GlaxoSmithKline has reported a 60% drop in profits for 2010 after it paid out £4 billion to resolve legal disputes following claims about the alleged side-effects of some of its drugs.
The pharmaceuticals company has been settling long-standing legal claims, including many relating to its controversial diabetes drug Avandia, which has now been taken off the market in Europe following allegations it causes an increased risk of heart attacks.
Glaxo reported that pre-tax profits slumped 60% to £3.2 billion in 2010, while sales were flat at £28.4 billion. It made a loss of £476 million in the final quarter of the year, in which it paid out £2.2 billion in legal costs.
The company also announced plans to sell off some of its lesser known consumer brands, which are mainly sold in the US and Europe, to allow it to focus on its blockbuster names such as Lucozade, Sensodyne, Horlicks and Panadol.