UK – Haleon, the FTSE 100-listed group has rejected requests from GSK and Pfizer to provision for costs related to the heartburn drug, Zantac lawsuits in the US.
“Haleon has notified GSK and Pfizer that it rejects their requests for indemnification 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,” it said as part of its results statement.
Haleon has repeatedly said that it never marketed Zantac in any form in the United States or Canada, either as Haleon or as GSK Consumer Healthcare.
The group 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 business as conducted when the joint venture was formed in 2018.”
At that time, neither GSK nor Pfizer marketed OTC Zantac in the US or Canada, it said.
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.
Zantac was pulled from the US market after Food and Drug Administration investigation into the levels of N-nitrosodimethylamine (NDMA) in the drug. NDMA can cause cancer when consumed in large quantities.
Worries over Zantac have cast a shadow over Haleon’s first months of independence after it became the only listed standalone consumer health company of significant size in July.
Sanofi and Johnson & Johnson are also preparing to spin off their consumer health businesses.
Meanwhile, Haleon shares recouped some of their losses since being spun out of GSK earlier this year, including a 13.4 percent increase in revenues to £5.2bn (US$5.9 billion) and a 22 percent jump in profits.
GSK shares have lost 19 percent since news broke of the legal claims in early August, with the issue weighing heavily on Pfizer’s and a slew of pharma stocks.
Haleon lost around a quarter of its value since listing at 330p in mid-July to a low of just over 241p, though they have rallied slightly this month.
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