GSK reaches first legal settlement over heartburn medicine Zantac

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Pharmaceutical group GSK has reached its first legal settlement over allegations its heartburn medication Zantac caused cancer, avoiding a landmark trial that was due to start in California next month.

The UK company said on Friday it had reached a settlement with James Goetz, who filed a suit in a California state court. The deal reflected its desire “to avoid distraction related to protracted litigation in this case”, GSK said, without providing details of the agreement.

“GSK does not admit any liability in this settlement and will continue to vigorously defend itself based on the facts and the science in all other Zantac cases,” it added.

Investors wiped more than a combined £30bn from the valuations of GSK, Haleon, Sanofi and Pfizer last August, amid concerns about a huge legal bill from a barrage of legal cases.

Shares in GSK were up more than 4 per cent in early trading in London.

GSK and other drugmakers that have previously owned Zantac are facing lawsuits claiming that the drug causes cancer because it contains small amounts of N-nitrosodimethylamine, known as NDMA. NDMA is commonly ingested in small amounts but can cause cancer in humans when more is consumed.

Sanofi voluntarily withdrew the drug from the market in 2019 when the US regulator began investigating small amounts of NDMA. In 2020, the Food and Drug Administration said Zantac appeared to produce unacceptably high levels of the chemical when exposed to heat and requested its removal from the market.

The drug was also owned by privately held Boehringer Ingelheim, which this week lost an arbitration case where it sought to be indemnified by Sanofi. Boehringer Ingelheim declined to comment on the arbitration’s ruling. Sanofi did not immediately respond to requests for comment.

GSK has said that the company, the US Food and Drug Administration and the European Medicines Agency had all independently concluded that there was no evidence of a causal association between the active ingredient in Zantac and the development of cancer in patients.

In December, the drugmakers won a significant victory that dismissed thousands of the cases. The judge found that the only reliable testing of the blockbuster drug undertaken showed an “unprovable risk of cancer”.

One person familiar with the matter said the company believed that victory would set a precedent in cases in many states in the US, including a large proportion due next year in Delaware, but not in California, where the standards for evidence are different. GSK still faces three other cases in California but they are not yet scheduled.

In April, analysts at Citi said in a note that they expected the stock to react “very favourably” if GSK settled with plaintiffs in California before the July case. They added that they expected the bill in California to be “very modest”, given only about 3,000 cases had been filed in the state.