Market Report: Zantac Deadline Determines Reprieve for Drug Giants

Market Report: GSK and Haleon shares rise after rare good news on legal battle over ex-heartburn drug Zantac

Shares of GlaxoSmithKline (GSK) and its spin-out Haleon got a boost after rare good news about the pharmaceutical giant’s legal battle over former heartburn drug Zantac.

Developed by GSK, the once-popular drug in the US and UK was pulled from shelves in 2019 over concerns it contained carcinogenic chemicals.

The case has resulted in more than 2,000 lawsuits in the United States, raising concerns that the pharmaceutical giants who sold it could be held liable for large damages.

Legal battle: Zantac was removed from shelves in 2019 amid concerns it contained carcinogenic chemicals

Haleon, which was split from GSK last month, may also be in trouble after issuing a notice that the pharmaceutical company could demand payment to help settle claims for damages.

But a recent ruling by a U.S. judge overseeing the case could mean the statute of limitations could force 70,000 plaintiffs to abandon their claims, analysts at investment bank Citi say. GSK rose 0.3% or 4.4p to 1394.8p after investment bank Citi analysts highlighted that This sets a time limit for when someone is allowed to take legal action.

The rating also pushed Haleon up 1%, or 2.7p, to 266.3p. Citi said that if its projections are accurate, the number of plaintiffs in the lawsuit will be “significantly lower” than initial fears.

In that case, the shares of GSK and French rival Sanofi, which also sold Zantac, could surge by more than 40%. Citi’s estimate should bring relief to both GSK and Haleon.

The FTSE 100 fell 0.7% (52.43 points) to 7427.31 and the FTSE 250 fell 0.5% (88.15 points) to 19,169.72. Markets were able to maintain cautious optimism despite Ofgem’s surge in energy price caps. This leaves millions of UK households suffering an 80% rise in bills from his October.

Conditions were less optimistic on the continent, with consumer confidence in Germany at record lows amid growing recession fears.

“Germany is particularly concerned about rising energy costs and is particularly dependent on external producers, making the situation more difficult. It shows that consumers are taking concrete precautions to prepare for the worst-case scenario,” said Sophie Land Yates, analyst at Hargreaves Lansdowne.

The beneficiary of the looming price cap hike was UK gas owner Centrica, which rose 0.6% or 0.52p to 81.96p.

Brent crude hovered around $100 a barrel amid forecasts that global supplies will remain constrained as potential cuts from OPEC+ cartels offset expected increases in exports from Iran. oil inventories are in the spotlight. Shell he was up 0.6% (13.5p) to 2334p while BP was down 0.4% (1.65p) to 457.8p.

Holiday Inn owner Intercontinental Hotels fell 4.4% or 216 pence down to 4750 pence. For stock, most hotels have reopened.

Rival Whitbread, owner of Premier Inn, was also cut by JP Morgan, lowering its target from 4150p to 4100p. Whitbread was 1.8%, or 47p lower than he was 2507p.

Mid-cap fund manager JTC has revealed plans to acquire New York Private Trust Company, which serves wealthy people. JTC fell 0.3%, or two pence, to 759p.

Meanwhile, computer game maker Tinybuild has acquired rival Konfa Games in a cash-and-stock deal worth up to £4.6m, and the intellectual property portfolio of Bossa Studios, makers of titles such as I Am Fish, for £2.5m. We are planning to acquire. Tinybuild is up 0.4%, or 0.5p to 115.5p for him.

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