Pfizer late Thursday said it has ‘significant defences’ against Zantac litigation, while Haleon revealed it is ‘not a party’ to any claims.
Fears about the heartburn treatment have hit the pharma stocks.
Pfizer shares closed 3.3% lower in New York on Thursday. The stock slipped a further 0.1% after-hours trade. Recent GSK PLC spin-off Haleon suffered a 6.2% slide in London on Thursday but was up 1.2% early Friday.
GSK itself had lost 8.1% but was up 4.2% early Friday.
Pfizer said it sold Zantac products between 1998 and 2006. By the time there was a withdrawal of Zantac products from the market in 2019 and 2020, Pfizer had already stopped selling it, the company explained.
Zantac was withdrawn after the US Food & Drug Administration in 2019 warned that the product contained levels of NDMA, a probable human carcinogen - a substance which has been linked to cancer.
‘Pfizer has significant defences to this litigation and there are significant legal and factual issues that remain to be addressed by the courts,’ it said.
‘Pfizer also has substantial indemnification claims against others, which have been acknowledged by several manufacturers in their disclosures. As a result, we believe at this time that the outcome of the litigation is not likely to be material to Pfizer.’
Haleon said it is not aware of any material developments in relation to Zantac since the start of June. The spin-off of Haleon from GSK was completed in mid-July; the consumer healthcare business previously had been run as a joint venture with Pfizer, which owned just under a third.
Haleon said that it is ‘not primarily liable’ for any over-the-counter or prescription claims involving Zantac.
However, it cautioned it may need to eventually compensate both GSK and Pfizer should the duo come into the legal cross-hairs.
Also on Thursday, Sanofi SA and GSK issued statements on Zantac.
Ranitidine, sold under the name Zantac, was offered over-the-counter in the US by French drugmaker Sanofi and was originally manufactured by GSK.
In late 2019, Sanofi recalled the over-the-counter treatment in the US and Canada over possible contamination fears. By April 2020, the FDA had ordered the drug and all its generics be withdrawn from drug store shelves.
Sanofi said that as of August 1, it was aware of 2,850 personal injury plaintiffs in the US. When factoring in additional Zantac cases that do not include Sanofi, this number rises to 3,450.
Sanofi noted that there are other potential personal injury claimants who, in lieu of filing a court case, have instead joined a registry of ‘unfiled’ claims.
‘Over time, the number of unfiled claims alleging either Rx and/or OTC use and implicating a variety of defendants in these actions has exceeded 150,000 – a significant number of these claims, however, do not implicate Sanofi,’ it said.
GSK, meanwhile, said it has been named as a defendant in around 3,000 filed personal injury cases in US federal and state court and ‘numerous’ unfiled claims. Class actions have also been filed, it said.
Outside the US, there are ‘several class actions and in excess of 100 personal injury cases’ pending against GSK in Canada, along with a class action in Israel.
Sanofi closed down 3.3% in Paris on Thursday.
Here is what you need to know at the London market open on Friday:
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MARKETS
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FTSE 100: down 0.3% at 7,487.31
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Hang Seng: up 0.3% at 20,143.82
Nikkei 225: closed up 2.6% at 28,546.98
S&P/ASX 200: closed down 0.5% at 7,032.50
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DJIA: closed up 27.16 points, 0.1%, at 33,336.67
S&P 500: closed down 0.1% at 4,207.27
Nasdaq Composite: closed down 0.6% at 12,779.91
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EUR: down at $1.0311 ($1.0328)
GBP: flat at $1.2200 ($1.2205)
USD: up at JP¥133.23 (JP¥132.79)
Gold: up at $1,791.75 per ounce ($1,789.51)
Oil (Brent): up at $99.22 a barrel ($98.87)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday’s key economic events still to come
1100 CEST EU industrial production
0930 BST UK business investment
1230 BST UK NIESR monthly GDP tracker
0830 EDT US import & export price indices
1000 EDT US Michigan consumer sentiment index
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The UK economy shrank marginally in the second quarter of the year from the first, according to the Office for National Statistics, as the country grapples with cost-of-living increases. On an annual basis, UK gross domestic product expanded 2.9% in the second quarter, slowing sharply from 8.7% growth in the first quarter. The latest reading just beat the market forecast, cited by FXStreet, for growth of 2.8%. On a quarterly basis, the UK economy contracted 0.1% in the second quarter following growth of 0.8% in the first quarter. Market consensus had pointed to a 0.2% contraction. In June, the final month of the second quarter, the UK enjoyed an extra bank holiday to mark the Queen’s Platinum Jubilee. UK GDP shrank 0.6% in June month-on-month, having expanded 0.4% in May. The print beat the market estimate for a 1.3% decline.
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The UK’s global competitiveness could be harmed by too much political interference in the regulation of the City of London, the Bank of England governor said. Tory leadership contenders Liz Truss and Rishi Sunak have both said they want to reform key EU financial regulations, and give politicians more power to intervene in regulators’ decisions, in an effort to boost the nation’s economy. In an open letter to the Treasury Select Committee, dated July 27, Andrew Bailey said regulatory independence was vital to the nation’s ‘international standing’. His comments came in the wake of the government introducing a Financial Services & Markets Bill aimed at revoking retained EU law on financial services.
