GSK shares rise after $2.2 billion settlement over 80,000 Zantac lawsuits Investing.com

Investing.com — Shares of GSK plc (OTC:) (LON:) rose on Thursday after the company said it has reached a settlement in about 80,000 lawsuits related to its Zantac product in the United States.

At 3:46 am (0746 GMT), GSK was trading 6.6% higher at £1,554.23.

The company has agreed to settle 93 percent of product liability cases pending in US state courts for a total payment of up to $2.2 billion.

This comes as GSK continues to face litigation over claims that Zantac may be linked to cancer, although the company says there is no reliable scientific evidence to support the allegations.

The agreements, reached with ten plaintiff firms representing the majority of the cases, are expected to be fully implemented by the end of the first half of 2025.

The plaintiff firms advised their clients to accept the terms of the settlement, reflecting a consensus among those involved in the litigation.

“GSK also confirms that it has reached an agreement in principle to pay a total of $70 million to resolve the Zantac qui tam complaint previously filed by Valisure,” the company said in a statement.

This agreement is pending final approval by the Department of Justice.

While GSK settled the lawsuits, the company did not admit any liability in either the state court settlements or the qui tam settlement.

The company says the settlements are in the best interest of its long-term strategy and financial stability, helping to remove the uncertainties associated with ongoing litigation.

To account for these settlements, GSK plans to recognize an additional charge of £1.8 billion in its financial results for the third quarter of 2024.

This fee will cover costs associated with settlements and the remaining 7% of pending product liability cases.

However, GSK assures investors that these expenses will be funded through existing resources and will not alter its growth agenda or R&D investment plans.