Since he took over GlaxoSmithKline P.L.C. in early 2001, Jean-Pierre Garnier has shaken up the monolith, engineering earnings-per-share growth of 13 percent per year. The pipeline of soon-to-arrive drugs, which stood at fewer than a handful when he arrived, now bulges with 31 compounds nearing approval. So writes Karl Stark
Yet one big performance indicator - the stock price - continues to lag. The company has performed better than most of its peers, but its U.S. shares are about where they were six years ago.
Then there is the still-smoldering controversy over the diabetes drug Avandia. The firm's rebounding shares were socked in late May when researchers linked Avandia, GlaxoSmithKline's second-best-selling drug, to an increased risk of heart attacks. Since then, Avandia's share of new prescriptions has plummeted two-thirds, falling from 15 percent to 5 percent, according to surveys by Mount Laurel-based ImpactRX Inc. Yesterday, the company's shares closed at $51.30, down 78 cents. The shares are down 3 percent so far this year.
That study was not the only hit the drug took. John Buse, the incoming president of the American Diabetes Association, told Congress last month that he was threatened by a top company executive in 1999 after he, too, had linked Avandia to heart problems. Buse, a diabetes specialist, said he was blamed for sinking the company's stock. He eventually implored the company in a letter to "please call off the dogs. I cannot remain civilized much longer under this kind of heat."
Garnier called the critical study that came out in May "a good diagnostic tool," but said: "It can raise questions; it cannot provide answers." In what he described as the company's more thorough tests, "Avandia looks pristine," he said.
The pharmaceutical industry has long been one of the biggest contributors to political candidates. Garnier downplayed his company's contributions. Of $1.1 million in PAC and employees contributions made for the 2006 elections, GlaxoSmithKline gave 69 percent to Republicans and 30 percent to Democrats, according to an analysis by the Center for Responsive Politics.
About 5,400 employees give voluntarily to the company's PAC, or political action committee. Twenty GlaxoSmithKline employees on the PAC board decide who gets the money. "It's the employees who decide what they want," Garnier said. "It's like United Way.
"We are totally neutral," he continued. "We care about issues; we don't have a political color."
Garnier, a registered Republican, gave $2,000 to former U.S. Sen. Rick Santorum (R., Pa.) in October 2005, the center reported. He also gave $2,000 earlier that year to a local Democrat, U.S. Sen. Tom Carper (D., Del.)
"I give contributions," he said, "to people who support our positions on issues."
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