Sanofi has lost about 20% in just two days because of worries about lawsuits. Deutsche Bank thinks that upcoming trials will be negative in the short term.
Since Tuesday night, the market values of Sanofi, GSK Plc, and Haleon Plc have dropped by a total of $40 billion as worries about lawsuits
over the recalled heartburn drug Zantac have grown. On Thursday, the price of Sanofi fell as much as 13%, bringing its two-day drop to 20%, the biggest drop ever in that timeframe.
GSK fell as much as 12% in London, and Haleon, which was just spun off from GSK, fell 13%. Before they stopped going down,
GSK shares had their worst one-day drop since February 1998. GSK wouldn't say anything about how the stock moved or about the lawsuits that are still going on about Zantac.
On the other hand, Haleon said that it is not involved in the lawsuits and that it has never sold the drug in the US, either as Haleon or as GSK Consumer Healthcare.
When asked for a comment, Sanofi didn't answer right away. Zantac was once a popular antacid, but now there are a lot of lawsuits in the US claiming that it causes cancer.
In the lawsuits, generic drug companies like Sanofi, GSK, and Boehringer Ingelheim GmbH, among others, are accused of not giving users enough information
about the health risks of their over-the-counter products. Deutsche Bank analyst Emmanuel Papadakis said on Thursday that a court case in Illinois on August 22 and
some important court trials in early 2023 are likely to hurt GSK and Sanofi shares in the short term. Analysts at Morgan Stanley say that, based on how similar lawsuits have been settled in the past,
the damages could reach between $10.5 billion and $45 billion. "At this point, there is a lot of uncertainty about what the total cost of the Zantac lawsuit might be," they wrote.
In 2019, Zantac was taken off the market because the US Food and Drug Administration said it seems to make too much of a chemical that causes cancer when heated for as little as five days.
Analyst Laura Sutcliffe of UBS Group AG said that some investors are staying away from Sanofi until they know more. She changed her rating from "buy" to "neutral"
because she thought the lawsuit at the beginning of 2023 could be a "cloud" over the stock.