GSK Resolves Majority Of US Zantac Cases With $2.2B Settlement Deal, Stock Surges
On Wednesday, GSK plc (NYSE:GSK) reached agreements with ten plaintiff firms representing approximately 80,000 Zantac product liability cases in the U.S. state courts.
These cases account for 93% of the Zantac (ranitidine) lawsuits currently pending against the company.
Under these agreements, GSK will pay up to $2.2 billion to resolve the claims, contingent upon eligibility and participation criteria.
In July, a Delaware judge dismissed a request from GSK and other pharmaceutical companies to appeal a ruling that allows over 70,000 lawsuits alleging the heartburn drug Zantac causes cancer to proceed.
The plaintiff firms recommend that their clients accept the settlement terms, which are expected to be fully implemented by the first half of 2025. However, the settlement terms remain confidential.
In addition to the state court settlements, GSK has agreed in principle to pay $70 million to resolve a separate qui tam complaint related to Zantac, initially filed by Valisure. This settlement is still subject to final approval from the Department of Justice.
Despite these settlements, GSK has not admitted liability in either the state court cases or the qui tam case.
The company maintains that scientific evidence does not support claims that ranitidine increases cancer risks. GSK believes these settlements serve its long-term interests by mitigating financial uncertainties and reducing the potential for prolonged litigation.
As a result of the settlements, GSK expects to record a charge of 1.8 billion pounds ($2.3 billion) in its third quarter 2024 earnings results.
This charge will cover the state court settlement, the qui tam settlement, and the remaining 7% of pending lawsuits.
Price Action: GSK stock is up 7.68% at $40.94 at the last check on Wednesday.
Read Next:
Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market.
Get the latest stock analysis from Benzinga?
This article GSK Resolves Majority Of US Zantac Cases With $2.2B Settlement Deal, Stock Surges originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.