MARKET TALK: GSK May See Relief Rally On Avandia News >GSK.LN

15th Jul 2010 07:32

0632 GMT [Dow Jones] A modest rally in GlaxoSmithKline's (GSK.LN) shares could follow after the FDA voted in favor of keeping Avandia on the US market, says Citigroup. The brokerage notes the withdrawal of Avandia could have reduced the group's '11 EPS by 3.3%, or 6.4% in the event of worldwide withdrawal. "The reaction we saw to the recent AstraZeneca (AZN.LN) Crestor victory suggests a stronger response could occur than purely driven by the earnings impact." Expects the FDA to rule within a couple of weeks, and thinks it will follow the panel recommendation by further restricting Avandia use. Has a buy rating, and 1375p price target. Shares closed Wednesday at 1182p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires July 15, 2010 02:32 ET (06:32 GMT)