(News Bulletin 247) – The pharmaceutical giant is down sharply on the London Stock Exchange after the verdict of an American court on the dispute over Zantac, a drug used against heartburn.

The British pharmaceutical giant GSK fell by almost 10% Monday morning in London, after a decision by an American court paving the way for trials on its heartburn drug, Zantac, accused by patients of having contributed to their cancer.

GSK “disagrees with the decision of the court of the State of Delaware and will immediately appeal”, indicated the laboratory in a press release published during the weekend, judging that this decision rendered Friday was contrary to a federal decision of December 2022.

Ranitidine, better known by its trade name Zantac, used against heartburn and formerly over the counter in the United States and Canada, was manufactured and marketed by several laboratories including GSK and the French Sanofi before being withdrawn in 2019.

The company’s action on the London Stock Exchange lost another 8.8% to 1,610 pence, while that of Sanofi limited its decline to 0.50% to 83.31 euros on Monday around 3:30 p.m.

“A series of lawsuits in the United States (…) seemed to be running out of steam,” but the latest decision “gives the green light to 70,000 files” of complaints, said Russ Mould, analyst at AJ Bell.

“GSK and the other parties involved, Pfizer and Sanofi” contest the decision but “in the short term, it only adds to the uncertainty” about the prospects of these companies, according to the analyst.

Disputes that weigh on the outlook

Class action and personal injury lawsuits were filed in US courts after the US Food and Drug Administration (FDA) warned in 2019 that some ranitidine drugs, including over-the-counter Zantac, contained low levels of an environmental contaminant (NDMA) considered “probable carcinogen”.

GSK says scientific evidence shows there is no increased risk of cancer associated with the drug and assures it will “continue to vigorously defend itself” against all accusations.

“The litigation in Delaware is still in its early stages and the decision … focuses solely on whether the methodology used by the plaintiffs’ experts is sufficiently reliable to allow them to present their evidence at trial,” GSK said in its press release.

GSK obtained a legal victory in December 2022 in the United States which covered several states, and has since announced several amicable agreements to avoid trials. But the laboratory nevertheless recognized at the start of the year that disputes linked to Zantac continued to weigh on the group’s outlook for results.

(With AFP)