GSK shares dive on Zantac court case ruling

Shares in GSK fell around 9% this morning after a judge in a Delaware court gave the green light for tens of thousands of lawsuits claiming harm by gastrointestinal drug Zantac to proceed to trial.

Judge Vivian Medinilla of Delaware Superior Court issued an order, which found that plaintiffs’ claims that Zantac (ranitidine) could cause multiple types of cancer were “reliable and admissible”, paving the way for more than 72,000 plaintiffs to make their case in court.

GSK had filed a motion to get the cases thrown out before coming to trial, which was denied, and said in a statement that it “disagrees with the ruling by the Delaware State Court and will immediately seek an appeal.”

The company and other pharma groups that have sold ranitidine products over the years have so far been fairly successful in fending off the litigation, with wins in the US and Canada, but there’s no question that the Delaware ruling is a setback and the stock fall wiped more than £6 billion off GSK’s valuation.

The new 102-page opinion contradicts a December 2022 federal court ruling which dismissed all cases alleging five cancer types.

The complaints revolve around allegations that Zantac and other medicines containing ranitidine feature a carcinogen called N-nitrosodimethylamine (NDMA) that can cause several forms of cancer and other illnesses – which is disputed by GSK and other defendants, which include Sanofi, Boehringer Ingelheim and Pfizer.

In its latest statement, GSK reiterated its position that after “16 epidemiological studies looking at human data regarding the use of ranitidine, the scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer.”

Judge Medinilla wrote in her opinion that experts fielded to provide evidence by both the plaintiffs and defendants were “serious scientists”, and it would be improper to dismiss them as “poseurs or witnesses for hire.”

“As gatekeeper, the court has found that each side has carried its required burden of demonstrating the reliability of its proffered…evidence,” she added.

Zantac was originated by GSK and launched by the company in the early 1980s, which sold it as a prescription and over-the-counter (OTC) product for indications like heartburn and acid indigestion over the years.

Sanofi had rights to the OTC version of the drug that was recalled in 2019 over possible contamination with NDMA, and it was also sold in generic form by several other producers.

GSK said that alongside its appeal to the Delaware Supreme Court, it will also file motions for dismissal on other grounds and, at the same time, will progress to trials of individual cases.

When news of the Zantac lawsuits first emerged, analysts suggested the defendant companies could be on the hook for ‘billions of dollars’ in liability if the cancer claims are upheld.