Yahoo Finance PFE, GSK & Other Pharma Stocks Hit by Zantac Litigation
Shares of GSK plc GSK, Haleon plc HLN and other pharma companies, such as Sanofi SNY and Pfizer Inc. PFE fell on Thursday after the news of potential litigation around the heartburn drug Zantac (ranitidine) did the rounds of the market.
The GSK stock was down 6.7% following the above announcement. Haleon, Pfizer and Sanofi stocks were down 3.4%, 3.3% and 3.9%, respectively, post the circulation of the Zantac litigation news.
In April 2020, the FDA had requested manufacturers to withdraw all prescription and over-the-counter (OTC) Zantac (ranitidine) medicines from the market with immediate effect. The regulatory agency decided to take this step due to a contaminant known as N-Nitrosodimethylamine (NDMA) found in ranitidine drugs.
NDMA is a substance that can cause cancer in humans. In 2019, the FDA became aware of the low levels of NDMA traces found in ranitidineat a laboratory testing. Subsequently, the regulatory body decided to caution the general public against taking ranitidine drugs and instead, consider alternative treatments.
Eventually, the companies and manufacturers decided to withdraw and recall all the ranitidine products from the market.
GSK issued a statement wherein management stated that the FDA and the European Medicines Agency maintained that there is no evidence of a causal association between ranitidine therapy and the development of cancer in patients. GSK decided to defend all claims.
Haleon issued a statement wherein it denied all the claims related to the Zantac litigation and confirmed that it never marketed Zantac in any form in the United States.
In its statement, Pfizer claimed that it sold Zantac between 1998 to 2006, and the withdrawal of Zantac products from the market in 2019 and 2020 did not involve any PFE products.
Sanofi too remains confident about its defence as there isno reliable evidence that Zantac causes any of the alleged diseases claimed in the litigation.
All the above-mentioned companies are the defendants in the lawsuits that claimed Zantac treatment to contain a substance that could cause cancer. Per reports, the first trial is scheduled to begin later this month. What is worse is that unless a clear picture emerges from the litigation, the charges slapped on Pfizer, GSK, Haleon and Sanofi are likely to hurt their stocks even more. It remains to be seen how investors react once the air is clear on the outcome of this litigation.
Zacks Rank
Pfizer, Haleon and Sanofi currently carry a Zacks Rank #3 (Hold) each, while GSK has a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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