Corporate & Securities Law

In re GSK, after Paxil comes Avandia

By Werner R. Kranenburg

Drugs have landed GlaxoSmithKline Plc (LSE, NYSE: GSK) in the docket, again. Two years ago it was securities fraud claims surrounding Paxil - in the UK marketed under the name Seroxat - two weeks ago it was the drug Avandia. See the 2005 action’s press release and the 2007 action’s complaint (07 Civ. 5574, SDNY).

Plaintiffs’ Counsel: Scott + Scott LLC (2005) and Kaplan Fox & Kilsheimer LLP (2007)

The current status of the earlier action, In re GlaxoSmithKline Sec. Litig. (05 Civ. 3751, SDNY) filed in May 2005, is that the second amended complaint was dismissed in October 2006: “Plaintiff has failed to state a primary violation of the securities laws under section 10(b). Without a primary violation, there can be no secondary, or derivative, violation under Section 20(a). Accordingly, Plaintiff’s Section 20(a) claim is also dismissed.” (cited in In re NTL Sec. Litig.) An appeal had been filed with the US Court of Appeals for the Second Circuit. (Also see GSK’s 2006 Annual Report, p.163 (165 of 192).)

After having read the complaint in the current action (filed 11 June), for more information see the following GSK communications:

• press release in response to New England Journal of Medicine editorials (5 June)
• press release regarding data from RECORD study in relation to Avandia (5 June)
• statement of Moncef Slaoui, PhD, GSK Chairman Research & Development in testimony before the House Committee on Oversight and Government Reform (6 June)

A GSK spokesperson has, in line with its policy not to comment on individual lawsuits, submitted the following in response to a request for comment concerning the current action:

We will vigorously defend our medicine. GSK has acted responsibly, transparently and with the best interest of patients in mind. Any fair examination of the company?s record will show that GSK has been transparent in its efforts to thoroughly study the safety and effectiveness of Avandia, and to widely communicate that information to governments, regulatory authorities, scientific peers, physicians and others in a variety of ways.

The proposed Class Period is the period between 27 October 2005 and 21 May 2007, inclusive. The deadline to apply for Lead Plaintiff status is 10 August 2007.

Full post as published by With Vigour and Zeal on June 25, 2007 (boomark / email).