Glaxo reinvents old drugs in effort to save sales

LONDON As a result of a struggling market, GlaxoSmithKline has turned its attention toward reinventing old drugs to treat different ailments, rather than making new drugs, according to published reports.

The company usually modifies the uses of the drugs right before the original drugs’ patents expire and face generic competition. This strategy has proven useful, since it accounts for 27 percent of the company’s sales growth. Recently, Glaxo remade its drug Imitrex, a painkiller whose patent will expire this year, into Treximet, which treats migraines, and has been approved by the Food and Drug Administration.

Although Glaxo has found new ways to offset its losses to generic competition, the company still had a 10 percent decrease in profit in the fourth quarter and expects its earnings per share to fall as well because of generic competition and a decrease in sales for its diabetes drug, Avandia, according to published reports.

Shares for Glaxo also have dropped 28 percent in the London Stock Exchange and 15 percent in the Dow Jones Wilshire Global Pharmaceutical Index. Glaxo’s is not the only company facing challenges though, as the pharmaceutical industry in general has been facing a decline in sales, according to published reports.

According to published reports, factors that have contributed to these problems are a lack of productivity in labs researching and developing new drugs, companies trying to target more complex diseases and facing tougher regulations to approve new drugs.

Although Glaxo has been undergoing rough changes Glaxo’s chief executive officer, Jean Pierre Garnier feels that there will be a positive change in later years. ``When we get around to 2011 and 2012, we'll be in a much stronger situation," he said. "We'll have fewer products going generic and more in terms of new products.' An example of its hope for positive change is Glaxo’s recent approval from the FDA for a new breast cancer drug and a vaccine used to fight rotavirus.