Pfizer and Eli Lilly, the US pharmaceuticals groups, have both reported strong first-quarter sales increases, following similar good news from Johnson & Johnson and Merck.

Pfizer, the world's largest drugs company, saw a sharp rise in first-quarter profits after a $2.2 billion (€2.01 billion) gain on the disposal of the Adams confectionery business and Schick-Wilkinson Sword, the shaving products division.

Eli Lilly saw its net income hit by write-downs on biotech investments and restructuring costs, but excluding these items its earnings beat expectations, helped by new drugs contributing to sales and top sellers performing well.

Drugmakers' sales and earnings have started to rebound from a background of gloom in the sector last year.

Pfizer - which employs over 1,000 in Ireland - has led the industry and jump-started its growth outlook with the $60 billion buy of rival Pharmacia.

Ireland is a key manufacturing base for Pfizer, with constituents for both Viagra and Lipitor made at its plants in Cork.

Pfizer's underlying earnings grew 13 per cent as Lipitor, a cholesterol treatment and the world's top-selling drug, saw first-quarter sales of more than $2 billion. Zoloft, the anti-depressant; Neurontin, an anticonvulsant; and Zithromax, Pfizer's leading antibiotic, each achieved sales greater than $500 million.

Net income for the three months to March 31st was up from $1.96 billion to $4.67 billion, or 76 cents per share, including one-time gains. Total sales rose 10 per cent to $8.53 billion.

Excluding gains, profit increased 13 per cent to $2.74 billion, or 45 cents per share, from $2.43 billion, or 39 cents, last time.

Lilly, which has lost sales to generic versions of block-buster antidepressant Prozac in the past year, saw its pipeline starting to add sales in the quarter. Reported net income fell 35 per cent, to $407 million due to one-off items. Total sales rose to $2.9 billion, from $2.6 billion.

Excluding items, net income rose 5 per cent to $661 million.