The capitalization of large pharmaceutical companies decreased by $40 billion due to the threat of lawsuits

Shares in pharmaceutical companies GSK, Sanofi and Haleon tumbled on Thursday on fears of possible lawsuits against these companies. These are allegations that GSK’s Zantac and other versions of this remedy for heartburn and stomach ulcers can contribute to the development of cancer. The fall in company shares began a few days ago and intensified yesterday. In total, over the past five days, GSK shares fell by 14.3%, Sanofi – by 12.5%, Haleon – by 13.5%. Estimated Bloombergthe total capitalization of companies decreased by $40 billion.

GSK has been selling Zantac since the 1980s, and in 1988 it became the world’s best-selling drug. Subsequently, many pharmaceutical companies began to sell their versions of this drug. The fact that Zantac and other drugs in which the active ingredient is ranitidine may be carcinogenic has been said since 2018. Regulators have tested these drugs, but the results have been mixed. Both the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) found no evidence of a causal relationship between these drugs and cancer. However, most pharmaceutical companies themselves have decided stop sale of Zantac and other versions of the drug, and in 2020 the FDA required the withdrawal of such drugs from US pharmacies.

There are about 2,000 lawsuits in the US related to Zantac and other similar drugs, one of which is due to start litigation as early as August. Apparently, it was this fact that attracted the attention of investors and caused the fall in the shares of pharmaceutical companies. According to Barclays analyst Emily Field, the reason for this was precisely the more active discussions of the trial and the situation as a whole. “I think the panic … really comes down to the psychology of the market, not that someone has learned something new,” Ms. Field said.

Yana Rozhdestvenskaya