Thousands more Avandia lawsuits are off GlaxoSmithKline's (NYSE: GSK) to-do list. The company says it has settled consolidated cases--an estimated 5,000 of them--that had been slated for court in Philadelphia later this month.
This is the second Avandia settlement in less than a month. GSK dispensed with 700 suits in May, promising to pay a total of $60 million to those plaintiffs. The financial terms of this latest settlement weren't disclosed.
So, GSK looks to be facing a legal liability that's much smaller than some industry-watchers had feared. As Reuters notes, analysts estimate that the company faces some 13,000 claims over the embattled diabetes drug, and some had predicted damages from those claims of up to $6 billion. Now, thanks to these two settlements, they're expecting much less.
"This implies that close to half of the cases have now been settled and should ease some fears about Vioxx-type liabilities," Deutsche Bank's Mark Clark tells the news service. If the settlement amounts parallel those in the first deal--about $86,000 per plaintiff--that would work out to about $1.1 billion. Merck agreed to a $4.85 billion settlement of claims stemming from its withdrawn drug Vioxx.
This is just the latest installment in the Avandia saga, which began back in 2007 with a now-infamous study that linked the diabetes drug with an increased risk of heart attack and other cardiovascular side effects. The drug's sales began to fall, and they've never recovered. Meanwhile, a head-to-head study of Avandia and its rival drug Actos (Takeda) has been criticized of late--some say it should be stopped--and the FDA is revisiting the drug in a hotly anticipated advisory panel meeting next month.