Challenges Surround GlaxoSmithKline

As Big Pharma companies have stumbled in recent years, GlaxoSmithKline(GSK Quote) has been a virtual fortress for drug industry investors.

Look at stock activity at various intervals -- two years, one year, six months and three months -- and you'll see that GlaxoSmithKline has outperformed the Amex Pharmaceutical Index of Big Pharma stocks at every turn except the three-month period. In all but the two-year time frame, the company has also outpaced the S&P 500 index.

Now, however, a few cracks are appearing: A suspension of testing on a multiple sclerosis drug, a long-running dispute with the Internal Revenue Service and a U.S. investigation into Medicaid pricing are viewed by analysts as probably small chips in the fortress. But the recent seizure by the U.S. government of two products because of manufacturing problems could represent a full-fledged fissure. ...