GSK refutes California court ruling on expert opinion in Zantac case
24 Mar 2023
Patent Infringement
Analysts have weighed in on a US judge's decision to allow expert testimony linking GSK's withdrawn heartburn drug Zantac (ranitidine) to various cancers, saying the ruling was not surprising, but the litigation is likely to continue to be a drag on shares until a trial set for July. The company's stock slipped about 4% Friday on news of the California state court ruling.
"We've had some (investor) feedback who are disappointed here given that they were hoping a settlement would have been more likely," remarked Barclays analyst Emily Field. "This obviously removes the blue-sky scenario of the case being totally thrown out," Field said, "but really that wasn't people's expectation."
The trial, to be presided over by Alameda County Super Court Judge Evelio Grillo, will offer the first test of how Zantac cancer claims may fare in state courts. In December, a judge had dismissed all Zantac cases at the federal level, after concluding that scientific evidence provided by the plaintiffs was flawed. That decision meant that GSK, along with other companies that have marketed the drug at different times such as Pfizer, Sanofi and Boehringer Ingelheim, could avoid having to fight over 1700 lawsuits in federal court.
Headed to trial
The latest case was brought by California-based James Goetz, who claims he developed bladder cancer as a result of taking Zantac. His lawyers are looking to get experts on the stand, although GSK was hoping to convince Grillo to limit what expert testimony jurors can hear in this first trial over the Zantac cancer claims.
GSK, which has denied any links between its drug and cancer, said it disagreed with Grillo's ruling to allow the plaintiff's experts to testify. "Following the 13 epidemiological studies conducted looking at human data regarding the use of ranitidine, the scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer," the company said in a statement. It noted that the judge's decision only relates to the question of whether the plaintiff's experts can testify at trial, and not the validity of that testimony. GSK said it "will press additional defences and the plaintiff still needs to prove his case at trial."
Meanwhile, Citi analysts suggested that any settlement for GSK would likely be "very modest" in size, at probably less than $5 billion. The statute of limitations should somewhat restrict cases from proliferating, they said, although thousands still remain in state courts, many consolidated before Grillo in California.
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