Contact Us

No Form
*    Denotes required field.

   * First Name 

   * Last Name 

   * Email 


Cell Phone 

Street Address 

Zip Code 



   * Please describe your case:

Date of Incident : 

For verification purposes, please answer the below question:

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.

GlaxoSmithKline Outlook Falls Following Avandia Restrictions

Sep 24, 2010 | Parker Waichman LLP

GlaxoSmithKline’s Avandia problems are expected to take a toll on the drug maker’s bottom line. According to a Reuters report, analysts have already begun cutting Glaxo’s earnings forecast, after regulators in the US and Europe announced separate actions that will likely scuttle Avandia’s sales.

Yesterday, the US Food & Drug Administration (FDA) restricted sales of Avandia, as well as two related drugs called Avandamet and Avandaryl, after concluding their association with an increased risk of heart attacks and strokes outweighed the drugs’ benefits for most patients. Patients in the US will only have access to Avandia if they and their doctors attest that they have tried every other diabetes medicine and that patients have been made aware of Avandia’s cardiac side effects. Patients already taking Avandia who want to continue will have to sign statements that they understand the risks.

At the same time, regulators in Europe announced that sales of Avandia and related drugs would be suspended. The suspension is to remain in place unless convincing data are provided that identify a group of patients that would benefit from the drugs.

About 600,000 diabetics in the US take Avandia, but that number is expected to decline significantly thanks to the FDA’s action. According to Reuters, a Panmure Gordon analyst predicted that the impact of these developments on Glaxo’s profits will be felt most in 2011, which now promises to be a flat year for growth. That analyst is now changing his recommendation on the stock to “hold” from “buy.”

Another at Jefferies pointed out that Avandia’s high operating profit margin, estimated at around 80 percent, meant the impact of the drug’s demise at the earnings level would be greater than at the level of sales. As a result, Reuters said Jefferies is cutting its 2011 earnings per share (EPS) forecast by 4 percent.

Other articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo