From Morningstar: 2024-10-10 20:01:00

GSK has agreed to settle the majority of Zantac lawsuits in US state courts for up to USD 2.2 billion. This news caused shares to rise nearly 7%, and Morningstar maintains a fair value estimate of £22/$54 with a wide economic moat rating.

The settlement resolves 93% of the pending cases related to the heartburn drug, amounting to approximately 80,000 cases in US state courts. Additionally, a separate settlement of $70 million was announced to resolve a previous complaint.

Ten law firms representing claimants are recommending acceptance of the settlement, expected to be fully implemented by the first half of next year. GSK will recognize a charge of £1.8 billion (USD 2.3 billion) in the third quarter for these settlements and remaining pending cases.

Although the settlement amount is significant, it eliminates a major risk for GSK, allowing investors to focus on the company’s product portfolio and pipeline potential going forward.



Read more at Morningstar: GSK: Zantac Settlement Was Big, But Removes Uncertainty