GSK Shares Surge Following $2.2 Billion Settlement for 80,000 Zantac Lawsuits

Shares of GSK plc saw a significant increase on Thursday following the announcement that the company has reached settlements regarding approximately 80,000 lawsuits related to its Zantac product in the United States.

As of 3:46 AM (0746 GMT), GSK’s shares were up 6.6% at £1,554.23.

The company has agreed to resolve 93% of the product liability cases currently pending in U.S. state courts, totaling payments of up to $2.2 billion. This settlement comes amid ongoing litigation concerning allegations that Zantac may be associated with cancer; however, GSK insists that there is no credible scientific evidence to support these claims.

The settlements, reached with ten plaintiff firms representing a majority of the lawsuits, are projected to be fully executed by the end of the first half of 2025. The involved firms have advised their clients to accept the settlement terms, indicating a consensus among the plaintiffs.

In a statement, GSK also indicated that it has come to an agreement in principle to pay $70 million to settle a qui tam complaint related to Zantac, which was previously filed by Valisure. This agreement is awaiting final approval from the Department of Justice.

Despite settling the lawsuits, GSK has not admitted liability in either the state court settlements or the qui tam case. The company maintains that these settlements align with its long-term strategy and financial stability, aiming to eliminate uncertainties associated with ongoing litigation.

To accommodate these settlements, GSK plans to report an additional charge of £1.8 billion in its financial results for the third quarter of 2024. This charge will cover costs related to the settlements and the remaining 7% of outstanding product liability cases.

GSK reassures investors that these expenses will be met through existing resources and will not impact its growth strategies or investment plans in research and development.