GSK Will End Avandia Promotion Worldwide
This article was originally published in The Pink Sheet Daily
Executive Summary
Even in countries where the drug will still be sold, the firm projects "minimal" sales.
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With the European Medicines Agency suspending marketing authorization for all rosiglitazone-containing medicines and the FDA strictly limiting their use, manufacturer GlaxoSmithKline has projected that sales of the type 2 diabetes drug will decrease by more than half during the second half of 2010 and then fall off to "minimal annual sales thereafter." EMA and FDA announced their regulatory decisions Sept. 23 due to safety data showing an elevated risk of cardiovascular events, such as heart attack or stroke, in patients treated with rosiglitazone (see related stories on the (Also see "FDA Keeps Avandia On The Market But Looks To RECORD For More Clarity On CV Risk" - Pink Sheet, 23 Sep, 2010.) and the (Also see "EU Suspends Avandia; Pressure On Open Decision-Making May Stay" - Pink Sheet, 23 Sep, 2010.) .) GSK markets rosiglitazone as Avandia, and the molecule also is sold in combination products - with metformin as Avandamet and with glimepiride as Avandaryl. In a same-day release, GSK noted that rosiglitazone products produced total sales of 321 million (about $504 million) during the first half of 2010, already down 18% from the same period in 2009. U.S. sales totaled £164 million and EU sales £72 million. For the second half of the year, GSK projects rosiglitazone product sales to range between £100 million and £150 million "net of customer returns of product previously sold." Associated one-off costs to be incurred this year, such as stock write-offs and asset write-offs, are expected to be about £100 million on a pre-tax basis, the company said. In a Sept. 23 note, Deutsche Bank analyst Mark Clark said the impact of declining rosiglitazone sales would lead him to project a 3% downside on GSK's earnings per share for 2010, with a 2% decline for 2011 and a 1% drop-off for 2012. He maintained a rating of "hold" for the company's stock. "Investor concerns regarding Avandia have dominated GSK's share price performance in 2010 and we expect the news to act as a further modest drag in the near term," Clark wrote. "However, we do not believe a new flood of litigation is likely and GSK's guidance for minimal sales going forward is likely to finally put to rest the Avandia debate." -Joseph Haas ([email protected] ) |