GlaxoSmithKline Diabetes Drug May Spike on News

The results of research to be presented this week may generate up to a 25 percent boost in demand and prescriptions for GlaxoSmith Kline's oral diabetes drug Avandia--best-known to consumers from the TV and print ads featuring pitchwoman Della Reese.

When results of Glaxo's Dream Trial research are presented Friday at the European Association for the Study of Diabetes meeting, it is anticipated the drug will be shown as a potential preventive medication for patients who are considered high-risk prediabetics.

That outcome should increase Avandia prescriptions by 20 to 25 percent, says Steve Scala, equity analyst at Cowen and Company. It could mean another $1.4 billion in Avandia sales by 2012, according to Merrill Lynch analyst Graham Parry. Last year, Avandia sales totaled $2.1 billion.

In a Sept. 7 research report, Scala wrote that the trial is expected to show a 40 to 50 percent reduction in the onset of diabetes among patients on Avandia compared to those on a placebo.



The news comes as Glaxo and other pharmaceutical companies have focused on ways to get patients to stay on their medications and take them as directed. Efforts by Glaxo to boost Avandia compliance, for example, include drug discounts, free trials for switching drugs, and diabetes support and health tips on for people already taking the drug.

Scala says the findings, given the drug's new usage potential, should increase Avandia use without eroding sales of competing diabetes drugs. Competing drugs in the sector include Takeda Pharmaceutical's Duetact and Pfizer's Glucotrol XL.

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