Sanofi's Zantac settlement is worth $100M, or $25K per claimant: Bloomberg

Sanofi will pay $100 million—or approximately $25,000 each—to roughly 4,000 claimants who filed lawsuits saying that the French company failed to warn users that its heartburn medicine Zantac (ranitidine) can cause cancer. Bloomberg reported the figure, citing sources familiar with the deal.

News of the agreement surfaced early this month but did not include a settlement figure. Sanofi acknowledged the settlement three weeks ago but refuses to address the size of the settlement.

“We will not comment on such speculation or rumors,” a Sanofi spokesperson said in an emailed statement. “As we have stated previously, the financial terms of Sanofi’s agreement are confidential.”

The key question now is whether Sanofi and another seller of Zantac, GSK, can expect to pay a similar per-head figure to free themselves from litigation in Delaware, where approximately 75,000 Zantac cases have been consolidated, including about 20,000 against Sanofi.

The recent settlement was made to resolve most of the claims in U.S. states, aside from those that have been incorporated in Delaware.

Investors reacted positively to the Bloomberg report as it seems to allay fears that the companies will have to pay a much larger sum to resolve the cases. While Sanofi’s share price increased by 1.7% by mid-afternoon on Monday, GSK’s went up by 2.3%.

The companies and others who face Zantac litigation—including Boehringer Ingelheim and Pfizer—got a huge win in 2022 when a Florida district judge rejected the science backing the claims that Zantac can cause cancer. The ruling freed the drugmakers from approximately 50,000 federal cases that had been consolidated in the Florida court.

Throughout the ordeal, the companies have maintained that Zantac can not cause cancer.

“Sanofi has vigorously defended the Zantac litigation since the outset and will continue to do so,” the company said. “Consistent with the federal court’s ruling that plaintiffs had insufficient evidence that ranitidine can cause plaintiffs’ alleged cancers, the medical, scientific, and regulatory communities have extensively evaluated and have found the allegations of the plaintiffs that Zantac causes cancer to be without merit.”

Sanofi’s exposure to litigation is not as pronounced as that of GSK, which developed the drug and captured FDA approval for it in 1983. Over the last 10 months, GSK has settled individual Zantac cases in California to avoid jury trials. The company faces more claims than the other companies, with Reuters reporting 79,000 outstanding cases in October of last year.

Sanofi acquired Zantac as an over-the-counter treatment in 2016 by way of an asset swap with Boehringer. Sanofi pulled Zantac off the market in 2019 when an online pharmacy, Valisure, raised questions about its contents.

“Sanofi is settling these cases, not because we believe the claims have any merit, but rather to avoid the expense and ongoing distraction of the litigations. No concessions of liability have been made,” Sanofi added. “The amount that would be paid reflects the limited time during which Sanofi marketed Zantac and the strong defenses available in these cases. The resolution of these cases will have no material financial impact.”

In 2020, the FDA instructed all companies to take Zantac off the market after it confirmed that the compound’s main ingredient ranitidine can transform into a possible carcinogen over time or when exposed to high temperatures. Zantac has since returned to the market with a new formulation that does not include ranitidine.

Last year, an International Chamber of Commerce arbitration tribunal sided with Sanofi when Boehringer claimed that the Paris drugmaker agreed to indemnify it from future liabilities on cancer claims against Zantac.