Connect with us

Finances

GSK plunges after U.S. court makes Zantac ruling

Published

on

Spread the love

Advertisement

Company logo of pharmaceutical company GlaxoSmithKline is seen at their Stevenage facility, Britain October 26, 2020. 

Matthew Childs | Reuters

Advertisement

LONDON — Shares of British pharmaceuticals giant GSK plunged 9% Monday, after a U.S. court ruled that scientific evidence could be presented in a stack of lawsuits relating to the discontinued heartburn drug Zantac.

The Delaware State Court late on Friday ruled that plaintiffs’ expert witnesses could testify in the roughly 75,000 cases alleging the once-popular drug ranitidine — sold under the brand name Zantac in the U.S. — may cause cancer.

Advertisement

“This case has always been about getting the science in front of a jury,” Brent Wisner, lawyer at the firm Wisner Baum which is representing many of the plaintiffs, said in a statement.

The dispute has been rumbling for years and involves numerous pharmaceutical firms. Zantac was sold by GSK as a prescription drug in the 1980s before transitioning to an over-the-counter medicine after its patent expiry in the late 1990s, with owners including GSK, France’s Sanofi, U.S. firm Pfizer and Germany’s Boehringer Ingelheim.

Advertisement

The drug was withdrawn from European and U.S. markets in 2019 and 2020 after regulators conducted a safety review which raised concerns it contained a probable carcinogen called NDMA.

The companies involved deny there is a scientific consensus that the drug can be linked to any later development of cancers.

Advertisement

In a statement Friday, GSK said it disagreed with the latest Delaware ruling and would immediately seek an appeal.

AstraZeneca is in its 'post-Covid era' as it is set to release 20 new medicines by 2030, its CFO says

It said the decision contradicted the federal court’s multi-district litigation ruling in December 2022, which dismissed all cases alleging five cancer types. It added that the court decision only related to whether the methodology used by the plaintiffs’ experts was sufficiently reliable to be presented as evidence at trial.

“Following the 16 epidemiological studies looking at human data regarding the use of ranitidine, the scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer,” GSK said.

Advertisement

Sanofi, which is named in roughly 25,000 of the 75,000 cases, said in its own statement Friday it was disappointed with the decision not to exclude the plaintiffs’ experts from the cases and that it would also appeal. Sanofi shares were 1% lower on Monday.

CNBC has contacted Pfizer and Boehringer Ingelheim for comment. The Financial Times last month reported that Pfizer has agreed to pay between $200 million and $250 million to settle more than 10,000 Zantac lawsuits in Delaware. CNBC has not independently confirmed the amount.

Advertisement

Analysts at Jefferies had in late May flagged a possible tailwind for GSK after an Illinois jury found GSK and Boehringer Ingelheim were not liable for colorectal cancer in the first Zantac case to reach trial.

Advertisement
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *