U.S Marshals action affects Glaxo share price

Early this month, U.S. marshals seized batches of Paxil CR and Avandamet at manufacturing and distribution sites in Puerto Rico and Knoxville, Tennessee.

Although the medicines do not pose a significant health hazard patients are being advised to continue taking the tablets and talk with their doctors.

Paxil CR is an antidepressant and Avandamet a treatment for diabetes. The company, one of Europe's biggest drugmakers, is working with U.S. authorities to resolve manufacturing violations at a Puerto Rican plant.

Glaxo spokesman Chris Hunter-Ward said they are looking at options to mitigate any impact on earnings. Paxil CR had sales of 396 million pounds ($759 million) last year, while Avandamet generated 222 million pounds.

London-based Glaxo expects earnings per share growth in 2005 to be in the "low double-digit" range, repeating guidance it provided last month.Shares of Glaxo have fallen more than 3 percent since the seizure; they had risen 13 percent in the last 12 months. The shares closed at 1,269 (-4.00%) in London and are trading at $48.95 (+0.14%) 3:45pm EST in the U.S.

GlaxoSmithKline Plc says the action will have an "uncertain'' effect on profits.


The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of News Medical.
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