Glaxo settles more Avandia lawsuits in U.S.

* Case due to go to court in Philadelphia in June is settled

* Glaxo says settlement terms remain confidential

* First U.S. Avandia liability case now expected in October

By Ben Hirschler

LONDON, June 1 (BestGrowthStock) – GlaxoSmithKline Plc (GSK.L: ) has
settled thousands more lawsuits brought by patients alleging its
Avandia diabetes drug caused heart attacks, in a move that may
defuse potentially massive claims over the medicine.

A company spokeswoman said on Tuesday that consolidated
cases which had been due to come to court in Philadelphia this
month had been settled. She declined to give further details and
said the terms remained confidential.

The first product liability case involving Avandia will now
go to court in the United States in October, she added.

The move follows the separate settlement of some 700 cases
last month for about $60 million.

Analysts estimate Glaxo had faced a total of 13,000 claims
for damages involving Avandia, of which around 5,000 were
consolidated in Philadelphia, and there had been fears it could
face damages of up to $6 billion.

However, last month’s relative modest settlement deal and the
latest settlement in Philadelphia suggests the amount paid out
by the British-based drugmaker is likely to be a lot lower.

“This implies that close to half of the cases have now been
settled and should ease some fears about Vioxx-type
liabilities,” said Deutsche Bank analyst Mark Clark.

He believes the cost is likely to be comfortably covered by
the company’s 2 billion pounds ($2.9 billion) of litigation
provisions.

And the total could be a lot less than that. Assuming the
average pay-out rate of around $86,000 per claimant for the
first 700 cases was applied to all 13,000, the amount would be
just over $1.1 billion.

Merck & Co Inc (MRK.N: ) agreed a $4.85 billion settlement
with plaintiffs in 2007 after its arthritis pain drug Vioxx was
pulled from the market in 2004.

Commercially, Avandia is no longer a major product for
Glaxo, with sales declining sharply following controversy over
the drug’s heart risks in 2007, and the medicine is set to lose
exclusivity in the United States in 2012.

But worries about liability claims have spiked up since
February, when two U.S. Senators published a highly critical
report on Avandia. A Food and Drug Administration advisory panel
will consider possible further restrictions on the drug in July.

In the first quarter of 2010, Glaxo reported increased legal
costs of 210 million pounds, up from 51 million in the year-ago
period, which it said reflected progress towards settling a
number of cases.
Glaxo has consistently defended the safety record of Avandia
and says it acted properly in communicating with regulators and
physicians about the medicine’s potential cardiovascular risks.

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($1=.6852 Pound)
(Editing by Jon Loades-Carter)

Glaxo settles more Avandia lawsuits in U.S.