GLAXO <GLX> STOCK OFF ON ULCER REPORT
Shares of Glaxo Holdings PLC fell
following a report in today's New England Journal of Medicine
that antibiotics may be able to treat ulcers, threatening 
Glaxo's billion dlr antiulcer drug Zantac, analysts said.
    Glaxo's was trading at 27-7/8, off 1/2, on volume of
1,786,800 shares. Shares of SmithKline Beckman <SKB>, maker of
the popular anti-ulcer drug Tagamet, also fell 7/8 to 60-1/4.
    "Anything that raises the possiblity of an entirely new
therapy for ulcers would attack the core of Glaxo's worldwide
business, which is Zantac," said David MacCallum, an analyst
who follows Glaxo for Hambrecht and Quist.
   
    Zantac is the world's most prescribed drug with annual
sales of over one billion dollars, accounting for almost 75 pct
of Glaxo's earnings, said MacCallum.
    "If there is any perception that Zantac is not the therapy
of choice for ulcers, Glaxo's sales and profits could decline,"
said Tina Rizopuolos, an analyst with Alexanders Laing and
Or'kshnk.
    Rizopuolos said the New England Journal article, led by a
University of Toronto researcher, concludes from a study of 71
children with gastric disease that bacteria could cause
gastritis and ulcers.
   
    In an editorial in the same issue of the medical journal,
Richard Hornick of the University of Rochester School of
Medicine, reviewed studies using antibiotics to treat ulcers.
Rizopuolos said Hornick concludes that the bacteria ulcer
relationship is "exciting and intriguing," but further studies
are needed to show a direct causal effect.
    Ulcers happen when the stomach's protective lining erodes
and is exposed to underlying inflamed tissue, but it is unknown
what actually causes the process.
   
It is known that stomach acids exacerbate ulcers and therefore
antacids were commonly used to alleviate ulcers before Tagamet
and Zantac came along. Both of these drugs prevent the release
of the hormone histamine in the stomach, which triggers acid
secretion.
    "I don't think people should run out and sell Glaxo," said
analyst Rizopuolos. "It will take a long time to displace
Tagamet and Zantac...those drugs are going to be prescribed by
physicians for a long time," she added.
   
 Reuter
