GSK shares down 9% as US judge says juries can decide ‘battle of the experts’ in Zantac lawsuits 

03 Jun 2024
firstwordpharma.com
Patent Infringement
GSK’s shares plunged as much as 9% on Monday, wiping over £6 billion ($7.6 billion) off the company’s valuation, as investors reacted to news that a judge in the US allowed around 75,000 lawsuits related to Zantac (ranitidine) to proceed to trial. Meanwhile, shares in Sanofi, which is also a defendant in thousands of the cases, slipped nearly 2%.
Late on May 31, Delaware judge Vivian Medinilla determined that evidence supporting the claims of the plaintiffs is legitimate and can be heard by juries. At the heart of the lawsuits are allegations that GSK and Sanofi — as well as other companies that sold Zantac during its time on the market — knew that the drug’s active ingredient turned into the potential carcinogen NDMA under certain conditions.
GSK and the other defendants had hoped that Medinilla would follow the lead of a federal judge in Florida who rejected the cancer evidence as unreliable in 2022. However, Medinilla noted that regulators ordered Zantac to be withdrawn from the market after concluding NDMA is a “substance that can cause cancer.” The judge said “this dispute presents a classic battle of the experts,” adding that the companies “can take up their challenges” to plaintiffs’ scientific evidence on cross-examination at trial.
Liabilities underestimated
Analysts at J.P. Morgan suggested that the potential liability that GSK could face from the litigation is likely higher than the $2 billion to $3 billion assumed by the market. Analysts previously estimated that the defendants, which also include Boehringer Ingelheim, Pfizer and Sanofi, could face a combined liability of up to $10 billion.
Medinilla said that Delaware law shows a “deep deference for the role of juries as the ultimate fact finders. Delaware courts are loath to step into the heart of technical debate between opposing scientists.” A trial date for the cases has yet to be set.
Appeals incoming
GSK said it will “immediately seek an appeal” of Medinilla’s ruling, noting that it “relates only to the question of whether the methodology used by plaintiffs’ experts is sufficiently reliable to allow them to present their evidence at trial…[and] does not mean that the court agrees with plaintiffs’ experts’ scientific conclusions.”
Meanwhile, Sanofi, which is named in around 25,000 of the cases, said that it also intends to appeal the latest decision. Pfizer also plans to appeal the ruling, noting that it is implicated in “only a fraction” of the Delaware cases, and sees no material impact from Zantac litigation.
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