UK-based GlaxoSmithKline PLC (GB:GSK) has won the latest U.S. trial concerning its heartburn drug Zantac (ranitidine), amid litigation over alleged cancer risks. The Florida State Court ruled in favour of the company in the Wilson case, stating that GSK’s drug was not responsible for the plaintiff’s illness.
GlaxoSmithKline is a global pharmaceutical company with a presence in roughly 80 countries.
GSK’s Latest Win
In the latest lawsuit, the Florida State Court dismissed the plaintiff’s claim that ranitidine was a significant risk factor for Wilson’s prostate cancer, as it did not meet the Daubert standard for admissible expert testimony under Federal Rule of Evidence 702. This standard requires that testimony be based on scientifically valid reasoning and methodology.
Additionally, the company stated in its update that the court’s ruling is consistent with the prevailing scientific consensus, which finds no credible evidence that ranitidine increases cancer risk.
GSK’s Ongoing Zantac Saga
Once a blockbuster drug for GSK, Zantac was removed from the U.S. market in 2020, following an FDA request due to concerns about NDMA (N-nitrosodimethylamine), a substance classified as a carcinogen.
Since then, GSK has faced thousands of personal injury lawsuits in both federal and state courts. Nonetheless, GSK continues to defend itself against all claims in multiple jurisdictions. Over the years, the litigation has also contributed to increased volatility in GSK’s stock price.
Earlier in August, GSK released its half-year results for 2024 and upgraded its full-year outlook. The company increased its turnover growth forecast to 7%-9%, up from the previous estimate of 5%-7%. Additionally, GSK now expects core operating profit to grow by 11%-13%, an improvement from the earlier 9%-11% projection.
However, the positive figures were dampened by worries surrounding the ongoing Zantac litigation and a bleak forecast for GSK’s Vaccines division.
Is It a Good Time to Buy GSK Shares?
According to the consensus on TipRanks, GSK stock has received a Moderate Buy rating. This rating is backed by six Buy recommendations, six Hold recommendations, and two Sell recommendations. The GSK share price forecast is set at 1,760.17p, indicating a projected increase of 10.3% from the current level.
