India is “fantastically good” at areas such as chemistry manipulation, clinical research but is yet to “really cross the Rubicon” when it came to de novo discovery research, said GlaxoSmithKline Chief Executive, Mr Andrew Witty, the day after the firm reported a rise in profits of 14 per cent in the first quarter.

“This is a different skill set and still a very nascent phenomena in India,” he said. “In India we would invest in a heart beat when we see the appropriate knowledge and skill set,” he added.

GlaxoSmithKline announced plans to set up a Shanghai drug discovery centre in 2007, pumping an initial $40 million into the project which it hopes, in the long term, will employ around a 1,000 staff.

At the heart of the centre was returning Chinese émigrés who had spent years in biotech labs in the US, working alongside a new crop of scientists abroad.

“This creates a very unusual blend of Chinese scientists many of whom walk and talk and behave like American discovery scientists.”

“Every Government wants a research and development centre but the only reason to build one is to have people who are globally competitive in the science you want to prosecute.”

Profits rise

Net profits rose to £1.5 billion in the first quarter, as the firm made £246 million on the sale of its stake in Quest Diagnostics in the US, compensating for a decline in flu-related products.

Mr Witty reaffirmed the company's commitment to India, though said the nature of it's role as a manufacturing centre would change – highlighted by the recent decision to transfer some manufacturing processes from India to Scotland.

“We had a period where the flow of activities went one way now we see it more as a two-way street,” he said. “You are seeing European factories rapidly catching up so that having a plant in the UK now is very competitive.”

The firm is expecting India to generate around $1.4 billion in turnover this year, around 3 per cent of the total globally, with both the consumer products and pharmaceutical businesses growing by between 15 and 20 per cent.

Mr Witty denied that the EU-India Free Trade Agreement, which would strengthen IP protection in India, would have a significant impact on prices. “You can't link price to patents,” he said.

“You have to price for sustainable growth in the country you are operating in.” He said that firms that simply raised prices in the wake of stronger patent protection would not find it sustainable.

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