GSK CEO Strives to Resolve Zantac Litigation Drag on Shares

GSK CEO Strives to Resolve Zantac Litigation Drag on Shares

Introduction

GSK Plc’s CEO has made it a priority to ensure that the majority of the company’s employees remain focused on the company's core mission, rather than the ongoing Zantac litigation, which has impacted its stock for years.

"I work really hard to make sure that 99.9% of the company is not spending one minute thinking about Zantac," she said. A small group within GSK is handling the legal matters related to consumer claims that Zantac caused cancer, claims the company strongly denies.

The CEO did not comment on whether GSK would pursue a settlement for the tens of thousands of Zantac-related lawsuits, similar to Johnson & Johnson’s approach with talc litigation. She stressed that the company’s strategy is to rely on science, defend its position, and prioritize shareholder interests. She acknowledged that the Zantac litigation remains a significant concern for GSK.

Plaintiffs allege that Zantac's active ingredient, ranitidine, could transform into the carcinogen NDMA under certain conditions. In response, the U.S. Food and Drug Administration (FDA) requested the removal of all ranitidine-based drugs from the U.S. market in 2020.

GSK has been quietly settling individual cases, with the stock losing about 10% since August 2022, when concerns about the litigation escalated. Investors remain wary of the potential settlement costs, estimated between $3 billion and $4 billion, with GSK responsible for around half of that amount. Other companies involved in producing Zantac, such as Sanofi, agreed in April to pay more than $100 million to settle roughly 4,000 related lawsuits, while Pfizer has settled over 10,000 similar cases.