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GSK's weight loss product to hit US stores but Avandia lawsuit looms

GSK has announced that alli, its FDA-approved OTC weight loss product, will be on the shelves of pharmacies and other approved outlets in the US this week

GlaxoSmithKline (GSK) has announced that alli, its FDA-approved over-the-counter (OTC) weight loss product, will be on the shelves of pharmacies and mass merchandisers in the US this week.

Alli is sold as an aid to overweight adults undergoing a weight loss programme and is being supported by a multicultural and bilingual educational effort. Consumers will have access to an individualised online action plan with a year's worth of lessons included in each alli purchase, at www.myalli.com.

The OTC product is a half-dose version of Roche's prescription drug Xenical (orlistat) and works by reducing the amount of fat the body absorbs from food.

In April 2007, GSK Consumer Healthcare selected 400 overweight women and men to be part of the alli First Team. Members were invited to participate in an online community focused on following the alli programme, sharing personal experiences, and supporting other community members to be successful.

For participating in the alli First Team, people received educational materials and tracking tools, access to the online community of alli users and a six-month supply. alli works by blocking 25 per cent of fat in the foods eaten which reduces the amount of fat and calories absorbed. The drug must be used in conjunction with a reduced-calorie, low-fat diet.

GSK says it hopes alli will be on sale in the EU in 2008 and added that the launch will be one of the largest the company has ever undertaken. Analysts have predicted that GSK will need to spend around USD 150m in 2007 to market the product, which must be taken in conjunction with a low-fat diet. It will retail at between USD 55 to USD 60 for a month's supply.

Avandia lawsuit filed in US
The positive news was overshadowed by the fact that GSK faces a lawsuit from US investors, who claim that it deliberately misled shareholders about Avandia's cardiac safety profile.

The law firm Kaplan Fox & Kilsheimer has filed a class action suit in the US District Court for the Southern District of New York against GSK, which claims the company made false statements. The suit was brought about for those who purchased shares in the company between 27 October 2005 and 21 May this year, with plaintiffs given 60 days to act.

The suit states that GSK failed to adequately disclose the fact it had performed a meta-analysis (a pooled analysis of several clinical trials) of Avandia, which showed an increased risk of cardiac damage.

GSK countered by saying that it would vigorously defend its medicine: "GSK has acted responsibly, transparently and with the best interest of patients in mind. Fair examination of the company's record will show that GSK has been transparent in its efforts to thoroughly study the safety and effectiveness of Avandia, and to communicate that information to governments, regulatory authorities, scientific peers, physicians and others in a variety of ways."

Even though the lawsuit has cast addition gloom on GSK, market analysts have maintained their positive stance, mainly due to the company's strong pipeline of drugs. The breast cancer drug Tykerb (lapatinib), which was launched in the US in March 2007, is seen as a potential blockbuster for the firm. Bank of America analysts have predicted that annual Tykerb sales will reach nearly USD 1bn by 2011.

14th June 2007

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