GSK to settle 80,000 Zantac cases for up to $2.2 billion

GSK Plc said it will pay up to $2.2 billion to settle about 80,000 U.S. lawsuits related to allegations that its old reflux drug Zantac was contaminated with a suspected cancer.

The lawsuits represent about 93 percent of those against the company involving Zantac, GSK said in a statement Wednesday. Their settlement is not an admission of liability, the company said.

Related: Boehringer Ingelheim Faces Second Hung Jury in Chicago Zantac Trial

The plaintiffs alleged that the company knew that Zantac’s active ingredient, ranitidine, converted to the potential carcinogen NDMA under certain conditions. The US Food and Drug Administration has asked the companies that make Zantac to remove all ranitidine-based drugs from the US market by 2020.

GSK’s U.S. depositary receipts rose as much as 9.9 percent in New York, the most intraday since December 2022, after the deal was announced.

Related: GSK to seek dismissal of Florida case against heartburn drug Zantac

GSK is among a number of companies that have made and sold versions of Zantac, and investor concern about the potential value of the settlement has weighed heavily on the drugmaker’s share price. GSK said it “strongly believes these settlements are in the long-term best interests of the company and its shareholders as they remove the significant financial uncertainty, risk and distraction associated with protracted litigation.”

The plaintiffs decided to settle the case after the Delaware Supreme Court signaled it might return to a previous ruling that was in their favor, according to people familiar with the matter, who asked not to be identified discussing the deliberations.

Other Settlements

Sanofi agreed in April to pay more than $100 million to settle about 4,000 lawsuits related to Zantac. Pfizer Inc. agreed to settle more than 10,000 related cases, Bloomberg reported in May.

In a September interview with Bloomberg News, chief executive Emma Walmsley stressed that “GSK’s priority is to start with the science, defend our position and always act in the best interests of shareholders”.

Related: GSK settles another heartburn lawsuit in Illinois

The UK drugmaker also said it had reached an agreement to pay an additional $70 million to settle a complaint filed by Valisure, a pharmacy that tests drugs for contaminants. Valisure alleged that GSK knew about and hid Zantac’s risks from the US government. GSK said the settlement was not an admission of liability.

GSK expects to take an additional charge in its future results of 1.8 billion pounds ($2.4 billion) related to the regulations, as well as the remaining 7 percent of product liability cases pending in court .

GSK’s move does not end the litigation surrounding Zantac, as other drugmakers still face lawsuits, including Boehringer Ingelheim GmbH, which faces a jury trial in Oakland.

Top photo: Zantac packets and pills. Photographer: Drew Angerer/Getty Images.

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