Company Analysis - GlaxoSmithKline
Trouble at the top
The rise of GSK to such a prominent position has unsurprisingly, not been without difficulties. In particular, it suffered the intense media attention surrounding Seroxat, its SSRI, which was approved by the US FDA in 1992 for the treatment of depression. In 2001, just a year after the US $195billion merger of GlaxoWellcome and SmithKline Beecham, the BBC reported on alleged dependency and side-effects sometimes associated with Seroxat use, and suggested an apparent link to suicidal tendancies in adults. In 2004, the FDA placed a black box warning on SSRIs and other antidepressants regarding the risk of potential suicidal thoughts in children and adolescents. A dispute as to whether GSK provided clear guidance as to the potential side-effects of Seroxat has led to approximately 5,000 people in the US suing GSK. In direct contrast, a report resulting from an independent analysis by the UK MCA and other organizations stated that despite the controversial view that SSRI's pose serious dependency issues, this cannot be proven clinically.
In 2004, JP Garnier reported results on a very "difficult year". The fall of its profits by 9% since 2003, prompted GSK to plan for a strategic recovery during 2005.
