Thursday, 26 July 2007

Glaxo shares up despite Avandia mess

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Oh, this is awesome news for anyone touched by the Avandia mess: manufacturer GlaxoSmithKline (GSK) has announced that its shares are up despite its troubles over the diabetes drug Avandia. The scandal arose over revelations that Avandia could cause heart problems. Things only escalated as details came to light, particularly the role of the US Food and Drug Administration and its completely inadequate response to the problem.

Given all this bad publicity, wouldn't you expect GSK's stocks would take a dive? Well, they did during the quarter that Avandia hit the news. However, the company's overall outlook for the year 2007 still looks pretty darn good, apparently. As a result, projections for earnings-per-share remain stable and the company is expanding its share buyback program.

So much for suffering the consequences of your actions... On the other hand, GSK has vigorously defended Avandia against claims of heart damage. They would say: "Why should we suffer? We haven't done anything wrong."

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