In October, when GSK agreed to a $2.2 billion settlement to resolve approximately 80,000 lawsuits brought by users of Zantac, it appeared that the drugmaker’s legal issues with the heartburn treatment were largely in its rearview mirror.
But four months later, the company is embroiled in more Zantac litigation—this time with investors.
On Tuesday in federal court in Pennsylvania, a group of shareholders filed a proposed class-action complaint, accusing GSK of hiding an internal report which suggested that Zantac might contain a cancer-causing compound.
The lawsuit claims that GSK scientist Richard Tanner discovered in 1982 that when ranitidine interacted with nitrites in food that it could create a carcinogenic compound, N-nitrosodimethylamine (NMDA). The investors say that GSK “buried” Tanner’s findings.
The suit also alleges that GSK assured investors that the company, the FDA and the European Medicines Agency concluded independently that there was no evidence of a link between Zantac and cancer.
GSK “engaged and participated in a continuous course of conduct to conceal adverse material information about the company’s financial well-being, operations and prospects,” the complaint reads.
The investors are seeking a jury trial and damages against GSK for violating federal securities laws. The class action is open to those who purchased shares in the company between Feb. 5, 2020 and Aug. 14, 2022.
While GSK has moved to resolve the Zantac litigation, the issue weighed on the company's stock price in recent years. During a five-month stretch in 2022, for example, the company's share price fell by about 38% as investors came to grips with the situation.
GSK did not respond to a request for comment.
GSK began selling Zantac as a prescription drug in Europe in 1981 and in the U.S. in 1983. It became a mega-blockbuster before GSK lost its patent protection to Zantac in 1997 and the company subsequently licensed its rights to pharma giants such as Pfizer, Sanofi and Boehringer Ingelheim.
In 2020, after an independent lab warned the FDA of a potential carcinogen in ranitidine—which is the main ingredient in Zantac—the U.S. regulator ordered it to be removed from shelves.