GSK stock sinks after court allows Zantac lawsuits to proceed

Shares of Britain-based pharmaceutical company GSK plc (GSK) — formerly known as GlaxoSmithKline — are sliding in pre-market trading and into Monday's session open following a court ruling that has approved more than 70,000 lawsuits to go forward over heartburn medication Zantac's alleged links to cancer.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video transcript

Let's take a look at some trending tickers here this morning.

Shares of GSK they're plunging after a court ruling, stating the drug maker must face trials over claims that its heartburn medication, Zantac causes cancer.

You're taking a look at shares down about 8% here on this news despite year to date, the company being up by about 19% at least here in 2024 and over the past 52 weeks being up by about 30 this could mean a potential hit financially.

Ultimately, we'll see what the proceedings look like here and where the ultimate damages could net out at for GSK here.

Yeah, exactly.

I think that's a big question at this point.

Here, we are looking at shares under a bit of pressure here, at least in the early action you're looking at where it closed on Friday and that one year gain that we've seen of just over 30%.

But again, when it comes to this ruling, exactly what this means here for the company going forward.

Lots of questions here.

Shares are off just around 8%.

So off the lows of the morning have been off just over 10% shortly after this news broke.

But again, this is a stock that Wall Street, there's 10 holds on this right now.

Only three sale ratings compared to 15 buys.

So many are still optimistic just about some of the longer term trends that we'll see from GSK.

But obviously, when you see a move to this extent here, like we're seeing today, there are some concerns at least short term, what exactly this is going to mean for a Glass E Smith client's business.

Yeah, GSK expected to appeal and also they uh had put out a statement saying that the studies, oh, got that one.

Right.

Looking at human data regarding the use of raNITIdine can't get them all the uh scientific consensus is that there's no consistent or reliable evidence that it increases the risk of any cancer.

We'll see how much that defense holds up.