GSK share price subdued as UBS abandons ‘buy’ rating

Shares in GlaxoSmithKline (LON:GSK) have fallen into the red as UBS lowered its rating on the blue-chip group. In a separate development, the Serious Fraud Office (SFO) dropped an investigation in the company.

As of 13:21 GMT, GSK’s share price had given up 0.42 percent to 1,531.60p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.51 percent higher at 7,203.98 points. The group’s shares have added more than 17 percent to their value over the past year, as compared without about a 0.5-percent fall in the Footsie.

UBS trims rating on GSK

UBS abandoned its ‘buy’ rating on GSK today, downgrading the stock to ‘neutral,’ amid concerns over the blue-chip group’s majority-owned HIV ViiV Healthcare business. Proactive Investors quoted the analysts as explaining that there was investor concern over the unit’s performance in the current year, which, they reckon, is “a time when there are also questions over what the pharma division can deliver and when”.

“ViiV is stepping up in terms of commercial activity but we think growth for Triumeq (one of tis HIV drugs) in particular will be more subdued than consensus currently accounts for,” the broker pointed out.

The broker further trimmed its price target on the shares from 1,700p to 1,650p.

SFO drops investigation

In a separate GSK development, the SFO announced today that it had closed its GSK case, which focused on commercial practices  by the company, its subsidiaries and associated persons.

“Following a detailed review of the available evidence and an assessment of the public interest there will be no prosecution in this case,” the SFO said. GSK noted the announcement, saying that it was “pleased that the SFO have closed their investigation and concluded that no further action is required”.

As of 14:15 GMT, Friday, 22 February, GlaxoSmithKline plc share price is 1,531.60p.