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Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Personal injury lawsuits against (NYSE: GSK) over the diabetes drug Avandia post a risk of up to $6 billion, according to analysts at UBS.

The firm still rates GSK stock as a buy.

However, The Associated Press and the U.K. Guardian both reported details of the UBS research note. ()

“Last week, in the wake of a critical Senate report on Avandia, the FDA is scrutinizing Avandia’s cardiovascular risk profile. As US Avandia contributes 1% to sales, our concerns are solely on personal injury lawsuits,” the UBS note written by Gbola Amusa said as quoted by the Guardian. “Experts we polled suggest Glaxo’s liability is in the range of $1bn to $6bn. We expect liability below the midpoint of this range and note Glaxo has underperformed by around $2.5bn already.”

Even though the FDA has said Avandia patients should keep taking the drug until they consulted with a healthcare provider, UBS said the FDA will be under pressure to pull it from the market.

“[N]on-scientific political pressure from Congress will likely be as important as science at FDA in the coming months; and, product withdrawal, if it occurs, could put GSK at the top end of our liability range,” UBS added. “Bellwether trials start from 1 June and will help narrow our liability range.”

UBS said GSK faces more than 13,000 lawsuits.

A county in California has also filed suite against GSK.

GSK, which bases its U.S. headquarters in RTP, has strongly defended Avandia and criticized the Senate report. ()

The FDA added a warning about potential heart attacks to Avandia in 2007, but the scope of that risk is still not fully understood.