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Shares of GSK (NYSE:GSK), formerly GlaxoSmithKline, are down over 8% in premarket Thursday amid mounting concerns about the recalled drug Zantac.
The company is facing lawsuits as it allegedly failed to warn users about the over-the-counter product’s health risks. Zantac was a popular drug that was recalled since it allegedly causes cancer.
Sanofi (EPA:SASY) shares are also down, as much as 9% in European trading today as investors closely watch developments surrounding Zantac litigations. GSK, Sanofi, and Haleon (NYSE:HLN) have lost $40 billion in combined market valuation since Tuesday.
Investors will be focused on an upcoming Illinois case on August 22, as well as some other key court trials that are scheduled for early 2023. Analysts note that the key trial will start in mid-2023.
A Deutsche Bank analyst sees near-term headwinds for both Sanofi and GSK.
“This topic is not new: it has arrived in investor consciousness in recent days it seems, but been rumbling on in the background for a few years. What is true is that it is approaching visibility in the form of first cases. We don’t think the evidence points to this as another glyphosate, but it is very possible we may see a liability of some $bn magnitude incurred which, coupled with negative headlines from the slate of imminently pending cases,” the analyst told clients in a note.