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An oil and gas body has urged the candidates in the running to become UK prime minister to scrap the windfall tax on profits as soon as possible. In open letters to both candidates, Offshore Energies UK claimed the sector would pay about £13.8 billion into the Treasury next year as a result of the windfall tax and corporation taxes. But the body raised concerns about the potential impact the law could have on investor confidence in the industry, urging both Truss and Sunak to scrap it ‘when possible’ and not to extend it beyond the 2025 sunset clause.
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BROKER RATING CHANGES
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Credit Suisse raises LSEG price target to 9,100 (8,900) pence - ’outperform’
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Jefferies raises SIG price target to 35.10 (30.80) pence - ’hold’
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Peel Hunt cuts RPS Group to ’hold’ (’buy’) - target 206 pence
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COMPANIES - FTSE 100
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Paddy Power-owner Flutter Entertainment talked up its progress in the lucrative US sports betting market. Flutter said it saw positive momentum in the first half of 2022, driven by recreational player growth. For the six months to June 30, revenue rose 11% to £3.39 billion from £3.05 billion last year, but Flutter swung to a pretax loss of £51 million from a £77 million profit. During the half it said it increased recreational customer base by over one million monthly players to 8.7 million, 14% higher than the prior year. Flutter said the rapid expansion of its US business FanDuel was key to this growth, along with good underlying player momentum in the UK&I and Australia. In the US, its sports betting market share accelerated to 51% in the second quarter, driven by FanDuel’s ‘efficient’ customer acquisition and strong operational execution. Looking ahead, Flutter expects full-year performance in line with market expectations. ‘The second half of the year has started well, and we look forward to the start of the football seasons in both the US and Europe,’ said Chief Executive Officer Peter Jackson.
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AstraZeneca and Daiichi Sankyo said their drug conjugate Enhertu has been approved for patients in the US with unresectable or metastatic non-small cell lung cancer. Enhertu, whose generic name is trastuzumab deruxtecan, is a specifically engineered HER2-directed antibody drug conjugate and is jointly developed and commercialised by AstraZeneca and Daiichi Sankyo. It can now be used for ‘adult patients with unresectable or metastatic non-small cell lung cancer whose tumours have activating HER2 (ERBB2) mutations, as detected by a Food & Drug Administration approved test, and who have received a prior systemic therapy,’ AstraZeneca said. Following US approval, AstraZeneca will pay $125 million to Daiichi Sankyo as a ‘milestone’ payment, it added.
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HSBC’s largest shareholder, Ping An Insurance, will press on with its call for the bank to spin off its Asia operations despite pushback from executives, Bloomberg reported. The restructuring bid highlights HSBC’s precarious position as US-China tensions rise, with some observers doubting whether Europe’s largest lender can continue to straddle east and west. Chinese insurer Ping An believes it is in need of urgent and radical change, and was not swayed by arguments against the move presented by the bank’s leaders last week, Bloomberg said, citing an unnamed source. HSBC has listed 14 reasons against changing its structure, including a lengthy transition period that could last up to five years, as well as loss of direct access to US dollars. Chief Executive Noel Quinn said last week that an ‘alternative structure’ would have a ‘negative’ impact on the bank and would not deliver increased value to shareholders.
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COMPANIES - FTSE 250
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Fellow gambling operator 888 Holdings said it saw continued strategic progress in the first half following its purchase of the non-US assets of William Hill. For the six months to June 30, revenue was £332.1 million, down 13% from £380.9 million last year, and pretax profit was £14.4 million, down 66% from £54.2 million. 888 attributed the decline in profit to increased legal and professional costs associated with the acquisition of the William Hill businesses and costs related to the disposal of its Bingo business. Looking ahead, 888 said revenue in the second half is expected to be in line with revenue in the first half of 2022. ‘The group’s financial performance in the period primarily reflects market conditions in the UK. However, we believe the proactive actions we have taken to increase player protections and drive higher standards of player safety have put the group in an even stronger position for the future,’ said Chief Executive Officer Itai Pazner.
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COMPANIES - SMALL CAP
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Octopus Renewables Infrastructure Trust said it agreed to acquire a 51% ownership interest in the Crossdykes onshore wind farm in Scotland. The remaining 49% is being acquired by another Octopus-managed fund, the renewable energy investor explained. Crossdykes has a total installed capacity of 48 megawatts, made up of 10 Nordex turbines. Upon completion, the acquisition is expected to take Octopus’s operational portfolio capacity to 608 megwatts. ‘This significant investment into one of the largest unsubsidised wind farms in the UK adds a substantial operational asset to our portfolio,’ said Chair Phil Austin. Alongside the acquisition, Octopus said it has extended its revolving credit facility by using the accordion feature, bringing the facility’s total to £246 million.
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Friday’s shareholder meetings
iEnergizer Ltd - AGM
Ironveld PLC - GM re proposals to remove directors
Old Mutual Ltd - GM
Pineapple Power Corp - AGM
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