Both Sanofi and GSK recalled Zantac in 2019 after the U.S. Food and Drug Administration said it had found a contaminant in the drug.
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Shares in pharmaceutical companies GSK PLC and Sanofi SA traded higher after a U.S. judge dismissed a series of lawsuits around a heartburn treatment that both companies had marketed.
The lawsuits, which numbered in the tens of thousands, alleged that the drug, called Zantac, could cause cancer. The judge concluded on Tuesday that there was no scientific evidence to support the claim that Zantac’s active substance, called ranitidine, was carcinogenic.
On Wednesday morning, shares in GSK traded 12% higher, while Sanofi stock was up 8.2%.
Sanofi, GSK, but also Pfizer Inc. and Haleon, GSK’s former consumer-health division, could all have faced liabilities from the litigation. Sanofi and GSK recalled Zantac in 2019 after the U.S. Food and Drug Administration said it had found a contaminant in the drug. Pfizer said in August that it only sold Zantac from 1998 to 2006.
Tuesday’s ruling is multidistrict, meaning that it doesn’t apply to single state courts, where more complaints are still active. Historically, however, many state courts tend to take their cues from multidistrict ones, according to Jefferies analysts. “Plus, economic motivation for plaintiff lawyers is likely now dented,” the analysts said in a note.
Tuesday’s decision could be appealed. Shares in the drugmakers will likely continue to suffer from volatility until the issue is fully resolved, analysts at Shore Capital said in a note.
Write to Cecilia Butini at cecilia.butini@wsj.com
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