24th May 2024 12:48
(Alliance News) - GSK PLC on Friday celebrated as a Zantac-related case in the US went in the pharmaceutical firm's favour.
Shares in the company rose 0.6% to 1,788.50 pence each in London on Friday afternoon.
"This outcome is consistent with the scientific consensus that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer, supported by 16 epidemiological studies looking at human data regarding the use of ranitidine," the London-based company said.
GSK also noted that the Williams case in the Zantac trial, which had been due to start on Thursday this week, has been dismissed by Illinois state court. The court said GSK was not the brand manufacturer of Zantac at the time the plaintiff allegedly used it and therefore should not be liable.
GSK said it "will continue to vigorously defend itself against all other claims".
Zantac was a heartburn drug that was pulled off the market in 2020 at the request of the US Food & Drug Administration, after low levels of a "probable carcinogen" were found in samples. The carcinogen, known as NDMA, is not harmful in very small amounts. However, tests showed that there were excessive quantities of NDMA in ranitidine, otherwise known as Zantac. Multiple litigations have followed.
Shore Capital Markets analyst Sean Conroy commented: "This is another positive outcome for GSK and firmly supports the view that there is no reliable evidence that Zantac (ranitidine) caused certain cancers and that GSK has strong grounds to continue defending itself in ongoing litigation. Importantly, this is another step towards clearing the litigation-related overhang that has disproportionately weighed on the share since the demerger of Haleon and overshadowed the improving growth outlook we believe, GSK has been delivering.
"We are still awaiting a judge's ruling in Delaware states court, where we understand the majority of outstanding cases (covering 70,000 claimants) in the US reside. This will determine whether expert testimony should be put in front of a jury and potentially whether cases there can proceed to trial. We note Sanofi and Pfizer are understood to have recently made settlements at USD25,000 per claimant, this is a far cry for the [more than USD200,000] we believe the market had initially priced in when concerns arose (in August 2022) around potential size and scope of legal damages. We still believe that a worst case, up to [around [USD40 billion] downside scenario for litigation has been priced into the share."
Separately on Friday, GSK said that findings across its oncology portfolio will be presented in 25 abstracts at the American Society of Clinical Oncology annual meeting in Illinois, which runs from May 31 to June 4.
The company noted that results for monotherapy Blenrep in multiple myeloma have been featured in a late-breaking presentation. Further, GSK will present updated results from a support collaborative study for cancer medicine Jemperli in locally advanced mismatch repair deficient rectal cancer.
By Eric Cunha, Alliance News news editor
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