GSK PLC (LSE:GSK, NYSE:GSK) lost over £6 billion in market value after a court judge in the US state of Delaware allowed more than 70,000 lawsuits over discontinued heartburn drug Zantac to proceed to trial.
The FTSE 100 drug giant said it disagrees with the decision, will "continue to vigorously defend itself" against all Zantac claims and will immediately seek an appeal.
On Friday, Judge Vivian Medinilla of the Delaware Superior Court ruled that expert witnesses can testify in court that the drug may cause cancer.
In her statement, the judge wrote that "Delaware courts are loath to step into the heart of the technical debate between opposing scientists".
GSK, Pfizer and Sanofi, the companies that used to make the drug, have argued that the expert witnesses' opinions lacked scientific support, with all the companies disagreeing with the ruling.
"The litigation in Delaware remains at an early stage, and the ruling, under the Daubert standard, relates only to the question of whether the methodology used by plaintiffs' experts is sufficiently reliable to allow them to present their evidence at trial," GSK said in its statement.
"The ruling does not mean that the Court agrees with plaintiffs' experts' scientific conclusions, and it does not determine liability."
GSK shares fell over 10% in early trading and after half an hour were down 9.5% at 1,599p, wiping out most of the gains made so far this year.