Investing.com -- Shares of GSK plc (OTC:GLAXF) (LON:GSK) jumped on Thursday after the company said that it has reached settlements regarding about 80,000 lawsuits related to its Zantac product in the United States.
At 3:46 am (0746 GMT), GSK was trading 6.6% higher at £1,554.23.
The company has agreed to resolve 93% of the product liability cases pending in U.S. state courts for a total payment of up to $2.2 billion.
This comes as GSK continues to face litigation over claims that Zantac may be linked to cancer, although the company maintains that there is no reliable scientific evidence supporting these allegations.
The settlements, which were reached with ten plaintiff firms representing the majority of the cases, are expected to be fully implemented by the end of the first half of 2025.
The plaintiff firms have recommended to their clients that they accept the terms of the settlement, reflecting a consensus among those involved in the litigation.
“GSK also confirms that it has reached an agreement in principle to pay a total of $70 million to resolve the Zantac qui tam complaint previously filed by Valisure,” the company said in a statement,
This agreement is pending final approval from the Department of Justice.
While GSK has settled the lawsuits, the company has not admitted any liability in either the state court settlements or the qui tam settlement.
The company asserts that the settlements are in the best interests of its long-term strategy and financial stability, helping to eliminate uncertainties associated with ongoing litigation.
To account for these settlements, GSK plans to recognize an incremental charge of £1.8 billion in its financial results for the third quarter of 2024.
This charge will cover the costs associated with the settlements and the remaining 7% of pending product liability cases.
However, GSK assures investors that these expenses will be funded through existing resources and will not alter its growth agenda or research and development investment plans.