GSK reaches billion-dollar settlement and sees significant increase in stock price

The British pharmaceutical giant GSK has agreed to pay up to $2.2 billion to settle lawsuits in the United States, causing the company's shares to rise by 6%. This settlement relates to allegations that the now-discontinued heartburn medication Zantac is carcinogenic. Interestingly, the agreed sum is significantly below some analysts' projections, such as JP Morgan's estimate of $3.5 billion. This settlement will resolve an impressive 80,000 or 93% of the remaining cases in the United States. Analysts from Jefferies emphasized that resolving the lawsuits should "reduce the majority of the Zantac pressure on the stock." Despite the settlement, GSK stressed that no wrongdoing or liability was admitted; the settlements are in the company's best long-term interest to avoid the risk of ongoing litigation. Additionally, GSK will pay $70 million to resolve a related whistleblower lawsuit from a laboratory in Connecticut.