GSK Settles 80,000 Lawsuits Related to Zantac

Shares of GSK plc (OTC:GLAXF) (LON:GSK) rose by 6.6% to £1,554.23 after the company announced it has reached settlements for approximately 80,000 lawsuits concerning its Zantac product in the United States.

The company has agreed to resolve 93% of the product liability cases pending in U.S. state courts, amounting to a total payment of up to $2.2 billion. This decision comes amidst ongoing litigation regarding claims that Zantac may be associated with cancer, although GSK maintains that no reliable scientific evidence supports these allegations.

Settlements were reached with ten plaintiff firms that represent the majority of the cases, and they are expected to be fully implemented by the end of the first half of 2025. The plaintiff firms have recommended that their clients accept the settlement terms, reflecting a consensus among the litigants.

GSK has also confirmed it reached an agreement in principle to pay a total of $70 million to resolve a Zantac qui tam complaint previously filed by Valisure, pending final approval from the Department of Justice.

While settling these lawsuits, GSK has not admitted liability in either the state court or the qui tam settlement. The company believes these settlements are in its long-term strategic interest and will help eliminate uncertainties surrounding ongoing litigation.

To accommodate these settlements, GSK plans to recognize an incremental charge of £1.8 billion in its third-quarter financial results for 2024, covering the costs associated with the settlements and the remaining 7% of pending product liability cases. GSK assures investors that these expenses will be funded through existing resources and will not impact its growth agenda or research and development investment plans.