GlaxoSmithKline shares have fallen 4% on the news that the firm has been severely criticised by US regulators for inadequate disclosure of data concerning the controversial diabetes drug Avandia.

The US Food And Drug Administration has sent a warning letter to GSK following an inspection at its corporate headquarters in Research Triangle Park, North Carolina. The probe focused on postmarketing reporting requirements relating to Avandia (rosiglitazone) and the company has not complied with FDA regulations.

Specifically, the investigation revealed that between 2001 and 2007, data from 11 clinical studies were omitted from the company's annual reports to the FDA, although the agency acknowledged that the information was disclosed in other ways. Furthermore, the letter stated that nine other studies of the drug were not reported to the agency until September 2007.

The FDA goes on to list GSK’s failings in supplying it with data on Avandia, saying that “specific violations noted in this letter are serious and may be symptomatic of underlying postmarketing safety reporting failures”. The letter states that “you should take prompt action to correct the violations described [and] failure to do so may result in regulatory action without further notice. These actions may include, but are not limited to, seizure and/or injunction”.

The FDA ends by noting that “other federal agencies may take this warning letter into account when considering the award of contracts”. In addition, any pending New (or Abbreviated New) Drug Applications “or export certificate requests submitted by your firm may not be approved until the above violations are corrected”.

GSK responded quickly to the letter saying that the FDA inspection also reviewed the firm’s processes for reporting individual adverse events, “which resulted in no inspection citations”. Also the probe found “nothing to suggest that procedures for prompt reporting of adverse events was compromised”.

Nevertheless, “we take these findings seriously, and corrective steps to make sure we file periodic reports completely and promptly have been taken or are underway,” said chief medical officer Ronald Krall, The company added that after the inspection, it initiated a review of applicable processes and reporting systems, including additional training for employees “to ensure that all procedures are followed across all product lines”.

Warning letter hits Pozen stock too
GSK’s stock was not the only one to suffer, as the warning letter sparked fears among Pozen shareholders that the FDA’s stance could led to a delay in getting approval for the migraine treatment Treximet/Trexima (sumatriptan/naproxen), which is being co-developed with the UK-based drugs major.

The FDA, which has issued two approvable letters on Treximet up to now, is scheduled to decide on the companies' New Drug Application by April 15, though it may delay action for three to six months while GSK addresses the concerns in the warning letter. Pozen shares fell 8.2%.