Haleon believes it will not be liable for claims that may arise from US lawsuits over the heartburn drug Zantac, the CEO of the London-listed company, Brian McNamara, told Reuters on Tuesday.
More than 2,000 lawsuits related to Zantac have been filed in the United States over allegations that the compound contains a likely carcinogen.
Zantac, originally marketed by a precursor to GSK, has been sold by several companies at different times, including Pfizer, Boehringer Ingelheim and Sanofi, as well as a plethora of generic drug manufacturers.
Haleon, which emerged as an independent company from GSK in July as the world’s largest standalone consumer health company, includes consumer health assets once owned by GSK and Pfizer.
Haleon has repeatedly stated that it has never marketed Zantac in any form in the United States, either as Haleon or as GSK Consumer Healthcare.
In an interview with Reuters, McNamara reiterated that if damages were to arise from US lawsuits over Zantac, Haleon would never have agreed to accept any portion of any such liabilities.
“We felt it was important that all our shareholders were aware of that position,” he said.
Uncertainty over the outcome of the lawsuit sparked investor concerns last month, wiping out billions of Haleon’s market value — alongside GSK, Sanofi and Pfizer — though some of those losses have since been reduced.
Shareholders fear a worst-case scenario with costs running into the billions of dollars, as happened in Merck & Co’s painkiller Vioxx cases. and Bayer’s glyphosate-based weed killer.
In a note last week, analysts at Credit Suisse estimate that Haleon’s pre-tax Zantac liabilities could be in the region of $200 million to $400 million.
In a statement on Tuesday, Haleon said it had rejected compensation claims from GSK and Pfizer on the grounds that the scope of the compensations set forth in the joint venture agreement relate only to their consumer health care activities as conducted when the JV in 2018 was founded.
“We do not agree with Haleon’s position,” said a GSK spokesperson.
“GSK believes there are grounds for making indemnification claims in respect of certain potential liabilities, including against Haleon.”
Pfizer was not immediately available for comment.
Haleon shares rose 1.4% as of 0750 GMT [on Sept. 20]while shares in GSK fell 0.2%.
Haleon also released detailed results for its performance in the six months ended June 30 on Tuesday.
Adjusted earnings per share for the period were 9.6 pence per share, beating expectations of 8.85 pence per share in the company’s consensus estimates.
The company also stuck to its forecast for organic sales growth in the region of 6% to 8% for 2022.
(Reporting by Natalie Grover in London, additional reporting by Lucy Raitano; editing by Kirsten Donovan and Jason Neely)
Photo: Zantac packages on display at a Rite Aid store on Monday, September 30, 2019 in New York. Photo credit: TSWT Photo/Mark Lennihan.
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