Why GlaxoSmithKline (GSK) Stock Is Falling Today

NEW YORK (TheStreet) -- Shares of GlaxoSmithKline Plc (GSK) are down 0.71% to $46.45 in pre-market trade after it was reported that a U.S. anti-bribery probe into the company touched on the firm's Chinese consumer healthcare business in 2012, internal documents show, suggesting the drugmaker's compliance problems in China could be wider than previously revealed, Reuters reports.

GSK confirmed it had conducted an investigation into procurement practices in consumer healthcare in China, but said it did not find any "unethical conduct". It said the inquiry was unrelated to a Chinese criminal investigation into corruption in its pharmaceuticals division that was made public last year, Reuters said.

Three "preservation notices" seen by Reuters show GSK was conducting a focused investigation into specific people and suppliers in China at least as far back as 2012.

 
The investigation was related to a Justice Department and SEC inquiry into possible violations of the anti-bribery Foreign Corrupt Practices Act.
 
"We rate GLAXOSMITHKLINE PLC (GSK) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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