Broker snap: Glaxo to shrug off legal tribulations

GlaxoSmithKline's (GSK) latest legal charge has not persuaded financial services firms Matrix to change its 'buy' rating on the stock as the broker believes that the pharmaceuticals giant will emerge from the latest lawsuits in a stronger position.On Monday GSK announced a new legal charge of £2.2bn (to be taken in the fourth quarter results) related to sales and marketing investigations surrounding its diabetes drug Avandia. This follows a legal charge of £1.57bn announced in the second quarter last year, related to Avanda litigation and a number of other manufacturing violations."This new charge is much higher than we had expected, but is related to the fact that GSK is taking a highly conservative view on the various outstanding litigations in order to draw a line beneath them," said analyst Navid Malik."Despite this negative news, we believe the market is likely to focus on GSK's low patent-exposure risk, maturing pipeline, with multiple launches in current years, and growth opportunities related to biologicals (within its vaccines business) and emerging-markets business," added Malik.Matrix retains its 'buy' and target price of 1,418p.