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Key Takeaways
- GSK Plc American depositary receipts (ADRs) sank in intraday trading Monday after a Delaware judge allowed lawsuits to continue claiming the pharmaceutical firm’s former heartburn medicine, Zantac, causes cancer.
- The company denies the accusations, and vows an immediate appeal.
- GSK said the ruling was inconsistent with one by a federal court in 2022.
American depositary receipts (ADRs) of GSK Plc (GSK) tumbled in intraday trading Monday after a Delaware court ruled that lawsuits claiming the drugmaker’s discontinued heartburn treatment, Zantac, causes cancer can go forward.
According to multiple reports, Superior Court judge Vivian Medinilla ruled late last week that the some 75,000 plaintiffs weren’t relying on bad science in their arguments. She noted that experts have reached different conclusions, and that a jury should be the one to determine the merits of a technical debate among opposing scientists.
GSK Disagrees With Ruling, Vows Immediate Appeal
GSK announced that it will immediately seek an appeal of the ruling. It said that “there is no consistent or reliable evidence” that Zantac increases the risk of any cancer. It added that the Delaware ruling “contradicts the Federal Court’s (Multidistrict Litigation) ruling under the same legal standard, which dismissed all cases alleging five cancer types, in December 2022.”
Along with GSK, Zantac has been owned by several companies over the years, including Pfizer (PFE) and Sanofi (SNY), which now holds the U.S. rights. However, four years ago, the Food and Drug Administration (FDA) asked pharmaceutical companies to remove all products with ranitidine, the active ingredient in Zantac, from the U.S. market.
GSK noted that despite the court decision, its capital allocation priorities remained unchanged, and it will have no impact on the firm’s investment plans for growth.
ADRs of GSK tumbled 9.3% to $40.63 as of 11:45 a.m. ET Monday but remain up about 10% for the year. Sanofi ADRs were little changed, but Pfizer shares were about 2% higher.