Too Late to Short Glaxosmithkline

612 views

Published on

http://www.profitableinvestingtips.com/investing-trading/too-late-to-short-glaxosmithkline

Too Late to Short Glaxosmithkline

It may be too late to short Glaxosmithkline (GSK) but so what. The fourth biggest company in “Big Pharma” just pled guilty and will pay a fine of $3 Billion in the largest health care fraud case in United States history. When the settlement was announced the stock fell from $1481 a share to $1487 a share, too late to short Glaxosmithkline. But how is it that a $3 settlement did so little to the price of the stock? It has to do with size and with the market having discounted the bad news. GSK is a British pharmaceutical company, the result of merging British Glaxo Pharmaceuticals with American Smith Kline & French. The company makes vaccines, biological, consumer health care products, and prescription drugs for the treatment of infectious diseases, asthma, diabetes, mental illnesses, digestive problems, and cancer. The company has a market capitalization of around $100 Billion and is the fifth largest company listed on the London Stock Exchange. It has a secondary listing on the NYSE. Although it is too late to short Glaxosmithkline regarding the company’s culpability in unlawful promotion of a number of prescription drugs it is not too late to a little investment research in the company going forward.

Unlawful Promotion of Prescription Drugs

When a prescription drug is OK’d by the FDA or regulatory agencies in other countries it is for a specific purpose such as treatment of diabetes, a type of infection, or a kind of cancer. However, physicians may discover that the drug works well for other purposes. This sort of off label use is common and is legal in the hands of licensed physicians. Such off label is commonly reported in medical journals. However, it is illegal for the drug company to promote these off label uses unless it does the correct studies and passes the new use before the FDA for its approval. The company pled guilty to misrepresenting the drugs Paxil and Wellbutrin, years ago, and not reporting problems with a diabetes drug, Avandia. Apparently the company promoted Paxil, an antidepressant for adults, for use in children under age 18 and essentially bribed physicians to use certain drugs with trips, dinners, and other inducements. When picking new winners and investing in other companies in similar straits investors are well advised to consider the consequences of various company actions and not end up in a situation such as this where it is too late to short Glaxosmithkline.

In the Meantime

While it is too late to short Glaxosmithkline there is still time to invest. While the legal suit was going forward Glaxosmithkline has continued to operate as one of the world’s largest pharmaceutical companies. Like all such companies it does its own research and development in order to find new medications. It also buys out and acquires small startups with interesting products and potential c

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
612
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Too Late to Short Glaxosmithkline

  1. 1. Too Late to Short Glaxosmithkline Bywww.ProfitableInvestingTips.com
  2. 2. It may be too late to shortGlaxosmithkline (GSK) but so what. www.ProfitableInvestingTips.com
  3. 3. The fourth biggest company in“Big Pharma” just pled guilty andwill pay a fine of $3 Billion in thelargest health care fraud case in United States history. www.ProfitableInvestingTips.com
  4. 4. When the settlement wasannounced the stock fell from $1481 a share to $1487 a share, too late to short Glaxosmithkline. www.ProfitableInvestingTips.com
  5. 5. But how is it that a $3 settlement did so little to the price of the stock? www.ProfitableInvestingTips.com
  6. 6. It has to do with size and with themarket having discounted the bad news. GSK is a British pharmaceutical company, the result of merging British Glaxo Pharmaceuticals with American Smith Kline & French. www.ProfitableInvestingTips.com
  7. 7. The company makes vaccines, biological, consumer health care products, and prescription drugs for the treatment of infectiousdiseases, asthma, diabetes, ment al illnesses, digestive problems, and cancer. www.ProfitableInvestingTips.com
  8. 8. The company has a market capitalization of around $100 Billion and is the fifth largestcompany listed on the London Stock Exchange. www.ProfitableInvestingTips.com
  9. 9. It has a secondary listing on the NYSE. www.ProfitableInvestingTips.com
  10. 10. Although it is too late to short Glaxosmithkline regarding thecompany’s culpability in unlawful promotion of a number ofprescription drugs it is not too late to a little investment research in the company going forward. www.ProfitableInvestingTips.com
  11. 11. Unlawful Promotion of Prescription Drugswww.ProfitableInvestingTips.com
  12. 12. When a prescription drug is OK’d by the FDA or regulatory agenciesin other countries it is for a specific purpose such as treatment of diabetes, a type of infection, or a kind of cancer. www.ProfitableInvestingTips.com
  13. 13. However, physicians may discover that the drug works well for otherpurposes. This sort of off label use is common and is legal in the hands of licensed physicians. Such off label is commonly reported in medical journals. www.ProfitableInvestingTips.com
  14. 14. However, it is illegal for the drug company to promote these off label uses unless it does thecorrect studies and passes thenew use before the FDA for its approval. www.ProfitableInvestingTips.com
  15. 15. The company pled guilty to misrepresenting the drugs Paxiland Wellbutrin, years ago, and notreporting problems with a diabetes drug, Avandia. www.ProfitableInvestingTips.com
  16. 16. Apparently the company promoted Paxil, an antidepressant for adults, for use in children under age 18 and essentially bribed physicians to use certain drugs with trips, dinners, and other inducements. www.ProfitableInvestingTips.com
  17. 17. When picking new winners andinvesting in other companies in similar straits investors are well advised toconsider the consequences of various company actions and not end up in a situation such as this where it is too late to short Glaxosmithkline. www.ProfitableInvestingTips.com
  18. 18. In the Meantimewww.ProfitableInvestingTips.com
  19. 19. While it is too late to shortGlaxosmithkline there is still time to invest. www.ProfitableInvestingTips.com
  20. 20. While the legal suit was going forward Glaxosmithkline hascontinued to operate as one of the world’s largest pharmaceutical companies. www.ProfitableInvestingTips.com
  21. 21. Like all such companies it does itsown research and development in order to find new medications. www.ProfitableInvestingTips.com
  22. 22. It also buys out and acquires small startups with interesting products and potential competitors. www.ProfitableInvestingTips.com
  23. 23. GSK has made an offer to buy Human Genome Sciences. www.ProfitableInvestingTips.com
  24. 24. The board has turned them down. GSK is going forward with a hostile takeover by attempting tobuy enough stock to simply put in its own board of directors. www.ProfitableInvestingTips.com
  25. 25. Our discussion about GSK and itstravails with the FDA is meant to provide insight for investors. www.ProfitableInvestingTips.com
  26. 26. Before buying or selling the stock, investors will do well tocarry out their own fundamental analysis. www.ProfitableInvestingTips.com
  27. 27. For more information and tipsregarding profitable investing, visitwww.ProfitableInvestingTips.com.

×