(Bloomberg) -- GSK Plc shares rose on Wednesday, buoyed by a US court’s decision to review whether evidence supporting claims that heartburn drug Zantac causes cancer is scientifically sound.
The British drugmaker said the Delaware Supreme Court would review an earlier decision from a lower court that found that evidence introduced by plaintiffs could be heard in upcoming trials. Reviews by the highest court in Delaware are granted “in exceptional circumstances,” the company said.
GSK shares rose nearly 3% in early trading in London. The stock is up about 18% in the past 12 months.
The Delaware Supreme Court’s review will progress alongside ongoing litigation, in which more than 70,000 consumers have filed suit in the state targeting former producers of Zantac. Those consumers claim that the heartburn drug that was produced by GSK, Pfizer Inc. and others caused their cancers.
The decision in June by Delaware Superior Court Judge Vivian Medinilla marked a significant blow to GSK and the other drugmakers, who had hoped Medinilla would follow the lead of a federal judge in Florida who rejected the cancer evidence as unreliable in 2022.
GSK has denied the claim that Zantac caused cancer. Plaintiffs meanwhile have said that the companies knew the active ingredient ranitidine turned into the potential carcinogen NDMA under certain conditions. The US Food and Drug Administration asked companies to remove all ranitidine-based drugs from the US market in 2020.
The litigation has weighed heavily on GSK’s share price, with investors concerned about the potential settlement value. Bloomberg Intelligence estimates that settling could total around $3 billion to $6 billion, with GSK bearing 50-60% of the risk.
©2024 Bloomberg L.P.
