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GSK Stock Dips on Delaware Court Ruling for Zantac Litigation
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GSK (GSK - Free Report) issued a statement disagreeing with the ruling by a state court in Delaware to allow jury trials for cases, which claim GSK’s discontinued heartburn drug Zantac (ranitidine) causes cancer. The court’s decision will allow 72,000 personal injury lawsuits filed in Delaware court to move forward to trial and expert witnesses to testify in court that Zantac may cause cancer.
GSK shares declined more than 7% in pre-market trading on Monday in response to the legal setback. If the claims are proved in court, the compensation will cost the company billions of dollars.
The British drug giant said it will appeal against the decision. It said the ruling contradicted the Federal Court's ruling in multidistrict litigation in December 2022.
In December 2022, a Multi-District Litigation (MDL) court of Southern Florida issued a decision dismissing all lawsuits alleging that Zantac causes cancer. In the MDL, plaintiffs identified five different types of cancers (liver, bladder, pancreatic, esophageal and stomach). There were around 50,000 claims in the MDL. The court dismissed all MDL cases alleging the five cancers.
In response to the latest ruling by the Delaware state court, GSK denied that Zantac causes cancer, citing scientific consensus. The statement released by GSK mentioned that there was no consistent or reliable evidence to show that ranitidine increases the risk of any cancer, and hence, it disagrees with the ruling. GSK said it will continue to vigorously defend itself against all claims
GSK’s stock has risen 20.9% year to date against a decrease of 6.6% for the industry.
Image Source: Zacks Investment Research
In April 2020, the FDA requested manufacturers to withdraw all prescription and OTC Zantac (ranitidine) medicines from the market with immediate effect. The regulatory agency decided to take this step due to a contaminant known as N-Nitrosodimethylamine (NDMA) found in ranitidine drugs.
NDMA is a substance that can cause cancer in humans. In 2019, the FDA became aware of the low levels of NDMA traces found in ranitidine in laboratory testing. Subsequently, the regulatory body decided to caution the general public against taking ranitidine drugs and, instead, consider alternative treatments.
Eventually, the companies and manufacturers decided to withdraw and recall all the ranitidine products from the market.
Other than GSK, other companies that marketed prescription or over-the-counter Zantac (ranitidine) medicines, such as Sanofi (SNY - Free Report) and Pfizer (PFE - Free Report) , also withdrew their products from the market.
Several personal injury cases were filed in federal and state courts, alleging that Zantac (ranitidine) medicines cause cancer. However, GSK, Pfizer and Sanofi have consistently denied that Zantac causes cancer.
Image: Bigstock
GSK Stock Dips on Delaware Court Ruling for Zantac Litigation
GSK (GSK - Free Report) issued a statement disagreeing with the ruling by a state court in Delaware to allow jury trials for cases, which claim GSK’s discontinued heartburn drug Zantac (ranitidine) causes cancer. The court’s decision will allow 72,000 personal injury lawsuits filed in Delaware court to move forward to trial and expert witnesses to testify in court that Zantac may cause cancer.
GSK shares declined more than 7% in pre-market trading on Monday in response to the legal setback. If the claims are proved in court, the compensation will cost the company billions of dollars.
The British drug giant said it will appeal against the decision. It said the ruling contradicted the Federal Court's ruling in multidistrict litigation in December 2022.
In December 2022, a Multi-District Litigation (MDL) court of Southern Florida issued a decision dismissing all lawsuits alleging that Zantac causes cancer. In the MDL, plaintiffs identified five different types of cancers (liver, bladder, pancreatic, esophageal and stomach). There were around 50,000 claims in the MDL. The court dismissed all MDL cases alleging the five cancers.
In response to the latest ruling by the Delaware state court, GSK denied that Zantac causes cancer, citing scientific consensus. The statement released by GSK mentioned that there was no consistent or reliable evidence to show that ranitidine increases the risk of any cancer, and hence, it disagrees with the ruling. GSK said it will continue to vigorously defend itself against all claims
GSK’s stock has risen 20.9% year to date against a decrease of 6.6% for the industry.
Image Source: Zacks Investment Research
In April 2020, the FDA requested manufacturers to withdraw all prescription and OTC Zantac (ranitidine) medicines from the market with immediate effect. The regulatory agency decided to take this step due to a contaminant known as N-Nitrosodimethylamine (NDMA) found in ranitidine drugs.
NDMA is a substance that can cause cancer in humans. In 2019, the FDA became aware of the low levels of NDMA traces found in ranitidine in laboratory testing. Subsequently, the regulatory body decided to caution the general public against taking ranitidine drugs and, instead, consider alternative treatments.
Eventually, the companies and manufacturers decided to withdraw and recall all the ranitidine products from the market.
Other than GSK, other companies that marketed prescription or over-the-counter Zantac (ranitidine) medicines, such as Sanofi (SNY - Free Report) and Pfizer (PFE - Free Report) , also withdrew their products from the market.
Several personal injury cases were filed in federal and state courts, alleging that Zantac (ranitidine) medicines cause cancer. However, GSK, Pfizer and Sanofi have consistently denied that Zantac causes cancer.
Zacks Rank
GSK currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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