazone PPAR
agonists that is being developed for the treatment of Type 2
diabetes.  '570 is currently in a large Phase III programme,
data from which will further specify the profile of this
product.  Two additional GSK compounds in this class are
currently in Phase I.

Factive, a broad-spectrum quinolone antibiotic, has the
potential to become the most potent product in its class for
the treatment of adult respiratory infections caused by S.
pneumoniae, a common pathogen that is becoming increasingly
resistant to currently marketed antibiotics. The company is in
discussions with the FDA with the aim of resolving outstanding
issues and gaining approval of its NDA.

Ariflo, a PDE4 receptor inhibitor for COPD, is in Phase III
clinical trials with an NDA planned for the second half of
2002.

Tranilast, being developed for restenosis, is also in Phase
III clinical studies. Regulatory filings are planned for
fourth quarter 2001.

Bexxar a novel therapy for non-Hodgkin's lymphoma, was
submitted and accepted in late 2000, and is under priority
review by the US FDA.

GSK's Vaccines business is also contributing to both the short
and long term prospects of the company through a strong
pipeline of new products. In the short-term, growth will be
boosted by the launch this year of Infanrix PeNta in the US,
as well as Twinrix for adults, the first and only vaccine that
protects against hepatitis A and B. GSK has a wealth of late
stage development products: for example, a paediatric
combination vaccine against meningitis A and C, set to be
launched into a market with a $500 million potential; as well
as a second generation vaccine against S. pneumoniae and a
vaccine against rotavirus, each directed at a $1 billion
market. Exciting long-term opportunities include the search
for vaccines for global challenges such as HIV and malaria,
and the creation of a new generation of therapeutic vaccines.

Jean Stephenne, President and General Manager, GlaxoSmithKline
Biologicals, said: 'I am particularly excited about our
extremely full pipeline that includes 23 vaccines, five of
which will be introduced this year: Twinrix adult, Infanrix
PeNta and HeXa, Tritanrix HB Hib, and Boostrix.'


Enhancing Research and Development Productivity
-----------------------------------------------
The three key elements in increasing the efficiency and output
of GSK's R&D activities are the re-design of its
organisational structure, continuing investment in harnessing
the potential of the human genome and leveraging our abilities
to demonstrate the value of our products.

R&D Restructuring
-----------------
'We have created six Centres of Excellence for Drug Discovery
(CEDDs) designed to act as small business units within the
larger R&D organisation,' Dr Yamada said: 'The new structure
will maintain the momentum to deliver the existing pipeline,
capture the advantages of scale and promote agility and
entrepreneurial spirit. At the same time it will create an
environment to stimulate the best and the brightest scientists
and provide the flexibility to accommodate future change.'

The CEDDs can select the best assets from either internal
discovery or in-licensing to move rapidly from the
identification of promising compounds to the proof of concept
stage. The CEDDs are structured to encompass both discovery
and early clinical development. Each CEDD is autonomous,
accountable, and entrepreneurial along the lines of a biotech
company.

Harnessing the Potential of the Human Genome and Demonstrating Value
--------------------------------------------------------------------
In addition to the agility of the CEDDs, the new structure
retains the benefit of scale and size in drug discovery and
development.  In particular, the company is benefiting from
its previous investment in technologies in genetics and
discovery research such as high throughput gene-sequencing,
chemistry and screening.  Integrating these technologies
further with high throughput biology will be the key to
unlocking the value of genomics through a better understanding
of gene function.

One exciting opportunity arising from GSK's genomics effort,
described by Dr Yamada, involves the inhibition of an enzyme,
Lp-PLA2, which has been identified as a major new risk factor
in cardiovascular disease. A lead compound, 435495, has
demonstrated its ability to reduce significantly the level of
Lp-PLA2 in man.

GSK has advanced capabilities to demonstrate the economic as
well as medical benefits of the company's products. These
include programmes in pharmacogenetics, advanced experimental
medicinal technologies, and preferential access to large
medical databases.

*  *  *  *

GlaxoSmithKline - one of the world's leading research-based
pharmaceutical and healthcare companies - is committed to
improving the quality of human life by enabling people to do
more, feel better and live longer.

Under the safe harbor provisions of the US Private Securities
Litigation Reform Act of 1995, GSK cautions investors that any
forward-looking statements or projections made by GSK,
including those made in this Announcement, are subject to
risks and uncertainties that may cause actual results to
differ materially from those projected.  Factors that may
affect GSK's operations are discussed in Annex I to this
Announcement.


