Key Points
- GSK reached a settlement in what would have been the first lawsuit involving allegations that Zantac caused the cancer.
- The company said it reached an agreement to avoid “distraction” ; of protracted litigation.
- GSK continues to face a series of similar lawsuits, primarily in Delaware.
GSK's (GSK) US certificates of deposit (ADR) jumped nearly 5% on Friday after the UK-based biopharmaceutical company said it had reached a settlement in a a lawsuit accusing the company's discontinued heartburn drug, Zantac, of causing the cancer.
The drugmaker said the confidential agreement with James Goetz over the case he filed in California means the trial due to begin on July 24 has been dismissed. GSK said the agreement “reflects the company's desire to avoid any distractions associated with protracted litigation.” GSK added that it does not admit liability and will “vigorously defend itself” against any future lawsuits against Zantac.
Goetz claimed that the drug had caused him to develop cancer, and his was to be the first of several Zantac cancer trials that GSK is facing. The largest number have been filed in Delaware, and hearings will likely take place in January.
Zantac was approved for use in 1983, but the Food and Drug Administration (FDA) pulled all branded and generic versions from the market in 2020 over concerns that its active ingredient, ranitidine, could degrade over time into a cancer-linked chemical. This led to a series of lawsuits against GSK and other drugmakers who were also selling the product.
Friday earnings put ADRs of GSK in positive territory for the year.
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Source: investopedia.com
