Despite Q4 losses, GSK may buy back shares

GlaxoSmithKline (GSK) Limited is expected to resume its share buyback programme on Thursday despite loss due to a massive legal charge in the fourth quarter. The investors who had urged GSK to adopt ‘giving cash back’ decision of other major drug companies would greatly welcome this move.

According to Thomson Reuters estimation the giant British drugmaker is believed to reveal its forecast to record a loss of around 6 pence a share in its 2010 results.

On Tuesday following the rival AstraZeneca’s decision to double its 2011 buyback programme to $4 billion, Pfizer said that it is committed to repurchase $5 billion this year.

Many speculate a further sharp revenue turn down because of Avandia, GSK’s controversial diabetes pill and legal charges are expected to wipe out fourth-quarter profits for GSK.

However GSK iterated, to settle Avandia-related claims further and previous U. S. sales practices, that it would take a legal charge of 2.2 billion pounds. But investors are most probably planning to look beyond the profit wipe-out. With the present completion to its herpes drug Valtrex GSK’s sales are expected go down to 7.22 billion pounds ($11.7 billion), which is more than 10%.

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