Shares of healthcare major GSK (NYSE:GSK) (GB:GSK) nosedived by nearly 9% today after the Delaware State Court decided to allow jury trials in lawsuits associated with the company’s heartburn drug Zantac. The decision means a tsunami of over 70,000 Zantac lawsuits for GSK.
GSK’s Zantac Woes
GSK had withdrawn its heartburn medication from the U.S. market in 2020 over claims that it contained a carcinogen known as NDMA. While GSK plans to appeal the ruling, J.P. Morgan estimates the potential liability for the company from this litigation at around $2-$3 billion, according to Reuters.
The ruling could also impact other Zantac producers Pfizer (NYSE:PFE), Sanofi (NASDAQ:SNY), and Boehringer Ingelheim. Pfizer and Sanofi also plan to appeal the Delaware Court’s decision. The companies noted that there was no reliable evidence indicating that Zantac caused cancer.
Back in 2022, these drugmakers had clinched a victory after the Florida Court dismissed nearly 50,000 Zantac cases. Last month, a claim against Zantac was rejected in Chicago, marking GSK’s victory in the first Zantac case to go to trial in the U.S. This time around too, GSK plans to defend itself. The company noted that the outcome of the litigation will not affect its financial strategies or growth investments.
What Is the Target Price for GSK Stock?
Today’s sharp price decline comes after a nearly 35% jump in GSK’s share price over the past year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average GSK price target of $48.50.
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