Avandia safety scare costs GSK $200m
pharmafile | July 26, 2007 | News story | Sales and Marketing | GSK
GlaxoSmithKline saw its performance in the second quarter of this year badly affected by a 22% slump in sales of its leading diabetes drug Avandia
Many US doctors have stopped prescribing the drug, particularly for new patients, after an independent study published in May concluded that the drug raised the risk of heart attacks in patients.
Investors had been prepared for the bad news, with most of the decline in sales occurring in the US market, where revenue dropped $200 million compared to the same period last year.
Prescribers outside the US have not responded as rapidly to the news, with sales in Europe managing a small increase, but the long-term future of the drug is likely to be decided shortly.
An FDA committee is due to meet on 30 July to decide whether or not Avandia should remain on the market, be withdrawn, or remain but with further restrictions on prescribing imposed.
A withdrawal seems unlikely at this stage, but it seems GSK won't be able to count on Avandia to go on delivering the strong growth it has over recent years.
Chief executive Jean-Pierre Garnier said he was confident that data analysis from 400,000 patients recently submitted by GSK to the regulator would support the drug's continued use in the US.
Europe's medicines regulator, the EMEA, has already passed judgement on Avandia's safety, and is unlikely to consider its withdrawal. Avandia has been contraindicated for use in people with heart failure since its launch in Europe in 2000, and the agency has continued to update its labeling.
Garnier was keen to stress that Avandia represents only around 10% of GSKs total revenues, which were supported by solid growth in other products.
The company's biggest selling product, respiratory blockbuster Seretide/Advair, continued its strong growth up 12% to £871 million. US sales grew 11% to £467 million, with continued expansion into the COPD market helping to maintain expansion, with Europe achieving 8% growth.
Despite these encouraging figures, overall growth was only 3%, and GSK will be looking to a clutch of new launches (including new breast cancer drug Tykerb in the US) to help maintain growth over the medium term.
In an effort to please investors, the company announced a doubling of the money spent on share buy-backs. The company now plans to buy back shares worth £12 billion over the next two years in order to increase returns for shareholders.
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