Glaxo drug wins wider US approval: Warner-Lambert sales threat - Clinton eases healthcare stance

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The Independent Online
US REGULATORS yesterday gave Glaxo approval for wider use of Zofran, its anti-nausea drug.

However, there was mixed news for Warner-Lambert, the giant US pharmaceuticals company. US regulators have approved Cognex, its key Alzheimer's medicine, but the company faces lost sales of dollars 150m after being ordered to improve drug manufacturing and testing facilities at six factories.

Glaxo shares rose 36.5p to 558p after the US Food and Drug Administration cleared the way for the marketing of Zofran injections for the prevention of post-operative nausea and vomiting. Zofran has been available in the US since 1991 for the prevention of nausea induced by chemotherapy.

Zofran's introduction to the larger post-operative market was good news, Jackie Cantle, analyst at Smith New Court, said, but it was too early to estimate the effect on its sales.

The FDA approval will not affect Glaxo's full-year figures, due on 9 September, when analysts expect pre-tax profits of about pounds 1.65bn against pounds 1.43bn last time.

Zofran is already approved and available for use in 17 countries for post-operative nausea and vomiting, and in 70 countries for side-effects of cancer chemotherapy.

Analysts sensed a shift in President Bill Clinton's tough stance on healthcare reforms in the United States.

Strengthening pharmaceutical share prices - Wellcome rose 34p to 678p and SmithKline Beecham 16p to 448p - reflected optimism about Mr Clinton's healthcare reforms.

Analysts said there appeared to have been a shift in US sentiment towards battered drugs stocks following gains in New York yesterday.

They were relieved that the President's latest speech on healthcare reforms, on Monday, made no specific reference to drug prices.

Meanwhile, several US analysts cut earnings forecasts for Warner-Lambert after it was told by the FDA to hire outside experts to evaluate facilities at six plants in the US and Puerto Rico.

Some plants could close temporarily, causing some products to be taken off the market.

A spokesman said: 'The sales loss will result from the discontinuation of some lower volume prescription products and losses related to interruptions of product distribution.'

The company said it expected its over-the-counter drugs to remain available.

Critical medical drugs would continue to be manufactured.

Jerry Brimeyer of Lehman Brothers said that if the factories were all up and running by the end of the year there should be little earnings impact in 1994.

Analysts said it was unlikely to affect the recent announcement that Glaxo and Welcome were linking up with Warner-Lambert to supply pharmaceuticals in the US.