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Cautionary Factors that May Affect Future Results
(Cautionary Statements under the U.S. Private Securities Litigation 
Reform Act of 1995)

The Group's reports filed with the U.S. Securities and
Exchange Commission (the 'Commission'), including the release
of which this annex is a part ('this release'), contain, and
written information released, or oral statements made to the
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the Group's current expectations or forecasts of future
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other words and terms of similar meaning in connection with
any discussion of future operating or financial performance.
In particular, these include statements relating to future
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performance or results of current and anticipated products,
sales efforts, expenses, the outcome of contingencies such as
legal proceedings, and financial results.

Any or all of the Group's forward-looking statements in this
release, in reports filed with the Commission, or in any other
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incorrect.  They can be affected by inappropriate or
inaccurate assumptions the Group might use as a basis for such
forward-looking statements or by known or unknown risks and
uncertainties.  Many factors mentioned in the discussion of
the Group's business in this release will be important in
determining future results.  Consequently, no forward-looking
statement should be viewed as or can be guaranteed.  Actual
future results may vary materially.

The Group undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new
information, future events or otherwise.  Investors should
also note the following cautionary discussion of risks and
uncertainties relevant to the Group's business.  The factors
listed are those that the Group thinks could cause the Group's
actual results to differ materially from expected and
historical results.  Other factors besides those listed here
could also adversely affect the Group.  This discussion is
provided as permitted by the U.S. Private Securities
Litigation Reform Act of 1995.

* Generic competition as several products face expiration
  of patent protection in the United States and other important
  markets.  Particularly in Europe competitors may seek to
  market generic products prior to patent expiration following
  the expiration of the data exclusivity period for pioneer
  products through formulations that the competitor claims do
  not violate the patents related to the pioneer product.  The
  Group is routinely engaged in disputes over its patented
  products and processes in order to protect its intellectual
  property.

* The ability of the Group to integrate the large and
  complex Glaxo Wellcome and SmithKline Beecham businesses as
  well as the Block Drug acquisition and realise synergies and
  achieve cost savings.

* Increased competition from other proprietary products
  (and in certain cases generic equivalents of those proprietary
  products upon patent expiration) in therapeutic areas
  important to the Group's long-term business performance.  Even
  during the period the Group's products are protected by
  patents they may be subject to development by new products by
  competitors having superior performance or lower prices or
  other competitive advantages over the Group's current
  products.

* The difficulties, uncertainties and the high level of
  investment inherent in new product development.  The outcome
  of the lengthy and complex process of new product development
  is inherently uncertain.  A candidate can fail at any stage of
  the process and one or more late stage product candidates
  could fail to receive regulatory approval.  New product
  candidates may appear promising in development but fail to
  reach the market because of efficacy or safety concerns, the
  inability to obtain necessary regulatory approvals, the
  difficulty of excessive cost to manufacture and/or the
  infringement of patents or intellectual property rights of
  others.  Furthermore, the sale of new products may prove to be
  disappointing and fail to reach anticipated levels.

* Pricing pressures, both in the United States and other
  countries around the world, including rules and practices of
  government sponsored health systems, managed care groups,
  judicial decisions and governmental laws and regulations
  related to Medicare, Medicaid and healthcare reform,
  pharmaceutical reimbursement and pricing in general.

* Changes in government laws and regulations and the
  enforcement thereof affecting the Group's pharmaceutical and
  vaccine businesses.

* Efficacy or safety concerns with respect to marketed
  products, whether or not scientifically justified, leading to
  product recalls, withdrawals or declining sales.

* Legal factors, including products liability claims,
  antitrust litigation, environmental concerns and patent
  disputes with competitors, any of which could preclude
  commercialisation of products or negatively affect the
  profitability of existing products.

* Lost market opportunities resulting from delays and
  uncertainties in the approval process of the U.S. Food and
  Drug Administration, European and other regulatory
  authorities.

* Changes in tax laws related to the taxation of the
  Group's earnings within and outside the United Kingdom,
  particularly with respect to jurisdictions in which the Group
  pays tax at rates lower than its overall effective rate.

* Changes in applicable accounting standards that are
  adverse to the Group.

* Economic factors over which the Group has no control,
  including changes in inflation, interest rates and foreign
  currency exchange rates and controls.

* International operations could be affected by changes in
  intellectual property legal protections and remedies, trade
  regulations, and procedures and actions affecting approval,
  production, pricing, reimbursement and marketing of products,
  as well as unstable governments and legal systems,
  intergovernmental disputes and possible nationalisation.

This list should not be considered an exhaustive statement of
potential risks and uncertainties.