A New York law firm Kaplan Fox & Kilsheimer LLP, has filed a class-action lawsuit against pharmaceutical giant GlaxoSmithKline which is making hectic preparations to launch its new over-the-counter weight loss capsule Alli. The lawsuit was filed on behalf of the US investors who are claiming that the drug maker misled shareholders about the safety of its diabetes drug Avandia.

According to reports, the suit that was filed in US district court for the southern district of New York, says the company "Failed to adequately disclose information. It had on an increased risk of heart attacks associated with the drug. The information from a study of clinical trials was given to the US Food and Drug Administration but never adequately disclosed to the investing public".

The company has faced scrutiny over Avandia, a $3 billion drug in 2006, since last month, when a study in the New England Journal of Medicine concluded that the drug left patients with a high risk of heart attacks. Glaxo has fought back hard against the claims, saying the New England Journal study was flawed.

According to reports, a spokesman for Glaxo said, the company would vigorously defend its medicine. "GSK has acted responsibly, transparently and with the best interest of patients in mind," he said. "Any fair examination of the company's record will show that GSK has been transparent in its efforts to thoroughly study the safety and effectiveness of Avandia, and to widely communicate that information to governments, regulatory authorities, scientific peers, physicians and others in a variety of ways".

The suit is on behalf of investors who bought the company's securities between Oct. 27, 2005, and May 21, 2007.

Shares in Glaxo have been tumbling since a study published in May linked Avandia to an increased risk of heart attack. Although Glaxo disputes the findings, sales and prescriptions of the drug, which is the company's second-best seller, have been falling.