GSK Profits Slip in Wake of Avandia Troubles

Scott Kappes

Contributor
(866) 735-1102 Ext 346

0 CommentsPrint ArticleSubscribe

Last week pharmaceutical giant, GlaxoSmithKline, announced that sales for 2007 slipped two percent from 2006. Much of the loss can be attributed to plummeting sales of the once blockbuster diabetes medication Avandia. In May a New England Journal of Medicine article linked the drug to a 42 percent increased risk of heart attack causing worldwide concern and in turn an almost instant plunge in sales of Avandia.

Forth quarter sales dropped by almost ten percent with Avandia being the main culprit, showing a drop of over $250 million. Analysts that projected an increased profit of three to four percent were shocked by the decline.

Growing competition from manufacturers of generic drugs also led to weaker sales of Coreg IR, the heart drug, Welbutrin XL, the antidepressant, and Zofran, the anti-nausea treatment.

The Avandia problem will likley continue to hurt sales over the next year, but CEO, JP Garnier insist that beneath the problems with Avandia the company is in great shape. He claims that without the Avandia incident the company would have posted a growth of 19 percent in 2007.