Glaxo takes £1.6bn legal charge for Q2

15th Jul 2010 07:05

Drugs firm GlaxoSmithKline expects to record a legal charge for the second quarter of 2010 of £1.57bn.The legal charge settlements include an investigation by the US Government into the company's former manufacturing site at Cidra, Puerto Rico; product liability and anti-trust litigation relating to Paxil (paroxetine), and product liability cases regarding Avandia (rosiglitazone) and other products. On the Cidra manufacturing facility investigation, it has reached an agreement in principle with the US Attorney's Office for the District of Massachusetts and the US Department of Justice to pay a settlement of £500m. Regarding Paxil, it has resolved the anti-trust litigation involving Apotex and settled the vast majority of product liability cases relating to the product. The substantial majority of the product liability cases relating to Avandia have also been settled. "The charge we have announced today reflects the company's ongoing efforts to resolve certain long-standing legal cases," said GSK's general council, Dan Troy. "This represents a substantial proportion of GSK's outstanding litigation. This progress is helping us to reduce financial uncertainty and risk for shareholders." In a separate statement, Glaxo said a joint advisory committee to the US Food and Drug Administration (FDA) has voted to allow its lucrative diabetes drug Avandia to remain on the market.Twenty committee members voted for recommendations ranging from making no changes to the current label, to revising the label with additional warnings and restrictions. Only 12 voted for the drug to be withdrawn from the US market."Following today's recommendations, we will, of course, continue to work with the FDA in the best interest of diabetes patients who face this chronic and serious disease," Dr. Ellen Strahlman, GSK's Chief Medical Officer, said. The recommendation will now be considered by the FDA in making its final decision, which generally follows the committee's advice.