Sanofi shaken on the stock market by the Zantac trial

Zantac was pulled from the market in 2020 because it contains a suspected carcinogenic ingredient. BENOIT TESSIER/REUTERS

This drug used against heartburn was taken off the market in 2020.

Tough stock market days for Sanofi. The French pharmaceutical laboratory lost 11% of its value in two sessions: 10.8 billion euros in capitalization went up in smoke. Investors are concerned about the financial consequences of litigation related to Zantac. Used against heartburn, this drug has long been available over the counter in the United States and Canada. Extremely popular, it was one of the first to reach $1 billion in annual sales. But, at the request of US regulators, Zantac was pulled from the market in 2020 because it contains an ingredient that is believed to cause cancer.

Since then, more than 2,000 complaints have been filed in the United States, in particular against Sanofi and the British laboratory GSK, the first to market the drug. GSK shares fell 15% between Wednesday and Thursday. The storm also swept away Haleon, the world leader in consumer health, recently born from the split of a branch of GSK. From the late 1990s, other major pharmaceutical companies (Pfizer, Johnson & Johnson and Boehringer Ingelheim) also marketed Zantac.

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Earlier this week, a note from UBS analysts reminded investors of the impending lawsuits. The first will open on August 22 in Illinois and other large ones will follow in early 2023. The total cost for the laboratories remains difficult to quantify at this stage, but it could be between 10.5 and 45 billion, according to analysts at Morgan Stanley. “The market reaction seems exaggerated for a deal that does not change Sanofi’s future prospects”, believes Valentin Bulle, investment fund manager at Dôm France. Recently, Sanofi indicated that it was not possible to prove that Zantac could cause cancer.

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