Those shareholders in GlaxoSmithKline who suffer from asthma no doubt needed their puffers yesterday, as shares in the UK’s largest, and the world’s second largest, pharmaceutical company took a plunge.
It was all down to the dreaded the US FDA (Food and Drug Administration) - dreaded, that is, by the drug companies. On Friday the FDA said that the company needed to change the labelling of its top selling asthma treatment Advair (known as Seretide in Europe) to make it clear that the drug was only recommended for use when other treatments have not worked.
It is a blow for GSK. The drug accounts for around 15% of its turnover, and around half of its sales are in the US.
GSK issued a statement saying it disagreed with the FDA decision. “Patient safety is of paramount concern to GSK, which is why we disagree with the FDA’s proposed labelling changes,” said Dr. Kathy Rickard, GSK Vice President of Clinical Development and Medical Affairs. “These proposed labelling changes would reserve the most effective asthma treatment — the combination of inhaled corticosteroids and long-acting beta agonists — until after a patient has failed on other treatment options and therefore may be at risk for severe outcomes, such as exacerbations and potentially death.”
But while shares crashed and GSK slammed the FDA, others suggested that actually the issue is not as serious as the fall in shares would suggest. And the changes the FDA wants would merely mean the wording on the packaging in the US would be similar to what is already stated on the European product. In Europe however, sales have jumped 17% over the last quarter, so before there’s any more panic, maybe speculators should inhale that piece of information first.
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