9th Oct 2024 19:59
(Alliance News) - GSK PLC on Wednesday agreed to pay up to USD2.2 billion to settle the vast majority of cases linked to its heartburn medicine Zantac.
In a statement, the London-based pharmaceuticals firm said that it had reached agreements with 10 plaintiff firms representing around 80,000 people who had brought product liability cases against it in state courts, 93% of all claimants. GSK did not accept any liability.
GSK said the participating plaintiff firms are unanimously recommending to their clients that they accept the terms of the settlement, which is expected to be fully implemented by the end of the first half of 2025. Terms of the agreements are confidential.
"While the scientific consensus remains that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer, GSK strongly believes that these settlements are in the best long-term interests of the company and its shareholders as they remove significant financial uncertainty, risk and distraction associated with protracted litigation," GSK said.
GSK also confirmed that it has reached an agreement in principle to pay a total of USD70 million to resolve the Zantac qui tam complaint previously filed by Valisure. The agreement in principle is subject to final approval from the Department of Justice.
The firm expects to recognise a charge of GBP1.8 billion in its third quarter results to include the settlements and the remaining 7% of pending state court product liability cases, partially offset by expected reduced future legal costs.
The costs of these settlements will be funded through existing resources. There are no changes to GSK's growth agenda or investment plans for R&D as a result of these settlements, the firm stated.
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 Zantac, otherwise known as ranitidine. Multiple litigations have followed.
Concerns over large liabilities have created a large overhang on the company’s share price.
Shares in GSK closed up 0.3% at 1,458.00 pence in London on Wednesday. The firm's American depositary receipts traded 6.1% to the good in New York at USD40.35.
By Jeremy Cutler, Alliance News reporter
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