Despite being slapped with a record-breaking fine for health care fraud, GlaxoSmithKline’s investors pushed the stock higher on Monday. However, momentum faltered on Tuesday as the stock fell slightly.
The British drugmaker pled guilty to criminal charges and agreed to pay $3 billion in fines for illegally promoting two drugs and failing to report safety data on another.
Paxil and Wellbutrin were being promoted for uses not approved by the U.S. Food and Drug Administration. Paxil was promoted for use in children and Wellbutrin was marketed for weight loss and sexual dysfunction despite the fact that it was only approved to treat depression.
The company also failed to report that its diabetes drug Avandia was linked to heart risks.
Glaxo had expected to pay heavily and actually set aside more than the settlement ended up being, according to Barron’s. The $3 billion fine being less than expected could be one reason why Glaxo’s stock closed up 1.3% on Monday.
At the same time, Glaxo released positive results for its lung drug in four late-stage trials. Given the data, the company will plan to start global filings for the pill around the end of the year.
However, it looks like investors’ optimism is fading a little as the stock price is correcting itself. The stock opened down 0.65%, where it has remained for the morning.
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