The makers of ranitidine-based products, such as Sanofi, GSK and Haleon, are reeling from lawsuits related to carcinogenic contamination that could result in billions of dollars in damages.
The makers of ranitidine-based products such as Sanofi’s Zantac are reeling from multiple lawsuits related to carcinogenic contamination of products. Market shares of Sanofi US, GlaxoSmithKline and Haleon are down approximately $40 billion, according to Bloomberg.
Numerous lawsuits are winding their way through the courts, including one in Illinois that is set for late August. Other trials are expected to begin in the first few months of 2023.
With those payouts on the line, investors have begun a mass sell-off of shares of Sanofi, GSK and Haleon. Shares of Sanofi have fallen more than 20% in two days, while GSK is down 12% and Haleon, its consumer goods spinoff that launched this year, is down 13%, Bloomberg reported.
Plaintiffs are suing the companies over allegations that the known carcinogens within the ranitidine-based products, particularly N-nitrosodimethylamine (NDMA), have contributed to the development of cancer. The lawsuits echo similar litigations against Bayer and its subsidiary Monsanto for carcinogens in the weed killer Roundup that plaintiffs allege led to their own cancer diagnoses.
GSK, Haleon and Sanofi, as well as Pfizer, which sold ranitidine for a short period, could face up to $45 billion in damages. Deutsche Bank analyst Emmanuel Papadakis warned that the ranitidine legal issues “are likely to act as a short-term headwind for both GSK and Sanofi shares,” in a Thursday note, Bloomberg reported.
The Potential Risks of Ranitidine
Two years ago, the U.S. Food and Drug Administration called for the removal of ranitidine-based products due to the risks of contamination. The regulatory agency conducted an investigation into the potential contamination. In its 2020 findings, the FDA said the impurity in some ranitidine products increases over time and when stored at higher than room temperatures. The regulator also said they may result in consumer exposure to unacceptable levels of this impurity, BioSpace previously reported.
Prior to that call from the FDA, Sanofi and GSK had already removed some lots of ranitidine-based products from the shelves when the issue was first reported in the fall of 2019.
Ranitidine is an H2 (histamine-2) blocker. It is designed to reduce the amount of acid in the stomach. Zantac was the most popular version of this medication sold in pharmacies throughout the world. Investigations of the drug revealed NDMA was found in the product.
NDMA is a known environmental contaminant and is found in water and foods, including meats, dairy products and vegetables. In large amounts, NDMA can cause health problems, but the FDA said the levels it initially found in ranitidine were low. However, with concerns that the levels could increase over time while in storage, the prudent thing to do was remove them from the market.
Sanofi Downplays Risks of Litigation
NDMA contamination isn’t limited to ranitidine. The FDA has previously issued warnings about NDMA contamination in various blood pressure treatments. Those concerns led to companies like Teva Pharmaceuticals issuing a recall of bulk Losartan Potassium after NDMA was discovered in the manufacturing process.
While none of the three companies replied to Bloomberg’s request for comment on the litigation, last month, France-based Sanofi, facing more than 70,000 complaints, downplayed the risks of litigation during its earnings call. Company officials said there is “no reliable evidence” that its Zantac product, at one time the best-selling medicine, causes cancer. Sanofi suggested that plaintiffs will have a difficult time proving their case in court, Bloomberg reported.
Later Thursday, Sanofi issued a statement calling the news flow surrounding the Zantac litigation “highly speculative.” Sanofi also stated that “there have not been any material developments” and that the company remains confident in its legal defenses.
In its own statement, GSK focused on the science. “FDA and EMA have concluded there is no evidence of a causal association between ranitidine therapy and the development of cancer,” company representatives said. The statement also reiterated Sanofi’s claim that there have been no new material developments.
Last year, there was public outcry over allegations of deleted emails at Sanofi that plaintiffs say could have shown the company knew about the carcinogens but chose to ignore them to protect sales. Sanofi was conducting an internal investigation into the loss of emails, many of which are alleged to have been tied to Michael Bailey, the former head of regulatory affairs for Sanofi’s U.S. Consumer Healthcare division. Bailey is now head of scientific affairs for North America in the company’s consumer health business.
Prior to its official spinout from GSK, Haleon noted it has “certain indemnification obligations to GSK and Pfizer” related to ranitidine and other potential issues. Because of this, some analysts suggest Haleon’s role in litigation will be limited, Bloomberg reported.
