Pharmaceutical stocks GSK (GSK), Sanofi (SNY) and Haleon (HLN) extended deep losses Thursday as worries mount surrounding litigation around recalled heartburn drug Zantac.
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The companies are among the defendants in a series of lawsuits claiming Zantac contains a cancer-causing substance called NDMA. The first trial is set to begin this month in Illinois and, ahead of the court case, the pharmaceutical stocks have plummeted.
As of Thursday’s open, the trio have lost a combined $20 billion in market cap this week alone. In morning trades on the stock market today, shares of GSK, formerly known as GlaxoSmithKline, fell 8.2% near 35.20. Shares of GSK’s recent spinoff, Haleon, toppled 3.3% near 6.30. Sanofi stock declined 5% near 42.90.
Analysts say the litigation could push investors to swear off all three pharmaceutical stocks until there’s more clarity in the litigation. The cases are consolidated into multidistrict litigation. The first will start Aug. 22. Another is scheduled for September, then more are due in February, May and October 2023.
“We do not have a view on the likelihood or magnitude of a potentially negative outcome for Sanofi at this stage, but we do think that even not knowing will be enough to deter some investors,” pharmaceutical stocks analyst Laura Sutcliffe of UBS said in a report to clients.
More to follow.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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