PHARMACEUTICALS giant GlaxoSmithKline (GSK), will decide by the summer whether a new biopharmaceutical plant, creating hundreds of jobs, will be sited in County Durham.

Its manufacturing facility in Barnard Castle is competing with three rival sites to become the location for the new plant where ground-breaking drugs to tackle specific illnesses will be produced.

GSK, which yesterday said it expected to be a net creator of jobs in the UK over the next five years, said a decision on the plant's location will be made in the first half of this year.

Unveiling its results for the year to December 31 yesterday GSK, which presently employs about 1,000 workers at Barnard Castle, insisted it is well placed to reverse falling sales after it highlighted a 30 new drugs expected to enter late-stage development in the next three years.

Glaxo, like many big players in the pharmaceuticals industry, faces problems inventing new blockbuster drugs to replace those whose patents expire, leaving them open to cheap competition.

GSK had previously said it was planning a £500m investment in manufacturing after the Government confirmed it would go ahead with "patent box" tax reforms

Yesterday GSK announced a 65 per cent rise in underlying profits for the year to December 31 to £8.4bn.

However it was up against weak figures from the previous year when it paid out £4bn in legal claims over the alleged side-effects of some of its drugs.

And in the final quarter of the year it swung back to profit after it incurred £2.2bn in legal charges the previous year.

The company said sales and profit margins will return to growth in 2012 as its efforts to produce new drugs begin to pay off.

Chief executive Sir Andrew Witty said there were ''increasing signs that we can replenish our pipeline on an ongoing basis'', offsetting fears over the impact of cheaper generic competition and government austerity measures.