WHAT INVESTORS SHOULD KNOW ABOUT AVANDIA

In order to stay up-to-date with the latest news and opinion about the brewing scandal surrounding diabetes drug Avandia, many people are turning to the blogosphere.

Science Blog provides some of the details surrounding the controversy “The U.S. Food and Drug Administration says it is aware of a potential safety issue related to Avandia (rosiglitazone), a drug approved to treat type 2 diabetes,” the author of the post also adds that, “safety data from controlled clinical trials have shown that there is a potentially significant increase in the risk of heart attack and heart-related deaths in patients taking Avandia”

The Schwitzer HealthNews Blog, well-respected for its insightful opinions, boldly asks “Is Avandia the heart risk sequel to Vioxx?” The article's author also gives some background on the reason for the controversy by stating that the controversy stems from a “New England Journal of Medicine article by Steven Nissen of the Cleveland Clinic showing that the heavily marketed diabetes drug Avandia from GlaxoSmithKline increases heart attack risk in the millions of patients who have ta ken it.”

The effect is also being felt on Wall Street.

Zacks Investment Research, a highly-trafficked blog known for its equity research and analysis, published a post about an hour before the final bell. The post's author stated that “with new concerns being published regarding the possible risks of one of its key drugs, big-pharma giant GlaxoSmithKlinehas been lowered from a Buy to a Hold by Zacks senior pharmaceuticals analyst Jason Napodano, CFA.”

Napodano goes on to comment on why the lowered GSK's status. “We believe that the issues surrounding Avandia will continue to weigh on the stock going forward. As such, we are downgrading our recommendation from Buy to Hold with a reduced price target of $57 per U.S. ADR [American Depositary Rec eipt]. Our price target is based on 15x our Fx [foreign exchange]-adjusted $3.81 estimate in 2007.”

A wide-ranging controversy such as this one makes its presence felt in a variety of different industries. One of the best ways to stay informed on such a polarizing issue is to read about it for yourself through the broad-based world of blogs.

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