By Cecilia Butini

Shares in pharmaceutical companies Sanofi SA and GSK PLC jumped in opening trade on Wednesday after a U.S. judge dismissed a series of lawsuits around a heartburn treatment that both companies had marketed.

The lawsuits, which were counted in the tens of thousands, alleged that the drug, named Zantac, could cause cancer. The judge concluded on Tuesday that there was no scientific evidence to support the claim that Zantac's active substance, called ranitidine, was in fact carcinogenic.

At 0830 GMT, shares in Sanofi traded 8.2% higher at EUR92.38, while GSK's were up 12% at 1,559.80 pence.

Sanofi, GSK, but also Pfizer Inc. and Haleon, GSK's former consumer-health division, could have all faced liabilities from the litigation, since they all marketed the drug at some point during its existence on the market.

Tuesday's ruling is multidistrict, meaning that it doesn't apply to single state courts, where more complaints are still active. But the decision bodes well for those too, according to Jefferies analysts, since historically many state decision tend to follow from multidistrict ones. "Plus, economic motivation for plaintiff lawyers is likely now dented," the analysts said in a note.

Still, the decision could be appealed, and while the news should be able to lift up shares following some Zantac-related declines in the past months, there is likely to still be volatility until the issue is fully resolved, analysts at Shore Capital said in a note.

Write to Cecilia Butini at cecilia.butini@wsj.com

(END) Dow Jones Newswires

December 07, 2022 04:13 ET (09:13 GMT)

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