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Contributors: Douglas McIntyre Jon C. Ogg

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Friday, September 15, 2006

Could GlaxoSmithkline's Avandia(R) End Up Being a Diabetes Vaccine?

This morning (afternoon there) at the diabetes conference in Copenhagen, Denmark, GlaxoSmithkline (GSK) released some embargoed data regarding its Avandia drug for diabetes.

GSK has had Avandia approved by the FDA for type II diabetes in a combination treatment with Insulin since March 2003. Avandia was approved by the FDA for its own usage in non-dual use back in 1999. On a dollar adjusted basis GSK had Avandia "related" sales of about $878 million last quarter alone.

We copied the specific data below from the exact press release, but this is potentially a huge development. This could be the first pre-diabetes "off label" drug out there. "Off label" refers to doctors using an approved drug or treatment for a related ailment even though it has not been officially approved for such usage. While that sounds shady, it occurs with regularity and has been the case for many cancer drugs out there. The drug companies do not offically acknowledge nore do they officially encourage such action, but despite all their warnings and despite all their public statements against you do have to wonder how many "wink, wink, nod, nod" are really given. This is something you could expect GSK to seek approval for from regulatory agencies if the data scales out properly, and you have to wonder how much "off label" usage will occur now and how much has already been done.

GSK said that Avandia reduced the risk of developing type 2 diabetes by 62 percent relative to placebo among people at high risk of developing type 2 diabetes. If this is true it is massive for the company.

GSK already has a market cap of $150+ Billion and even though it is based in the U.K. this is the sort of thing that can actually move a stock of that size. GSK has already traded over 2 million shares, double the 1.04 million ADR's that normally trade in the US. It is more actively traded in the U.K. In the US, only Pfizer and J&J are larger companies in market cap in the drug and medical arena.

Jon C. Ogg
September 15, 2006


BELOW IS THE FULL RELEASE FROM THE COMPANY:

This can be found at http://gsk.com/media/index.htm

Avandia® reduces risk of progression from pre-diabetes to type 2 diabetes by 62 percent in largest ever diabetes prevention trial

Pre-diabetes estimated to affect 300 million people globally

In the largest diabetes-prevention trial ever conducted, Avandia® (rosiglitazone maleate) reduced the risk of developing type 2 diabetes by 62 percent relative to placebo among people at high risk of developing type 2 diabetes. This highly statistically significant reduction of 62 percent (p<0.0001) p="0.15)." p="0.7)." p="0.01)." style="font-style: italic;">....for more data on Avandia side effects and risks and for information on the company please visit the company website at: http://gsk.com/media/index.htm
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