GlaxoSmithKline’s stock price has fallen approximately 10% since a study published in the New England Journal of Medicine in May showed an increased risk of heart attack and other adverse cardiac events for patients taking the diabetes drug Avandia. Now shareholders are fighting back. A class action lawsuit has been filed against GlaxoSmithKline in the US claiming the company issued a series of “false and misleading statements” regarding Avandia, the group’s blockbuster diabetes drug.
Avandia is still on the market, pending further research. The FDA has said it will issue a “black box” warning on Avandia,which means that studies indicate the drug carries a significant risk of serious or even life-threatening adverse effects. This warning and the media frenzy around Avandia is going to decrease sales and, of course, declining profits. This lawsuit alleges that Glaxo not only ignored its duty to Avandia users, it also ignored Glaxo shareholders.