GlaxoSmithKline mounted a vigorous defence of Avandia, its diabetes drug, yesterday after the company’s shares hit a two-year low amid safety fears.

In a letter to The Lancet medical journal, Ronald Krall, GlaxoSmithKline’s medical director, said that data from long-term, large-scale trials of Avandia had indicated that the risk of heart attack associated with the drug was similar to two other commonly used generic diabetes medicines, metformin and sulfonylurea.

Mr Krall’s comments were published hours after Merrill Lynch had issued a “sell” note on the stock. It said that adverse publicity surrounding the drug, which has been linked to an increased rate of heart attacks, would undermine sales for at least two years even if GlaxoSmithKline, Britain’s largest pharmaceutical company, was not forced to withdraw it from the market.

The report has sent shares in GlaxoSmithKline crashing 13 per cent over the past nine days to lows of £12.69 yesterday. They rebounded slightly to £13.13 after the letter was published.

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Avandia is GlaxoSmithKline’s second-bestselling medicine after Advair, the asthma drug, and generated $3.2 billion in sales last year. A report published in The New England Journal of Medicine ten days ago suggested that it raised the risks of heart attack by 43 per cent and the risks of heart death by 64 per cent.

Since then, Glaxo has shed more than £9 billion in value, or 13 per cent, amid fears of plunging profits and the risk of hugely expensive US litigation.

In his letter to The Lancet, Mr Krall attacked the methodology in The New England Journal of Medicine study. He pointed out that the actual number of heart attacks in this “meta-analysis” of 42 clinical studies represented a very low frequency of events – only 0.6 per cent for both the Avandia and the control group.

There were 86 out of 14,371 patients in the Avandia section and 72 out of 11,634 in the control group.

Mr Krall’s letter referred to two medical trials that had been published previously, known as ADOPT and DREAM, and findings from another as-yet unpublished study of more than 30,000 diabetic patients. He said that they showed the incidence of hospitalisations for heart attack for patients on Avandia was the same as for other diabetes treatments.

Navid Malik, pharmaceutical analyst at Collins Stewart, echoed Mr Krall’s remarks. “The meta-analysis conducted recently has a number of significant flaws, as it gives all studies equal weighting,” he said. “We believe that it is still too early to determine the impact on Avandia.”

Steven Nissen, the respected American cardiologist who oversaw the controversial report in The New England Journal of Medicine, has acknowledged that more studies are needed on Avandia. However, he told The Times last week he was confident that, in time, his analysis of the drug would be vindicated.

America’s Food and Drug Administration published a safety alert on the drug last week but is evaluating the data and a further announcement is expected soon.

There are fears that two long-term studies of the drug that are not due to be completed until 2009 may face patient recruitment problems after Dr Nissen’s study. Rival medicines to treat type-II diabetes, including Januvia, by Merck, and Byetta, of Eli Lilly, are expected to benefit from any decline in Avandia sales.

— Also known as Rosiglitazone, Avandia is an antidiabetic drug for type-II diabetes, the type often linked with obesity

— About six million people worldwide have taken the drug since its launch in 1999

— Sales were $3.2 billion in 2006

— In February, GSK warned the drug was linked with a greater incidence of fractures of the upper arms, hands and feet in female diabetics

— Last week, a report in the New England Journal of Medicine linked the drug to a 43 per cent increase in heart attacks and a 64 per cent increase in heart death

— Diabetes is estimated to affect more than 5 per cent of the developed world’s population

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