GSK, Sanofi shares rise after U.S. judge dismisses Zantac cancer link lawsuits

By Scott Kanowsky 

Investing.com -- Shares in GSK plc (LON:GSK) and Sanofi SA (EPA:SASY) soared on Wednesday after the drugmakers saw tens of thousands of lawsuits involving the heartburn medicine Zantac dismissed in a U.S. court.

U.S. District Court Judge Robin Rosenberg in Florida ruled that claims that Zantac caused cancer lacked scientific merit, canceling out about 50,000 cases filed in federal court.

Plaintiffs in these cases said they developed cancer after using Zantac. They also accused GSK and Sanofi - as well as peer Pfizer Inc (NYSE:PFE) and privately-held German firm Boehringer Ingelheim - of knowing, or failing to know, that the treatment contained an active ingredient that may lead to cancer. They added that these firms did not adequately warn consumers of the risk.

All of the drugmakers involved in these cases have denied that Zantac causes cancer.

Some drug manufacturers and pharmacies had previously stopped selling Zantac in 2019, citing concerns that the ingredient, ranitidine, may decay over time into a chemical known as NDMA. Although common in small doses in food and water, in large amounts, NDMA could lead to cancer.

The U.S. Food and Drug Administration moved a year later to recall all brand names of Zantac and its generic versions off of shelves, saying that research suggested that the amount of NDMA in these products grows over longer storage times.

But in her court ruling on Tuesday, Rosenberg said that the expert witnesses the plaintiffs were planning to bring forward had used "unreliable methodologies" and lacked "science-based standards" needed to objectively evaluate the data surrounding the drug. As such, these experts could not be admitted in court, Rosenberg declared.

In a joint statement, lawyers representing the plaintiffs hit out at what they described as a "miscarriage of justice," adding that they "fully expect" to prevail on appeal.

GSK said it welcomed Rosenberg's decision and reiterated that there is "no consistent or reliable evidence that ranitidine increases the risk of any cancer."

A spokesperson for Sanofi told Reuters that the scope of the litigation around Zantac is now reduced "potentially by over 50%." Thousands of similar cases remain pending in state courts.

Shares in GSK jumped by more than 13% in early trading, while Sanofi shares moved up by more than 8%.