Lower Avandia Rxing and generics take a toll on GlaxoSmithKline's third-quarter

Global number two drugmaker GlaxoSmithKline has disappointed investors, posting sales for the third quarter of 2007 that were below consensus expectations, although earnings were in line with forecasts.

The reporting period was impacted by significant generic competition and negative sentiment towards the firm's leading antidiabetes drug, Avandia (rosiglitazone), that has seen prescribing for the product fall, especially in the huge US market, since a May article in the New England Journal of Medicines suggested that the drug, as well as others in its class, increased the risk of heart attacks (Marketletters passim).

Specifically, GSK saw turnover grow 1% to L5.48 billion ($11.11 billion; at constant exchange rates) for the quarter, with operating profit down 1% at $1.91 billion and pretax profit as L1.88 billion, or earnings per share of 23.7 pence, down 2% and 1%, respectively. In sterling terms, sales were down 3% and net profit 7% lower.