GSK Dips On Patent Extension Rejection

Mumbai, May 24: | Updated: May 25 2002, 05:30am hrs
GlaxoSmithkline’s (GSK) stock price witnessed a decline on Friday, bucking the trend in an otherwise healthy peer group. Dealers said that the stock was the only one in the pharma sector which took a beating, as the pharmaceutical giants’s petition for an extension of a product patent in the US was rejected.

On The Stock Exchange, Mumbai (BSE), the stock closed down 3 per cent at Rs 377.10 on volumes of 26,626 shares, as against its previous close of Rs 388.40.

The stock opened at Rs 390, touched a high of Rs 399 and hit an intra-day low of Rs 372.30.

Said pharma analyst with Pranav Securities, Rohita Sharma: “Glaxo had filed a petition in the US courts seeking an extension of the patent for one of their leading drugs. However, the US court invalidated the petition and this may be a reason for the stock’s downward movement.”

The drug that GSK has been seeking a patent extension is Augmentim which is worth about $2 billion. Augmentim alone accounts for about 7 per cent of GSK’s worldwide sales.

Analysts said that the drug plays a very important role in the company’s overall product profile and due to the rejection of the patent extension, profits of the company may get impacted. On such fears, investors resorted to heavy selling of the stock, added dealers.