SmithKline defends its new diabetes drug

SMITHKLINE BEECHAM has sent a letter to US doctors in a bid to quash rumours surrounding its new Avandia drug, a treatment for type II diabetes widely hailed as the company's blockbuster drug.

"We have sent a letter to a small group of fairly technical doctors basically saying there's misinformation around," said a spokeswoman for the company. "We send letters to doctors all the time keeping them informed about our products."

The company declined to give details of the letter, said to cite a case in which a patient taking Avandia died of liver failure.

The spokeswoman said: "Rumours of this nature began circulating in the US prior to the launch of Avandia. We have received no reports of deaths which we believe are attributable to Avandia."

Analysts dismissed the notion Avandia was to blame for the alleged fatality. One said: "There's no reason to suppose it wasn't because of factors isolated from Avandia."

The market for type II diabetes treatments is becoming more competitive. Avandia is a replacement for US-based Warner-Lambert's drug Rezulin, whose application was limited after it was linked to liver toxicity in around one in 50,000 patients.

Since its launch in June, there have been 215,000 Avandia prescriptions. New prescriptions last week topped 6,000 and are expected to overtake Rezulin within weeks. Actos, a rival manufactured by Eli Lilly, the US pharmaceuticals group, came to the market in July. Its prescriptions in its fourth week were just 500. Lehman Brothers expects Avandia and Actos to have sales of $1.8bn and $2bn respectively in 2004/5.

SmithKline shares closed down 21.5p at 789p yesterday, having earlier fallen to 767p. Rumours swept the market that the US Food and Drug Association was preparing a note to doctors about Avandia. SmithKline said there had been no "dear doctor" letter from the FDA.

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