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Glaxo leads drug stocks lower

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Monday, 22 February 2010 18:52

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BOSTON (MarketWatch) - GlaxoSmithKline PLC led drug stocks lower early Monday, as shares of the U.K. drugmaker fell on renewed worries that its diabetes drug Avandia might be pulled off the U.S. market over safety concerns.

The NYSE Arca Pharmaceutical Index /quotes/comstock/10t!drg.x (DRG 304.05, -1.69, -0.55%) and the NYSE Arca Biotechnology Index /quotes/comstock/10t!btk.x (BTK 1,038, +12.30, +1.20%) were both down nominally at 305.31 and 1023.62, respectively.

Shares of Glaxo /quotes/comstock/13*!gsk/quotes/nls/gsk (GSK 37.40, -0.86, -2.25%) were down 2% at $37.48.

A Senate report released over the weekend once again questioned the safety of Avandia and criticized Glaxo's handling of certain safety information. The report also revealed that some key U.S. Food and Drug Administration officials have pushed to have Avandia taken off the market, according to The Wall Street Journal.

In 2007, an FDA advisory panel voted to keep Avandia on the market, but with sterner warnings. Glaxo later that year included a so-called "black box" warning on Avandia's label advising that it should be prescribed with caution to patients with heart disease or who are at risk of a heart attack. The product also has a label advising it can trigger or exacerbate heart failure in some patients.

Once the world's top-selling diabetes drug, Avandia is slated to lose patent protection around 2012. The FDA is reportedly planning another advisory panel meeting to further discuss Avandia's safety issues.

Early Monday, Genzyme said that Icahn Partners LP and some of its affiliates have informed the embattled biotechnology company that they intend to place four names in nomination for Genzyme's board at the company's annual meeting on May 20. The four nominees include Carl Icahn, Steven Burakoff, Alexander Denner and Richard Mulligan. Genzyme noted that all of its nine directors are up for reelection.

"Our actions demonstrate that we are open and responsive to shareholder input, and we welcome a constructive dialogue with Mr. Icahn," said Henri Termeer, Genzyme's chairman and chief executive officer, in a statement.

Icahn and his associates have been quietly buying shares of Genzyme, and reportedly now own about 4.8 million shares. Genzyme's management has been under considerable pressure in recent months due to the temporary shut-down of a critical manufacturing facility due to contamination concerns.

Val Brickates Kennedy is a reporter for MarketWatch in Boston.
 

2 stores pull necklaces on toxic cadmium concern

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Friday, 05 February 2010 23:08

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LOS ANGELES (AP) -- The teen fashion chain Aeropostale and outlet stores of upscale Saks Fifth Avenue have pulled from shelves necklaces that an environmental group's tests showed have high levels of the toxic metal cadmium.

 

Aeropostale, Inc. went one step further, saying Thursday that from now on, no amount of cadmium will be acceptable in its jewelry -- and that suppliers will have to prove products are clean with independent lab testing.

 

The announcements are the latest fallout from an Associated Press investigation which last month reported some children's jewelry is contaminated with cadmium, a known carcinogen that also can harm bones and kidneys.

 

In response to that reporting, the California-based Center for Environmental Health tested adult jewelry bought at stores including Aeropostale and Saks' Off 5th outlets, and this week threatened to sue the retailers after lab results showed between 25 and 75 percent of the items' total weight was cadmium.

 

The announcement from Aeropostale was significant because it represented the first time a company has said it is effectively banning cadmium in adult jewelry. Aeropostale has more than 900 locations in the United States and Canada.

 

Cheap metal jewelry worn by children and typically imported from China has to date been the focus of reaction by federal regulators, lawmakers and retailers. Kids are of particular concern because they bite or suck on jewelry and thus are more likely to be exposed to any cadmium it contains.

 

What risk adults may face isn't clear. Typically the metal requires long-term exposure to cause problems. The amounts adults might ingest from cadmium-contaminated jewelry are presumably lower than children because the route into the body is less direct -- microscopic amounts could shed onto the hands of an adult who handles a necklace, and then be ingested either during eating or putting a contaminated finger to the mouth.

 

Saks and Aeropostale came under scrutiny after the Center for Environmental Health took samples from products sold at a range of retailers. Tests determined that jewelry at four retailers, including Saks and Aeropostale, had high levels of the substance.

 

The item Aeropostale pulled was a men's necklace that the environmental group's testing showed had a circular pendant with high levels of cadmium. It was made in India.

 

"Aeropostale's top priority is our customers and the quality of our merchandise," the company said in a statement. "Customers can return the necklace to any Aeropostale store and we will safely dispose of it. Further, we have notified our vendors that, effective immediately, all jewelry must also be tested for cadmium, in addition to our existing testing protocols, at an independent lab. We will not accept any product that contains cadmium."

 

Saks Inc. offered little reaction on Tuesday, when the center released results of high-cadmium items that included a black-colored link necklace which sold for $69.99, marked down from $149.99 according to the label.

 

 
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