Avandia- FDA Controversy Causes Questions of Comeback
The U.S. Food and Drug Administration decided this week that GlaxoSmithKline's diabetes drug Avandia shall remain on the market, but will carry more warnings on its label. Avandia recently was linked to increased heart and kidney problems in those who take the drug to manage their diabetes. Shares of GlaxoSmithKline had their biggest gain in two years after the FDA advisory panel decided not to withdraw Avandia from the market.
The news causes questions for GlaxoSmithKline: will the drug company's stock market value ever recover to its value prior to the Avandia scandal? Pascale Boyer Barresi, an analyst at Bordier & Cie, says "Glaxo probably will receive a black-box warning and the sales will probably not recover to the previous level. [Avandia sales] will probably recover 10 to 15 percent, but the decline was so far that I think once doctors have changed their patients, they will not switch back."
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