Glaxosmithkline Share News (GSK)

Panmure Gordon has kept its positive stance on pharmaceuticals group GlaxoSmithKline, despite recent concerns over rising competition from generic drugs, recommending investors to 'buy' on weakness.GSK's share price sunk 2.5% on Tuesday after the US Food and Drug Administration (FDA) published draft guidance for the development of substitutable generic copies of combination inhaled drugs, sparking fears about future sales of the company's best-selling product, Advair. The stock was down a further 0.13% on Wednesday morning at 1,596.5p."Given the share price reaction, these guidelines have been viewed by the market as relatively benign for generics, and they lower the bar significantly," said Panmure analyst Savvas Neophytou.He explained that the new guidelines require relatively simple pre-clinical data backed up by a very short clinical trial. Meanwhile, the FDA only needs bridging data from an asthma trial, even though Advair (and AstraZeneca's Symbicort treatment) is used for both asthma and chronic obstructive pulmonary disease (COPD).In spite of the overall positive outlook for GSK, Neophytou didn't downplay the company's exposure to Advair, which accounts for some 18% of group revenues and 25% of profits.However, he said that there are still a number of process steps and many years before any possible increased competition: "The market has taken a dim view of developments which provide a good entry level into the stock in our view".The broker maintained its 'buy' rating and 1,850p target price for the stock, saying that it has made no changes to its forecasts despite Tuesday's news.Neophytou concluded: "Although not the cheapest, the company has been through the majority of its patent expiries, big liability settlements and boasts a strong balance sheet and very little M&A risk. With shareholder returns remaining strong, we remain 'buyers' of the stock."BC