Haleon‘s CEO Brian McNamara on Tuesday said that the company is not liable for any claims that may arise from U.S. litigation over the heartburn drug Zantac. More than 2,000 legal cases related to Zantac have been filed in the United States over allegations that the compound contains a probable carcinogen.
Zantac, originally marketed by a forerunner of GSK, has been sold by several companies at different times, including Pfizer, Boehringer Ingelheim and Sanofi as well as a plethora of generic drugmakers.
According to a report by news agency Reuters, Haleon, spun out of GSK as an independent company in July as the world’s biggest standalone consumer health business, comprises consumer health assets once owned by GSK and Pfizer.
Haleon has repeatedly said that it 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 any damages are accrued as a result of U.S. litigation over Zantac, Haleon had never agreed to accept a share of any potential such liabilities.
“We felt like it was important that all our shareholders were aware of that stance,” he said.
Uncertainty around the outcome of the litigation triggered investor concern last month, wiping billions off the market value of Haleon – alongside GSK, Sanofi and Pfizer – although some of those losses have been since pared back, as reported by Reuters. Shareholders fear a worst-case scenario where costs run into billions of dollars, as happened in cases involving Merck & Co’s (MRK.N) painkiller Vioxx and Bayer’s glyphosate-based weedkiller.
In a note last week, Credit Suisse analysts estimated pre-tax Zantac liabilities for Haleon could be in the region of $200 million to $400 million. In a statement on Tuesday, Haleon said it had rejected indemnification requests from GSK and Pfizer on the basis that the scope of the indemnities set out in the joint venture agreement only covers their consumer healthcare businesses as conducted when the JV was formed in 2018.
“We do not agree with Haleon’s position. GSK believes that there are grounds for it to bring indemnification claims in respect of certain potential liabilities, including against Haleon,” a GSK spokesperson said as quoted by Reuters. Haleon shares were up 1.4% as of 0750 GMT, while shares in GSK (GSK.L) were down 0.2%.
Haleon on Tuesday also posted detailed results for its performance in the six months ending June 30. Adjusted profit per share over the period was 9.6 pence per share, beating expectations of 8.85 pence per share in company-compiled consensus estimates. The company also stood by its forecast for organic revenue growth in the region of 6% to 8% for 2022.
(With inputs from Reuters)