GlaxoSmithKline is expected by analysts to report a fall in revenue of more than £100 million after a collapse in sales of Avandia, its diabetes medicine, which has been linked to an increased risk of heart attacks and strokes.

Britain’s biggest drugmaker is due to unveil its interim results tomorrow, its first quarterly figures since a controversial study by leading cardiologists claimed that the drug raised the risk of heart attack by 43 per cent.

Since the report was published in May, prescriptions of Avandia, GlaxoSmithKline’s second top-selling product, have slumped.

Analysts, on average, believe that global sales of the drug during the three months to June 30 have fallen by 23 per cent to £367 million, from £477 million in 2006.

Morgan Stanley, the American investment bank, forecasts even lower quarterly sales for Avandia of about £363 million.

“Early indicator data suggest prescriptions will fall 45 to 50 per cent before bottoming out in the US,” said Mark Purcell, European pharmaceuticals analyst for Deutsche Bank.

GlaxoSmithKline has mounted a vigorous defence of the drug, which generated sales of £1.4 billion in 2006.

However, the crisis threatens to overshadow the final months of Jean-Pierre Garnier, the company’s chief executive, who is due to step down from his post next May.

His reputation now hangs on the outcome of a decision by the US Food and Drug Administration advisory committee.

It will meet next week to consider three options: to ban the drug; to impose strict rules governing its sale, such as the inclusion of “black box” warning labels, or to delay making a decision until further data is available.

Whichever course is taken, the committee’s decision will have big implications for Glaxo’s future earnings.

However, the crisis over Avandia is not the only problem on Dr Garnier’s desk. The company is also struggling in the face of a weak dollar, which has eroded the value of its sales across the US, the world’s largest pharmaceuticals market. Overall, the company is expected to report lower revenues and little change in earnings per share compared with last year.

In its second-quarter 2006 results, GlaxoSmithKline reported overall pretax profits of £1.9 billion on turnover of £5.8 billion and 23p in earnings per share.

Frustrated by the sluggish performance of its shares, Glaxo has already faced pressure from investors to consider a sale of its consumer healthcare unit, which includes the drinks brands Ribena and Lucozade, Aquafresh toothpaste and Nicorette antismoking patches.

Three internal candidates are in the frame to replace Dr Garnier, including Glaxo’s European chief, Andrew Witty, his American counterpart, Chris Viehbacher, and the operations head, David Stout.

GSK’s best-sellers

Advair (asthma): £3.3 billion, 2006

Avandia (diabetes): £1.4 billion

Lamictal (epilepsy): £996 million

Welbutrin (antidepressant): £900 million

Valtrex (herpes): £845 million

Zofran (cancer drug): £847 million

Coreg (blood pressure): £779 million

Seroxat (antidepressant): £620 million

Combivir (HIV): £528 million

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