With litigation looming over the heartburn drug Zantac, investors in GSK and Sanofi last week sent the companies' share prices down sharply. But on Tuesday, those companies—and in particular GSK—received a piece of good news as the plaintiff in the first Zantac trial scheduled in the U.S. moved for a voluntary dismissal.
Still, the news wasn't what it seemed at first glance, RBC Capital Markets analysts pointed out on Wednesday. Counsel for Joseph Bayer filed the motion for voluntary dismissal because he could not proceed for "personal health reasons," Reuters reports. Bayer can refile the case within a year, his lawyer told the news service.
In addition, sources told Bloomberg that generic drugmakers Dr. Reddy's, Perrigo, Sun Pharma and Teva have agreed to a combined settlement of $500,000 with Bayer after he alleged that the medication caused his esophageal cancer.
While GSK celebrated the outcome, RBC analysts said the development "neither helps nor hinders any of the positions of the parties involved."
GSK faces more than 3,000 Zantac lawsuits and Sanofi must contend with at least 2,850—in addition to massive class-action suits. GSK was quick to point out that it did not pay a settlement in the Bayer case.
Two years ago, Zantac was pulled from the market when it was linked to unacceptable levels of N-nitrosodimethylamine, a potential cancer-causing agent, sparking a wave of litigation against its developer GSK and its former commercial partners Boehringer Ingelheim, Pfizer and Sanofi, as well as several generic manufacturers.
Last week, GSK and Sanofi insisted that there was no scientific evidence that Zantac causes cancer, both pointing out that the level of carcinogen contained in the drug is lower than the amounts found in common foods such as packaged meats and frozen fish.
But counsel for plaintiffs in a multi-district litigation (MDL) in the Southern District of Florida say they have a strong case.
“Sanofi, GSK, and other defendants in this litigation have issued false and misleading statements on the science related to Zantac," the plaintiff attorneys said in a statement on Fruday, before the result of the Bayer case. "Ultimately, the overwhelming body of science supports the fact that (Zantac) degrades into NDMA, a chemical recognized by the FDA as a Class 1 genotoxic carcinogen, and causes cancer."
The multi-district litigation (MDL) involves approximately 50,000 claims, the lawyers said, with five cancers at issue—bladder, esophageal, gastric, liver and pancreatic.
GSK points out that the MDL originally identified 10 cancer types but has since removed five from consideration. Those were breast, kidney, colorectal, prostate and lung cancer.
Bayer's case was set to go to trial on Monday in Illinois, Reuters reports. The next trials are set to begin in Illinois and California in February of next year, GSK said.
Editor's note: This story was corrected to note the reasoning for Bayer's voluntary dismissal filing.