It's better than nothing -- but not by much.
Yesterday, European regulators decided to pull GlaxoSmithKline's
After an FDA advisory panel split its vote in July over whether heart problems justified pulling the drug, strict prescribing requirements seemed like the most likely outcome.
In the U.S., people on Avandia will be able to continue taking the drug, but for new patients, doctors will have to certify that they've tried other drugs before it can be prescribed. Diabetes drugs are a revolving door since type 2 diabetes is a progressive disease; the drugs only work for so long. Being unable to get new patients to replace the old ones easily means Avandia sales are sure to drop. Plus, some of the current patients will likely stop taking the drug now simply because of the most recent news; "If it's not good enough for the Europeans, it's not good enough for me."
Where there's a loser, there's usually a winner nearby; in this case, more than one.
On the surface, Takeda's Actos would look to be the biggest winner, since it's in the same class as Avandia, but it has potential side effect issues of its own. Merck's
Then there are the injected drugs. As the disease progresses, people will eventually need insulin products from companies such as Novo Nordisk
Most of the damage to U.K.-based Glaxo has already been done, but there's still about $1 billion in annual sales up for grabs. Come and get it.
Anand Chokkavelu thinks health-care giant Johnson & Johnson is a perfect core stock for your portfolio.