GlaxoSmithKline’s embattled diabetes drug Avandia suffered a major blow July 17, 2007, when German researchers said the drug may complicate the disease and questioned whether it was ethical to continue researching Avandia when safer alternatives were available.

Known generically as rosiglitazone, Avandia is in the middle of an investigation by the U.S. Food and Drug Administration, which is scheduled to review the drug July 30. One American researcher, Dr. Steven Nissen, published a report indicating Avandia increased the risk of a heart attack by 43 percent.

The ongoing controversy over Avandia has financial analysts humming about the drug’s sales. Even if the FDA allows the drug to remain on the market, analysts are forecasting Avandia’s sales to be down 35 percent in four years.

“Avandia itself is going to struggle whatever happens,” Mike Ward, an analyst at Nomura Code Securities in London, said. “Whether it ever bounces back, even if the [FDA] advisory committee is relatively kind, it’s going to take time.”

Sources: Ben Hirschler, “New study slams safety of Glaxo’s Avandia drug,” Reuters, July 18, 2007; Michelle Fay Cortez and Lisa Rapaport, “Glaxo’s Avandia Pill Faces FDA Warning, Doctor Revolt (Update 4),” Bloomberg, July 19, 2007.