GSK Expects £1.57bn Legal Charge

15 July 2010 (Last Updated July 15th, 2010 18:30)

UK pharma giant GlaxoSmithKline (GSK) expects to record a legal charge of £1.57bn ($2.4bn) for the second quarter of the year as a result of settling the majority of claims relating to diabetes medication Avandia. GSK said that the charge would also cover other legal cases, such as liti

UK pharma giant GlaxoSmithKline (GSK) expects to record a legal charge of £1.57bn ($2.4bn) for the second quarter of the year as a result of settling the majority of claims relating to diabetes medication Avandia.

GSK said that the charge would also cover other legal cases, such as litigation surrounding its Paxil antidepressant and an investigation into a factory in Cidra, Puerto Rico, that formerly belonged to the company.

Analysts initially expected GSK could have to spend as much as $6bn to resolve Avandia claims, but recent modest settlements and favourable panel voting led them to expect the revised figure, equivalent to about 2.5% of the company's market value, according to Reuters.

Avandia, once GSK's second biggest drug, can remain on shelves but must contain new heart-risk warnings.