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Glaxo shares dip on factory probe

Date Class
18th Mar 2005 Other Issue
 
Details
GlaxoSmithKline shares have fallen almost 2% amid fears a US inquiry into manufacturing quality could be widened and may possibly lead to a big fine.

On 4 March the US Food and Drug Administration (FDA) seized batches of two drugs from the Puerto Rico plant.

Regulators said its diabetes treatment Avandamet and anti-depressant Paxil CR tablets failed to meet safety standards - but did not pose a health risk.

Glaxo could face a fine of as much as $1.4bn (730m), Reuters reported.

Such a penalty could be imposed if the FDA obtains a formal order requiring Glaxo to resolve issues at the Cidra factory, said analyst Michael Leacock at Nomura.

The FDA action could see all manufacturing at the plant halted although regulators might permit production of other treatments to continue while its inquiry continued.

Glaxo spokesman Phil Thomson said the company had not yet discussed such an order with the FDA.

Shares in Glaxo were trading down 1.84% at 1224 pence by the close of trade on Friday. Its stock has fallen almost 10% since the FDA seizure on 4 March.

 

 

 


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