The shares of pharmaceutical companies Glaxo Smith Kline (GSK.UK) and Sanofi (SAN.FR) rose today amid reports from Bloomberg that thousands of lawsuits over the drug Zantac have been dismissed. Concerns had been weighing on pharmaceutical company stock valuations for several months. Also gaining on the wave of reports are Haleon (HLN.UK) and Pfizer, which is trading slightly higher in opening trade (PFE.US):
- Zantac was used as a popular prescription heartburn drug for nearly a decade. The Federal Drug Administration (FDA) took it off the market in 2020 amid concerns about the consequences of its use. Since then, thousands of people have sued companies that sold the drug, claiming it caused cancer;
- In a ruling issued Tuesday in federal court in Florida, however, Judge Robin Rosenberg wrote that scientists do not support the claims. Ultimately, the court found that there was no evidence that Zantac caused the cancers it was accused of causing;
- The likelihood that companies will have to make substantial liability payments for Zantac has dropped significantly. In a statement reported by Reuters, attorneys for the plaintiffs in the suit said they expect the judge's decision to be reversed on appeal. Investors paid little attention to the Zantac-related dispute until August, when UBS analysts began talking about the case;
- Haleon, formerly a joint venture of Pfizer and GSK, which sold the Zantac drug at various times, said it would not be financially liable even if its two predecessor companies were found liable in lawsuits over the matter.
Glaxo Smith Kline (GSK.UK) stock chart, D1 interval. Glaxo Smith Kline shares opened today with an upward gap. Sanofi (SAN.FR, yellow chart) shares also reacted euphorically to the reports. Source: xStation5
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