Haleon rejects GSK and Pfizer’s request for Zantac lawsuits costs

Haleon has rejected requests from former parent company GSK and US pharmaceutical giant Pfizer to cover costs related to a series of lawsuits over the heartburn drug Zantac.

The announcement came as the company posted a double-digit profit increase in its first results as an independent company.

The consumer health group, which owns brands such as Sensodyne toothpaste and Panadol painkillers and was split from GSK in July, said it was not a party to claims stemming from the court battle over Zantac, which was pulled out of fear in 2019. it contained a chemical that caused cancer.

The fallout from the lawsuits, which amount to more than 2,000, threatens to engulf several major drug makers, including GSK, with the company’s shares plummeting in recent months amid fears of hefty compensation payments, which some investors fear could run into the billions of pounds. can walk.

Haleon’s shares have also taken a beating over concerns it could be hit by contagion and demands to help bear the financial burden of the legal spat.

But the company’s decision to reject its requests for assistance in covering the costs gave a boost to the… shareswhich rose 2.33 percent or 6.05p to 265.45p.

Haleon boss Brian McNamara said the company had never agreed to accept some of the obligations arising from the Zantac lawsuits.

Steve Clayton, fund manager at Hargreaves Lansdown, added that Haleon itself had “never brought the drug to market” and as a result did not expect the company to incur “significant financial costs” as a result of the lawsuit.

The backlash against potential claims came as Haleon reported its first set of results since GSK’s split.

For the six months to the end of June, the group posted profits of £900 million, up 22 percent year on year, while sales climbed 13 percent to £5.2 billion.

The numbers were supported by a surge in sales of the group’s cold and flu remedies, which jumped nearly 47 percent as the lifting of Covid-19 restrictions and the spread of the Omicron variant led to a return of milder conditions. of the airways.

Haleon also reiterated its forecasts for full-year revenue growth of 6-8 percent.

But Victoria Scholar, of Interactive Investor, warned that the “biggest risk” to Haleon going forward would be if consumers started trading on cheaper rivals.