GSK Stock Plummets Nearly 9% Amid Zantac Lawsuit Developments

GSK Shares Plunge as Court Opens Door to Zantac Lawsuits
In a significant legal development, shares of pharmaceutical giant GSK plummeted nearly 9% following a Delaware State Court’s decision to permit jury trials for lawsuits linked to its heartburn medication, Zantac. This ruling potentially exposes GSK to over 70,000 lawsuits concerning the drug, which was withdrawn from the U.S. market in 2020 amid allegations of containing the carcinogen NDMA.
Financial analysts at J.P. Morgan have estimated GSK’s potential litigation liabilities to be between $2-$3 billion. The court’s decision also affects other Zantac manufacturers such as Pfizer, Sanofi, and Boehringer Ingelheim, all of whom intend to appeal against the ruling. These companies have consistently argued against the claims, emphasizing the lack of conclusive evidence tying Zantac to cancer.
The legal battles over Zantac have seen various outcomes, including a notable dismissal of nearly 50,000 cases in Florida in 2022 and a recent victory for GSK in Chicago. Despite the ongoing litigation, GSK remains confident that the lawsuits will not impact its financial strategies or investment plans.
Amidst these challenges, GSK’s stock had previously seen a nearly 35% increase over the past year. The current consensus among analysts suggests a Moderate Buy rating for GSK stock, with an average price target of $48.50.