UK pharmaceutical stocks GSK, Haleon and Sanofi have been dragged into the red today – losing billions in market value – ahead of a litigation around recalled heartburn drug Zantac.
GSK’s shares have fallen more nearly nine per cent, its newly listed spinoff firm Haleon sunk as much as seven per cent and Paris-based Sanofi has declined as much as 13 per cent so far today.
The drug was recalled in 2019, following claims by the US Food and Drug Administration that it produces unacceptable levels of cancer-causing chemicals when exposed to heat.
The case, which will first be heard in Illinois, the US on 22 August, is expected to be headed to several other courts early next year.
Deutsche Bank analyst Emmanuel Papadakis warned today that the litigation will weigh on GSK and Sanofi shares in the short-term.
Healthcare analyst at pharma data analysis firm Citeline, Ellie Davenport, told City A.M. that there remains “considerable uncertainty” around the financial impact of the Zantac litigation.
“The ongoing Zantac woes are likely to act as a near-term headwind for both GSK and Sanofi, as key trials scheduled for the second half of 2022 and beyond could see in damage liabilities reaching into the tens of billions,” she said.
“GSK’s recent consumer healthcare spin-off, Haleon, is expected to have limited involvement, although the company has indemnification obligations to GSK and Pfizer.”
City A.M. has contacted GSK, Haleon, Sanofi and Pfizer for comment.