Avandia was one of GlaxoSmithKlines top selling drugs until a report was released in May that revealed the diabetes medication increased users risk of adverse cardiovascular events by 43%.
Researchers estimate that since the news, Avandia sales have slumped close to 22. Slumping Avandia sales coupled with increased generic competition with Glaxo's other big money drugs Wellbutrin XL and Zofran is to blame for the companies lower than estimated earnings.
Analyst Nick Turner of Mirabaud Securities told Bloomberg News, ?The whole picture is dominated by Avandia.? Glaxo has millions much money into defense of their blockbuster drugs, but to no avail.
?Early indicator data suggest prescriptions will fall 45 to 50 per cent before bottoming out in the US,? said Mark Purcell, European pharmaceuticals analyst for Deutsche Bank.
The Avandia situation has also overshadowed the coming loss of the company's chief executive Jean-Pierre Garnier who is to step down from his position next May. In many ways Garnier's future and reputation rest in the hands of the FDA advisory committee.
The committee will meet next week and pick one of three options for the drug; ban the drug; to impose strict rules governing its sale, such as the inclusion of ?black box? warning labels, or to delay making a decision until further data is available.
Glaxo will look internally to fill the void left by Garnier. Three candidates for his job will be Glaxo's European chief, Andrew Witty, his American counterpart, Chris Viehbacher, and the operations head, David Stout.
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