(BFM Bourse) – An arbitral tribunal has ruled that the French pharmaceutical group was not liable for potential damages related to Zantac.
Zantac remains a thorny issue, likely to poison the courses of several large pharmaceutical groups. This drug was withdrawn from over-the-counter sale in the United States and Canada in 2019. Its active ingredient, ranitidine, caused this treatment to contain low levels of N-nitrosodimethylamine (“NDMA”), a molecule found in the drinking water or soil but potentially carcinogenic at high doses. The American health authority, the FDA, had noted an overrun of NDMA compared to the authorized thresholds in certain samples tested, which had led to the withdrawal of the drug.
Numerous class action lawsuits and lawsuits have been filed in US courts seeking compensation (Credit Suisse had a total of 77,000 plaintiffs), with plaintiffs alleging Zantac caused various cancers.
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Laboratories, for their part, highlight the fact that the scientific community – including the FDA and the European Medicines Agency – has never found serious evidence showing that Zantac could cause cancer, despite several evaluations. Sanofi has therefore made no provision in its accounts for this dispute.
In December, a federal judge, Robin Rosenberg rejected the appeals of the plaintiffs in this file considering that their complaints were not supported by solid scientific arguments. Other lawsuits are nevertheless taking place before the courts of American states, in particular in California, with potential costs quantified by Bloomberg at a maximum of 7 billion dollars for GSK, AstraZeneca, Boehringer Ingelheim (BI) and Sanofi.
An asset swap in 2017
It is in the context of this case that Sanofi won a legal battle against BI, more precisely an arbitration.
BI had acquired in 2006 the American rights of Zantac without prescription. Sanofi then recovered these rights in January 2017, via an exchange with BI. The pharmaceutical group sold its animal health business to BI and in return BI transferred its consumer health business to BI, which therefore included the American rights to Zantac without a prescription.
A dispute between the two groups broke out, and concerned the responsibility for the potential compensation of the plaintiffs for the period prior to 2017. On this point, an arbitration tribunal of the International Chamber of Commerce decided in favor of the French group, announced Sanofi .
“The court rejected BI’s claim for compensation against Sanofi and confirmed that Sanofi will not be liable for any damages that may arise from the pending Zantac litigation in the United States. This decision is final and not subject to appeal,” the company said.
Clearly, Sanofi does not have to assume BI’s share in this dispute and the French group’s risk is therefore limited to the period when it was actually in charge of marketing the product, i.e. from the beginning of 2017 to the end of 2019, date of drug withdrawal.
The market welcomes this decision which reduces the uncertainty in this file. The Sanofi share thus won 2.4% around 10 a.m., signing the largest rise in the CAC 40. “It’s a sword of Damocles less, they will not be responsible for everything that happened upstream “, of obtaining the rights of Zantac, underlines a financial intermediary.
Sanofi also reassured in its press release that “there is no evidence that taking Zantac in the real world could have harmed consumers due to possible NDMA contamination”.
“Sanofi stands by the safety of Zantac. Given the lack of scientific basis for plaintiffs’ claims, Sanofi remains fully confident in its defenses to this litigation. Sanofi has always acted responsibly,” continued the band.
Julien Marion – ©2023 BFM Bourse
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