US judge dismisses almost 2,500 lawsuits alleging links between heartburn medication and cancer
Jamie Smyth in New York and Hannah Kuchler in Londonyesterday
Shares in GSK, Sanofi and Haleon soared on Wednesday as investors welcomed a victory in a legal case relating to a popular heartburn medication that had hung over the companies for months.
US district judge Robin Rosenberg in Florida on Tuesday dismissed thousands of lawsuits claiming that the drug Zantac causes cancer.
She said the almost 2,500 lawsuits filed in federal court by plaintiffs were based on flawed science, and that the only reliable testing of the blockbuster drug undertaken showed an “unprovable risk of cancer”.
The ruling was a significant win for the pharmaceutical companies GSK, Pfizer, Sanofi and Boehringer Ingelheim. Analysts said the ruling should remove a large portion of the potential liability linked to the Zantac litigation, which investors had feared could lead to tens of billions of dollars of personal injury awards if claimants had proved a link with cancer.
About £30bn was wiped off the value of large pharmaceutical companies in early August following the publication of a note by investment bank UBS that flagged a “potential overhang” on Sanofi’s stock price because of the Zantac litigation. Morgan Stanley analysts had estimated damages could reach as high as $45bn.
David Risinger, an analyst at SVB Securities, said the ruling appeared to be “a best-case scenario for the companies”.
“While we can’t rule out appeals . . . or some state court litigation proceeding, the comprehensive dismissal by Judge Rosenberg of the plaintiffs’ arguments is compelling for the defendants,” he said.
The companies’ share prices have recovered to just below the level they were trading at in early August. Shares in GSK had surged 14 per cent in London early on Wednesday before the gains were pared back to 8 per cent, while Paris-listed Sanofi was up 6 per cent to €90.73.
Haleon also rose because investors had feared the £27bn UK-based consumer health company spun-off from GSK could be caught up in the lawsuits. Its shares rose 4 per cent to £3.07, slightly below the £3.08 at which the maker of Sensodyne toothpaste and Panadol painkillers began trading independently in July.
Iain Simpson, analyst at Barclays, said that following the ruling “we regard Zantac as substantially derisked, leaving Haleon investible again for those without the appetite for pharma litigation risk”.
The companies could still face thousands of similar personal injury cases filed in state courts, which are being litigated separately from the federal multi-district litigation in Florida.
Zantac, which is the brand name for the drug ranitidine, has been sold by large pharmaceutical companies including GSK, Pfizer, Sanofi and Boehringer Ingelheim over the past 35 years. Several smaller generic companies have also sold versions of the drug.
The four defendants in the litigation denied that using Zantac led to an increased cancer risk and strongly criticised the credibility of a small independent lab that first raised concerns about the link between Zantac and cancer.
Rosenberg said there was no scientist outside the litigation who concluded that ranitidine caused cancer and said experts put forward by the plaintiffs had used unreliable methodologies to reach their conclusions.
“The plaintiffs’ scientists within this litigation systemically utilised unreliable methodologies with a lack of documentation on how experiments were conducted, a lack of substantiation for analytical leaps, a lack of statistically significant data, and a lack of internally consistent, objective, science-based standards for the even-handed evaluation of data,” the judge wrote in the ruling, which ran to more than 300 pages.
Sanofi said it was “pleased” with the court’s decision and remained committed to its defence and the safety of Zantac. “This ruling significantly decreases the scope of the litigation potentially by over 50 per cent,” the French drugmaker added.
GSK said the ruling “ensured that unreliable and litigation-driven science did not enter the federal courtroom”.
Brent Wisner, the co-lead liaison counsel for claimants in the Zantac California state litigation, said he was focused on pursuing the litigation in the state courts.
“We have our first trial scheduled for February 13 2023 in Oakland, California. I feel very confident about the science in our favour . . . Our clients are suffering from all types of cancers and deserve justice.”
Additional reporting by Judith Evans in London
Fonte: Financial Times