Avandia fallout hurts Glaxo shares further

GlaxoSmithKline P.L.C.'s shares fell further yesterday on a dismal prognosis for sales of its diabetes drug Avandia after researchers reported last week that the pill raised heart attack risks.

Avandia's share of new oral diabetes prescriptions fell from 10 percent to zero in the two days after the May 21 report in the New England Journal of Medicine, Deutsche Bank analysts reported. Takeda Pharmaceutical Co.'s diabetes drug Actos' share climbed from 10 percent to 22 percent, the analysts wrote, citing data from market research firm ImpactRx Inc.

"This reaction is far worse than we had anticipated and suggests that there could be as much as 22 percent downside risk to GSK's near-term earnings, suggesting that there is still further downside to GSK's share price," the analysts wrote.

Publication of the Cleveland Clinic study caused Glaxo shares to fall 9 percent last week, cutting $13.7 billion from the company's market value. The stock dipped yesterday 37 cents more, or just under 1 percent, to $52.06 in New York.

"Two days of data is not enough to reach sensible conclusions on the trend for Avandia new prescriptions," Glaxo said in an e-mail.

The New England Journal article said users of Avandia, the drugmaker's second-best-selling medicine, were 43 percent more likely to have a heart attack and had a 64 percent increase in the risk of death than those given other drugs.

London-based GlaxoSmithKline has a U.S. base in Philadelphia. ImpactRx is based in Mount Laurel.