(Bloomberg) -- GSK Plc CEO Emma Walmsley doesn’t want the company’s employees spending any time thinking about the ongoing litigation over its old heartburn drug Zantac, an issue that has weighed on the stock for years.
“I work really hard to make sure that 99.9% of the company is not spending one minute thinking about Zantac because that’s not the purpose of the company,” Walmsley said in an interview at Bloomberg headquarters in New York.
She said she was among a small group within GSK working with its legal team to manage claims from consumers that Zantac caused their cancers. GSK has denied that Zantac caused cancer.
Walmsley declined to comment on whether GSK plans to settle the tens of thousands of Zantac cases it faces in a similar manner to a recent talc settlement that Johnson & Johnson secured. She emphasized that the company’s “priority is start with the science, defend our position and always, always act in the interests of shareholders.”
The Zantac litigation is “clearly an issue and an overhang” for GSK, Walmsley said.
Plaintiffs have said the company knew Zantac’s 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.
GSK has been settling individual cases, with the shares losing about 10% since August 2022, when concern about the litigation began to hit. The stock was little changed Wednesday in London.
Investors are concerned about the potential settlement value, which Bloomberg Intelligence estimates at $3 billion to $4 billion. GSK bears around half of that. Several other drugmakers have produced Zantac, including Sanofi, which agreed in April to pay more than $100 million to settle about 4,000 related lawsuits. Pfizer Inc., another former Zantac maker, agreed to settle more than 10,000 related cases, Bloomberg reported in May.
Obesity Race
GSK has no immediate plans to go into obesity, she said, as Novo Nordisk A/S and Eli Lilly & Co. “have done a phenomenal job” with their new medicines for the condition. Nevertheless, Walmsley sees a potential opportunity for GSK.
“You should always ask questions when new fields emerge on how that’s going to impact health care more more broadly,” she said.
Walmsley expects the impact of the new therapies “will open up opportunities” in related areas of medicine. Research has already shown that patients on obesity drugs are less likely to suffer heart attacks or strokes. Recent research has also shown Novo’s Wegovy reduced deaths from Covid.
Walmsley pointed to various parts of its portfolio for growth, including HIV treatments. She expects that ViiV Healthcare, a joint venture it majority owns, will remain competitive with Gilead Sciences Inc. in the market for long-acting anti-HIV injections and prophylactic regimens.
HIV Treatments
ViiV’s long-acting HIV medications can be injected every two months, and the company is testing long-acting regimens administered every four months. In the future, annual anti-HIV injections may be possible, Walmsley said.
“When we first talked about long-acting, everyone said that wasn’t going to cut through, and now the entire industry has followed suit,” Walmsley said. “There can be no debate that long-acting is going to become the core of the market in HIV.”
Gilead has a drug called lenacapavir that the company recently showed can be used to prevent HIV with twice-yearly shots.
ViiV’s treatments for HIV are keeping GSK “way ahead in the biggest part of the market,” Walmsley said. “And we think we’ll still be competitive in prevention.”
--With assistance from Madison Muller.
(Updates with detail on obesity, HIV drugs in second and third sections)
©2024 Bloomberg L.P.
