Pharmaceutical giants GSK PLC (LSE:GSK, NYSE:GSK) (GSK.L), Pfizer Inc (NYSE:PFE) (PFE.N), Sanofi SA (SASY.PA) and Boehringer Ingelheim received a boost today as a US court ruled that claims the heartburn drug Zantac caused cancer were not supported by scientific evidence.
Broker UBS said the ruling in the multi-district litigation (MDL) by US district judge Robin Rosenberg removed around 2,000 cases that had been filed in the MDL but as there had been a time limit for cases to be brought, could affect 70,000 cases in total.
Rosenberg found plaintiffs’ experts couldn’t show legitimate links between Zantac and the diseases, which include lung, liver and kidney cancer.
The court decided to exclude plaintiffs' epidemiological evidence and expert testimony based on their “deficiencies and unreliability”, and it dismissed all cases.
GSK said this “ensured that unreliable and litigation-driven science did not enter the federal courtroom.”
GSK welcomed the ruling while a Sanofi spokesperson said the decision "significantly decreases the scope of the litigation potentially by over 50%," with the remaining litigation being only in state court.
Zantac litigation – a reminder
In 2019, an independent laboratory sounded the alarm that Zantac‘s active ingredient ranitidine could be contaminated by NDMA, a substance used to induce cancer in lab rats and therefore likely carcinogenic to humans as well.
The FDA released a warning regarding the findings and began tests of its own.
Some pharmacies and makers of ranitidine-based heartburn drugs recalled these medications at this time.
The FDA’s tests ultimately found lower NDMA levels in Zantac than the independent lab that had raised the alarm, but the agency concluded the substance was still present at unsafe levels.
It published a total recall of Zantac and its generics in mid-2020.
What happens now?
Firstly an appeal. "We are extremely surprised by this miscarriage of justice," and "fully expect" the ruling will be reversed on appeal, lawyers for the plaintiffs said in a joint statement.
While this proceeds the ongoing litigation will move to a state level with the first case in California pending in February 2023..
“The first California case is scheduled for 13 February and Sargon hearings (the Californian process of expert admissibility) will start 25 January," according to UBS.
“Whether there will be a read-across from Florida to California is not clear as standards are different. However general causality will also be a point of discussion” the broker suggested.
However, regardless of liability UBS cautioned litigation "tends to be a drawn out process."
Concerns over litigation have kept GSK's share price iunder pressure but this ruling released the valve and shares have soared 8.5%.