Glaxo to cut $1.4B on falling sales

The axe is about to fall at GlaxoSmithKline. The drug maker reported a 5.8 percent drop in profits to $2.77 billion--partly due to generic competition, but largely from a 48 percent slide in Avandia sales. Next: A three-year, $1.4 billion cost-saving plan that will include job cuts.

From whence might those cuts come? Avandia's sales force, for starters, or so company sources have been saying. London's Times newspaper reports that Glaxo has been waiting to decide about the sales team until the FDA finalizes safety warnings on Avandia's product label.

Well, now we know what the FDA wants. The Wall Street Journal reports that the agency is pushing Glaxo toward a "black box" warning of increased heart attack risk. Avandia already carries a black box about heart-failure risk; pointing out heart-attack dangers would be another blow to its fortunes.

- see Glaxo's quarterly results (.pdf)
- read the London Telegraph article
- here's the sales-force story from the Times of London
- read the "black box" report from the Wall Street Journal