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GlaxoSmithKline profits hit by Avandia woe

GlaxoSmithKline's full-year pre-tax profits have fallen 60% to £3.2bn.

The drugs giant made a loss of £476m in the last three months of the year, after taking a £2.2bn ($3.5bn) charge to settle further litigation largely relating to its diabetes drug Avandia.

Avandia was banned in Europe because of a suspected link to heart disease.

But in a sign of confidence, Glaxo said it would start buying back its shares again this year, which in theory should increase their value.

This week rival drugs company, Pfizer, said it would close its research and development facility in Sandwich, Kent, with the loss of up to 2,400 jobs.

Glaxo's chief executive Andrew Witty said he had no plans to buy Pfizer's site in Kent but said he was interested in looking at taking on some of the affected staff.

"We don't have any interest in the buildings as we already have a lot of our own facilities.

"I would say that at the appropriate moment we would want to talk to Pfizer about some of the very highly skilled people there and if they want to move to GSK that's something we would look at."

Glaxo also announced plans to sell off some of its smaller consumer brands to allow it to focus on big names such as Lucozade, Sensodyne and Panadol.

Drug sales were down 11% at £7.2bn, but Andrew Witty said the underlying performance of the group was encouraging.

Glaxo suspended its last share repurchase programme in 2008, but investors have urged GSK to restore it in recent months.

Fellow drugs makers AstraZeneca and Pfizer are spending billions on their own share buy back programmes.

BBC News

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