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GSK shares dropped almost 10 per cent on Monday after a ruling from a Delaware judge left the UK drugmaker group exposed to US jury trials for more than 70,000 cases over its allegedly carcinogenic heartburn treatment Zantac.
The judge ruled that scientific evidence presented by the plaintiffs was admissible before juries, meaning scientists would be able to testify before a jury that there is a link between the plaintiffs’ cancers and their exposure to NDMA, a probable human carcinogen, through Zantac.
GSK and other companies that sold the drug dispute these claims. The company said it planned to appeal against the ruling. GSK shares were down by 9.5 per cent in early trading, while shares in French pharmaceutical group Sanofi, which sold the drug from 2017, dipped 2 per cent.
After hearing plaintiffs’ scientific evidence in January, judge Vivian Medinilla ruled that it was admissible in a judgment on Friday, which was published on Saturday.
GSK gained US approval for the drug in 1983 and it became the first pharmaceutical “blockbuster” by generating more than $1bn in revenue. Pfizer, Boehringer Ingelheim and Sanofi later acquired the rights to sell the drug.
Exposure to Zantac litigation has dogged GSK’s share price since the summer of 2022, when analysts estimated the potential costs to be as much as $45bn, wiping a combined $40bn off the market capitalisation of large pharmaceutical groups linked to the drug in days.
The judgment came as a “surprise”, wrote Citi analyst Peter Verdult, given that a Florida federal court decided in 2022 that other scientific experts’ findings about the carcinogenic nature of Zantac were based on “unreliable methodologies”.
The vast majority of outstanding cases are being heard in Delaware. In seeking to prevent the plaintiffs’ scientists from testifying, GSK had hoped to draw a line under the vast majority of outstanding cases. Although Judge Vivian Medinilla’s ruling does not endorse the plaintiffs’ claims, it enables their cases to advance to jury trials.
GSK said: “[The] scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer and GSK will continue to vigorously defend itself against all claims.”