GSK PLC (LSE:GSK, NYSE:GSK) may face a settlement of up to $2 billion to resolve thousands of lawsuits related to Zantac, a heartburn medication linked to cancer, according to an estimate from the investment banking arm of Barclays.
Zantac was pulled from the market in 2019 after the US Food and Drug Administration (FDA) found it contained N-nitrosodimethylamine (NDMA), a probable carcinogen. This discovery led to numerous lawsuits from patients who alleged that they developed cancer after using the drug.
The potential figure for GSK is informed by recent settlements by other pharmaceutical companies, notably Pfizer.
According to the Financial Times, Pfizer recently settled more than 10,000 US Zantac cases for up to $250 million, which sets a benchmark of approximately $25,000 per case. This figure has influenced Barclays' estimate of GSK's potential settlement costs.
Barclays' analysis suggests that GSK’s settlement could reach $2 billion, aligning with the per-case value established by Pfizer's settlement. This amount is considered manageable for GSK given the company’s financial standing.
The litigation has significantly impacted GSK, creating uncertainty for investors and affecting the company’s stock performance. A settlement would allow GSK to move past the controversy and stabilize its market position.
In afternoon trading the stock was off 1.9% at 1,741.50p.