The British pharmaceutical company GSK reached a landmark agreement on Thursday for a potential payout of up to $2.2 billion to settle the vast majority of lawsuits related to the acid blocker Zantac. The company stated late Wednesday that it had reached agreements with ten plaintiff firms representing approximately 80,000 individuals. The settlement covers an impressive 93 percent of all claimants, thereby ending the protracted legal disputes that have burdened GSK in recent years.

The shares of GSK responded positively to the news and initially rose by 6 percent in trading on the NASDAQ, before gaining a further 3.2 percent at closing to reach 2.2 billion US dollars. Investors welcomed the settlement as a relief for the company and as a step towards focusing on other strategic challenges, such as the sluggish rollout of the RSV vaccine Arexvy.

GSK had previously not acknowledged any liability and questioned the scientific basis of the claims that Zantac causes cancer. The controversy began in 2019, when a laboratory in Connecticut reported high levels of carcinogens in the active ingredient ranitidine. An analyst report from Morgan Stanley in August 2022 estimated GSK's potential total liability at up to $45 billion, with the company risking up to $27 billion. This led to a massive loss of value of around £30 billion for other pharmaceutical companies that had marketed Zantac.

Alongside the main settlement, GSK also reached a separate settlement with the laboratory Valisure for $70 million on Wednesday. The talks were initiated by a decision from a Delaware court in May, which allowed the plaintiffs to present the science behind the cancer claims. This decision led to an immediate 10 percent drop in GSK shares.

Analysts like Peter Welford from Jefferies view the settlement as an important step to eliminate the distraction from the Zantac lawsuits. Nonetheless, skepticism remains as questions about the sales development of the RSV and Shingrix vaccines persist. In June, a US FDA panel surprisingly recommended restricting the use of the RSV vaccine Arexvy, significantly dampening sales expectations for 2024. Additionally, GSK reported lower sales for its Shingrix vaccine against shingles in the first half of the year.

Despite these challenges, GSK promises that the settlement will not impact its investment plans. The company will report a charge of 1.8 billion pounds in its financial results in the coming quarters but remains financially stable.