Pharmaceutical giant GSK has revealed it has settled a lawsuit relating to discontinued heartburn drug Zantac, which was alleged to be linked to cancer.
Shares in GSK jumped after it said an upcoming trial was cancelled but that it does not admit liability.
The company hit back at allegations last year that the use of Zantac, known chemically as ranitidine, increases the risk of cancer in patients.
The drug was owned by GSK but distribution was halted and it was recalled in 2019 after regulators raised concerns that the product contained potential cancer-causing impurities.
GSK said the claims were “meritless” and that scientific evidence from 11 studies shows there is no cancer risk in the drug.
Nevertheless, it has faced a series of lawsuits including the case brought by California resident James Goetz, which was due to go to trial on July 24 in front of a jury.
GSK revealed it paid a £45 million legal bill last year in dealing with the various claims.
On Friday, the company said it had reached a confidential settlement with Mr Goetz, meaning the case was dismissed, in order to “avoid distraction” surrounding the lawsuit rather than indicating it admitted failures.
It said: “The settlement reflects the company’s desire to avoid distraction related to protracted litigation in this case.
“GSK does not admit any liability in this settlement and will continue to vigorously defend itself based on the facts and the science in all other Zantac cases.”
Shares in GSK leapt by around 6% on Friday morning.
Danni Hewson, head of financial analysis at AJ Bell, said: “News pharmaceutical giant GSK has settled a case in California alleging its Zantac heartburn medication caused cancer, while crucially admitting no liability, is not a full stop on the saga but is the latest punctuation point in what shareholders will hope is its final stanza.
“As it begins to put this issue behind it, focus will turn to its efforts to catch up with its close UK peer AstraZeneca which has drastically outperformed it in share price terms in recent years.”
