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UPDATE 1-GlaxoSmithKline's new boss streamlines drug research

(Adds details, analyst comment, background)

LONDON, July 26 (Reuters) - GlaxoSmithKline's new Chief Executive Emma Walmsley announced plans on Wednesday to streamline drug research in a bid to improve returns in the group's core pharmaceuticals business.

Walmsley, who took over in April, said GSK would allocate capital to priority areas including respiratory and HIV and infectious diseases, and two potential areas of oncology and immuno-inflammation.

More than 30 pre-clinical and clinical programmes will be stopped, partnered or divested, and the group is considering options for its Rare Diseases unit after a strategic review.

"Q2 was another quarter of progress for GSK," Walmsley said. "Our priority for the second half of the year is to maintain this momentum and prepare for the successful execution of several important near-term launches in Respiratory, Vaccines and HIV."

The announcement came as Britain's biggest drugmaker reported a 12 percent rise in adjusted earnings per share in sterling terms to 27.2 pence on sales up 12 percent at 7.32 billion pounds ($9.53 billion).

Analysts, on average, had forecast EPS of 26.2 pence and sales of 7.26 billion pounds, according to Thomson Reuters data.

The group reiterated its outlook for 2020, first given in 2015, forecasting sales growth of low-to-mid single digits and adjusted earnings of mid-to-high single digits on a constant currency basis.

It will extend a cost-cutting programme to deliver an additional 1 billion pounds of annual cost savings by 2020.

A most impressive start by Emma Walmsley, as she demonstrates her understanding of the key issues and being unafraid of taking unpopular decisions, said Trinity Delta analyst Mick Cooper.

Its shares drifted lower after the results and were flat at 1028 GMT. ($1 = 0.7680 pounds) (Reporting by Ben Hirschler and Kate Holton, editing by Louise Heavens and Adrian Croft)