GSK plunges after US court ruling on Zantac

LONDON — Shares of the British pharmaceutical giant GSK plunged 9% on Monday, after a US court ruled that scientific evidence could be presented as a stack of lawsuits linked to the discontinuation of the heartburn drug Zantac.

On Friday evening, the Delaware state court ruled that the plaintiffs’ expert witnesses could testify in the nearly 75,000 cases alleging that the once-popular drug ranitidine – sold under the brand name Zantac in the United States – could cause cancer.

“This case was always about putting the science before a jury,” Brent Wisner, an attorney with the Wisner Baum firm who represents many of the plaintiffs, said in a statement.

The conflict has been going on for years and involves many pharmaceutical companies. Zantac was sold by GSK as a prescription drug in the 1980s before transitioning to an over-the-counter drug. After its patent expired in the 1990s, it was sold by companies including French. Sanofithe American Pfizer and the German Boehringer Ingelheim.

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

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

In a statement released Friday, GSK said it disagreed with Delaware’s latest decision and would immediately appeal it.

He said the ruling contradicted the federal court’s December 2022 multi-district litigation ruling, which dismissed all cases alleging five types of cancer. She added that the court’s decision focused solely on whether the methodology used by the plaintiffs’ experts was reliable enough to be presented as evidence at trial.

“Following 16 epidemiological studies involving 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 cancer,” GSK said.

Although the majority are in Delaware, a smaller number of complaints against various companies are heard in California, Illinois and Pennsylvania.

In late May, Jefferies analysts flagged a possible tailwind for GSK after an Illinois jury found that GSK and Boehringer Ingelheim were not liable for colorectal cancer in the first Zantac case to go to trial.

GSK, the company most exposed to these cases, could face settlement costs ranging from $1 billion to more than $3 billion, according to a series of analyst notes cited by Reuters.

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

Pfizer told CNBC on Monday that it was involved in a “fraction” of Delaware cases and had resolved a “significant number” of cases in which it was named as a defendant.

“While we have great sympathy for the plaintiffs in these cases, there is no reliable scientific evidence that Zantac, which has been reviewed and approved by the FDA, causes cancer. Pfizer hasn’t sold a Zantac product in over 15 years and has only done so for a while. limited period of time, and Pfizer has never manufactured a Zantac product,” the company said in a statement.

The Financial Times reported last month that Pfizer had agreed to pay between $200 million and $250 million to settle more than 10,000 lawsuits against Zantac. CNBC has not independently confirmed the amount.

CNBC has contacted Boehringer Ingelheim for comment.