GlaxoSmithKline expects to record a legal charge of £1.57 billion for the second quarter after settling the "substantial majority" of claims relating to its diabetes pill Avandia.
The drugmaker said today that the charge would cover not only settlements for Avandia but also other long-standing legal cases, including an investigation into its former factory at Cidra in Puerto Rico and anti-trust litigation over antidepressant Paxil.
The after-tax cost of the legal charge will be £1.35 billion, it said.
Glaxo did not specify the amount it was setting aside to settle liability claims over Avandia, which US health advisers yesterday recommended should be allowed to stay on the market. But Glaxo said the agreement in principle over Cidra was for a total of £500 million.
A US Food and Drug Administration advisory panel called yesterday for stronger warnings about the risks of heart ailments for those taking Avandia and restrictions on which patients can be prescribed the medicine.
While a majority of the panel didn't recommend a recall, the proposed label changes may eliminate 95 per cent of Avandia's use, said Steven Nissen, head of cardiology at the Cleveland Clinic in Ohio.
Avandia generated $1.1 billion last year for Glaxo, one-third the drug's revenue. Mr Nissen's analysis two years ago linked the medicine to a 43 per cent increased risk in heart attacks.
The FDA began re-examining its 2007 decision to keep Avandia on the market after members of congress voiced concerns and data emerged from almost a dozen studies.
Reuters