Haleon denies claims by former parent GSK and Pfizer to help cover costs of lawsuit over heartburn drug Zantac
Haleon has rejected requests from former parent company GSK and US pharmaceutical giant Pfizer to help defray costs related to a series of lawsuits over heartburn drug Zantac.
The announcement came as the company posted a double-digit rise in profits in its first results as an independent business.
The consumer healthcare group, which owns brands such as Sensodyne toothpaste and Panadol painkillers and spun off from GSK in July, said it was not party to any claims arising from the legal battle against Zantac , which was pulled from shelves in 2019 amid fears. it contained a chemical that caused cancer.
Haleon, which owns Sensodyne toothpaste and Panadol painkillers and spun off from GSK in July, said it was not party to any claims arising from the legal battle against Zantac.
The fallout from the lawsuits, which number more than 2,000, threatens to engulf several major drugmakers, including GSK, as the company’s shares have fallen sharply in recent months amid fears of steep compensation, which some say investors, could reach billions of pounds.
Haleon’s shares also took a hit on fears it could be hit by the contagion and demands to help shoulder the financial burden of the legal wrangle.
But the company’s decision to reject requests for cost relief assistance gave shares a boost, which jumped 2.33%, or 6.05p, to 265.45p.
Haleon boss Brian McNamara said the company never agreed to take part in the lawsuits against Zantac.
Steve Clayton, fund manager at Hargreaves Lansdown, added that Haleon itself had “never commercialized” the drug and therefore did not expect the company to incur “significant financial costs” from the fact of the legal battle.
Its denial against potential claims came as Haleon released its first set of results since its split from GSK.
For the six months to the end of June, the group recorded a profit of £900million, up 22% year on year, while sales soared 13% to £5.2billion.
The figures were supported by an increase in sales of the group’s cold and flu remedies, which jumped nearly 47% as the lifting of Covid-19 restrictions and the spread of the Omicron variant led to a comeback. milder respiratory illnesses.
Haleon also reiterated its forecast for full-year revenue growth of 6-8%.
But Victoria Scholar, of Interactive Investor, warned that the “biggest risk” for Haleon going forward is that consumers start to turn to cheaper rivals.