PHARMACEUTICAL items produced in the North-East helped drugs giant GlaxoSmithKline (GSK) return to sales growth in the first quarter.

The results released yesterday, came after GSK dealt a blow to its manufacturing plant in Barnard Castle, County Durham, which lost out on a £350m investment to its sister site in Ulverston, Cumbria.

A spokesman for the firm stressed that GSK remained committed to its North-East site which is the headquarters of its skin care division.

The company will continue investing in Barnard Castle, where it has spent more than £80m since 2006, with £15m of a £25m pot announced last year still to be invested in 2012. No changes to the size of the existing 1,000-strong workforce are expected in the coming months, the spokesman added.

GSK is emerging from a trough caused by the expiry of patents and collapsing sales of diabetes pill Avandia, which has been linked to heart risks. It struggled to grow in the first quarter, when revenue increased just 1 percent - less than expected - due to pressures on its business in Europe and some emerging markets, combined with tough year-ago comparisons.

However, GSK chief executive Sir Andrew Witty reiterated that the company was well on track to return to sales growth over the whole of 2012, after a difficult few years, with gradually improving margins. He also announced a 6 percent dividend hike to shareholders.

"We remain mindful of the challenges we face given the current global political and economic environment, particularly in relation to pricing on our more established products.

"However, we also continue to see attractive growth opportunities across our businesses and we intend to continue to invest behind them to strengthen the breadth and mix of the group and its future growth prospects," Sir Andrew added.

Earlier this month the company bid £1.6bn for US research partner Human Genome Sciences. The deal would give GSK ownership of an experimental diabetes drug and heart medicine called darapladib that some analysts think could generate annual sales of £6bn, but most agreed that the firm will have to make a higher offer if it hopes to complete the acquisition.