Pfizer (PFE) shares slumped lower Thursday amid investor concern over potential litigation linked to the popular, but now-discontinued, heartburn treatment known as Zantac.
A Deutsche Bank note, published Thursday, suggested that companies which marketed Zantac could be liable for damages if pending cases conclude that it was sold to consumers despite its now-documented links to cancer.
The U.S. Food & Drug Administration pulled Zantac from the shelves in 2020 following tests that indicated high levels of nitrosodimethylamine, or MDMA, a known carcinogen, citing the risk that ranitidine (its generic drug name) "when stored at higher than room temperatures ... may result in consumer exposure to unacceptable levels of impurity."
Pfizer marketed Zantac between 2000 and 2006 and currently owns a 25% stake in Haleon, the consumer health division spun out of GSK Plc earlier this year. Haleon, GSK and France's Sanofi were all named by analysts at companies that could face Zantac-related litigation risk.
"A number of lawsuits have been filed against Pfizer in various federal and state courts alleging that plaintiffs developed various types of cancer, or face an increased risk of developing cancer, purportedly as a result of the ingestion of Zantac," Pfizer said in its most-recent 10-K filing with the Securities and Exchange Commission.
"The significant majority of these cases also name other defendants that have historically manufactured and/or sold Zantac. Pfizer has not sold Zantac since 2006, and only sold an OTC version of the product," the filing added.
Pfizer shares were marked 3.6% lower in early afternoon trading Thursday to change hands at $48.14 each. GSK's U.S-listed shares fell 9.7% to $34.58 each while Haleon was down 5.5% at $6.16 each.
Pfizer posted record second quarter revenues late last month, while nudging its full-year profit forecast higher, amid improving sales of its Covid treatment and vaccines.
Pfizer earned $2.04 per share for the three months ending in June, with revenues rising 46.2% to a record-high $27.42 billion. Around $8.85 billion of Pfizer's total revenue came from sales of its Comirnaty vaccine, while Paxlovid contributed $8.1 billion.
Looking into the 2022 financial year, Pfizer lifted the lower end of its adjusted earnings guidance by 5 cents per share, and now forecasts a range of between $6.30 to $6.45 per share.
