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UBS weighs Glaxo’s Avandia liability

ASSOCIATED PRESS

LONDON - GlaxoSmithKline P.L.C. could be facing liabilities up to $6 billion over personal-injury lawsuits relating to its diabetes drug Avandia, UBS analysts said in a note made public Friday.
The UBS note, which comes a week after a highly critical report on the drug by the U.S. Senate Finance Committee, said the risk came from more than 13,000 personal-injury lawsuits outstanding in the United States.

Glaxo has major operations in the Philadelphia area.

"As U.S. Avandia contributes 1 percent to sales, our concerns are solely on personal-injury lawsuits," analysts said in a note headed by analyst Gbola Amusa.

UBS said the poll of experts suggested Glaxo's liability was in the range of $1 billion to $6 billion.

"We expect liability below the midpoint of this range and note GlaxoSmithKline has underperformed by around $2.5bn already," the note said.

The first of two U.S. federal bellwether trials, which will likely provide an indicator of court decisions on the other cases, is due to start on June 1 in Pennsylvania.

The U.S. Senate report criticized GlaxoSmithKline's handling of heart risks with the drug, alleging that Glaxo minimized the drug's safety risks and withheld important data from the U.S. Food and Drug Administration.

The FDA added a warning about potential heart attacks to Avandia in 2007, but the scope of that risk is still not fully understood.

Glaxo has said that the Senate criticism "mischaracterizes and distorts" the company's record.

UBS said that it believes data on Avandia support the drug's continued use, but added that "nonscientific political pressure from Congress will likely be as important as science at FDA in the coming months; and, product withdrawal, if it occurs, could put GlaxoSmithKline at the top end of our liability range."

UBS cut its price target on Glaxo from 1,550 peace (about $23.50) to 1,475 peace, but kept its buy recommendation.

American depositary receipts in Glaxo, traded on the New York Stock Exchange, were priced early this afternoon at $37.44, up 7 cents.

If you have been injured by Avandia contact an Avandia Attorney.

Sheldon J. Schlesinger, P.A. represents clients throughout the state of Florida including the cities of Boca Raton, Boynton Beach, Carol City, Cooper City, Coral Gables, Coral Springs, Davie, Deerfield Beach, Delray Beach, Fort Lauderdale, Hialeah, Hollywood, Jupiter, Lake Worth, Miramar, Miami, Oakland Park, Palm Beach, Palm Beach Gardens, Palm Springs, Pompano Beach, and Rivera Beach

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