GlaxoSmithKline A Hold On Avandia Issue

GlaxoSmithKline (GSK) is the world’s second largest pharmaceutical company, with global operations based in the U.K. and the U.S.

Although Glaxo has made significant progress with its late-stage pipeline, we are worried about the recent negative news surrounding the company’s second-largest-selling drug, Avandia, as well as generic competition to several other products. Sales of Avandia have plummeted, but we think they’re close to bottoming.

We think Glaxo possesses one of the stronger late-stage pipelines in large-cap pharma but believe the shares will remain constrained until there is more visibility on the Avandia issue. Our price target is $41.

Report By Brian Marckx. Jason Napodano, CFA contributed to this report.

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