The push by two British local authority pension funds to lead a US class-action lawsuit against GlaxoSmithKline reveals not just investor impatience with the poorly performing drugs company, but also a new pugnacity among some UK institutions.
The Avon and North Yorkshire funds want to sue the company for allegedly misrepresenting the prospects for its troubled diabetes pill, Avandia.
The Times reports:
It is time to reassess the reputation of Jean-Pierre Garnier.
The chief executive of GlaxoSmithKline, who is set to retire next May, has undoubtedly helped to create one of the world’s biggest pharmaceutical companies. He has also worked hard to find new ways to imbue the company’s research programme with the kind of entrepreneurial spirit usually so lacking at large corporations. And he has been one of the few charismatic showmen of the global healthcare industry, making the public case for greater investment in the treatment of diabetes and cancer and greater government preparedness for potential epidemics such as bird flu.
However, for all his achievements, GSK’s share price has been comatose for years. His company is inundated by problems. Calls for bold action have gone unheeded and the model he has championed – developing drugs from primary research in the laboratory to end use in the hospital – is being questioned.
The scandal over Avandia – the diabetes medicine which in May was linked to a raised risk of heart problems, triggering a slide in sales of the group’s second-best selling product – has concentrated minds.
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