More Deceit from GlaxoSmithKline
Editor: Robert J. Binstock
Profession: Avandia Attorney
September 17, 2007
By Scott Kappes
Category: Avandia Heart Attack
Two British pension funds are vying to be lead plaintiffs in a U.S. class action lawsuit filed against GlaxoSmithKline for misleading investors about the risks of Avandia. The North Yorkshire Pension Fund and the Avon Pension Fund manage about $6 billion of their members assets. Many GlaxoSmithKline investors are dissatisfied with the companies share prices since the New England Journal of Medicine published a study linking one of their best selling drugs, Avandia, to an increased risk of heart failure.
The findings of the study showed a 42 percent increased risk of heart failure associated with Avandia. The study sent a shock through the industry and took about $18 billion off of GSK's market capitalization.
The lawsuit alleges Glaxo "engaged in a scheme to deceive the market and a course of conduct that artificially inflated GSK's stock price" and "failed to adequately disclose" important risk info. Glaxo is accused of "fraud" and "deceit." A spokesman for GSK said that the company believed the lawsuit had no merit and would vigorously defend itself.
The FDA has recently required GSK to place a new heart failure warning on Avandia warning of this increased heart risk. A panel voted to impose the new "black box" warning, instead if pulling the drug from the market.
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