Shares in GSK and Sanofi surge as court rules on Zantac heartburn treatment       

Judge Rosenberg rejected scientific evidence, and said experts used 'unreliable methodologies to conclude ranitidine degrades into NDMA inside of the human body.' 

The lawsuits by former Zantac users against a group drugmakers that made the now-over-the–counter heartburn medicine over the years. Pfizer is among the drugmakers involved. Picture: iStock

Shares in GSK and Sanofi surged after a US judge rejected the scientific evidence behind claims heartburn drug Zantac can cause cancer, meaning the drugmakers do not have to face more than 5,000 lawsuits.

GSK shares closed over 8% higher in London trading and Sanofi gained 7% in Paris. The UK drugmaker welcomed the dismissal, saying the ruling slapped down “unreliable and litigation-driven science”.

District Judge Robin Rosenberg in Florida, concluded that consumers used flawed science to back up lawsuits filed in federal court blaming Zantac for causing a variety of cancers. Judge Rosenberg found plaintiffs’ experts could not show legitimate links between the product and the diseases, which include lung, liver, and kidney cancer.

'Stocks in better shape' 

The ruling brought relief for GSK and Sanofi but the shares didn’t fully recover from the Zantac-related tumble they took in August. Sanofi still traded below its early August peak and GSK shares were also lower. 

The lawsuits by former Zantac users against a group of branded and generic drugmakers that made the now-over-the–counter heartburn medicine over the years had been gathered before Judge Rosenberg for pre-trial information exchanges and rulings.

Pfizer is also among the drugmakers involved. Other cases have been filed in state courts around the US.

Plaintiffs argued the companies knew the drug’s active ingredient, ranitidine, degraded and turned into the potential carcinogen NDMA under certain conditions. In 2020, the US Food and Drug Administration asked companies to remove all ranitidine-based drugs from the US market after some versions were found to be contaminated with NDMA.

Haleon, the consumer unit spun off by GSK this year, was upgraded by a Barclays analyst who called it “investible again”. 

“We have felt that the basis for such litigation was a weak one, given the product’s prior withdrawal from the market,” Tim Anderson, an analyst at Wolfe Research, wrote in a note. “Both stocks are in better shape now.” 

Judge Rosenberg said plaintiffs’ scientific experts used “unreliable methodologies to conclude ranitidine degrades into NDMA inside of the human body”, according to her ruling. Her decision also applies to about 50,000 unfiled cases also covered by the so-called multi-district litigation (MDL), according to court filings. 

• Bloomberg