On Tuesday, Haleon said it had denied a request for costs related to U.S. lawsuits over heartburn drug Zantac, its latest response to the threat that has dogged the company. FTSE 100 consumer healthcare since it was split from GSK in July.
GSK and Pfizer, partners in the joint venture that was spun off to become Haleon, both previously sold Zantac. Haleon is not selling Zantac in the US, but fears it could be liable in lawsuits over the drug’s potential link to cancer have driven the stock price, according to James Edwardes Jones, an analyst at RBC Capital Markets. Its shares fell, according to James Edwardes Jones, an analyst at RBC Capital Markets.
Shares of Haleon have fallen nearly 17% since it was listed, trailing a 3.5% drop in the FTSE 100. Its shares were up 1% in Tuesday morning trading.
The group said it denied claims from GSK and Pfizer “on the basis that the scope of compensation outlined in the joint venture agreement covers only their consumer healthcare businesses as conducted.” when the joint venture was established in 2018″.
“At the time, neither GSK nor Pfizer marketed [over the counter] Zantac in the US or Canada. “
Indemnity is a legal process intended to provide security against possible damages.
Zantac was withdrawn from the US market following an investigation by the Food and Drug Administration into levels of N-nitrosodimethylamine, or NDMA, in the drug. NDMA can cause cancer when consumed in large amounts.
The potential costs associated with Zantac, along with the prospect of Pfizer and GSK disposing of their stakes in Haleon – 32% and 5.4% respectively – “will act as a shortcut,” Edwardes Jones said. for key investors”.
Worries about Zantac cast a shadow over Haleon’s first months of independence after it became the only listed pure consumer healthcare company of significant size. The share price drop has reduced its market capitalization to less than half of the £50bn GSK was offered for sale by Unilever late last year, before it was spun off.
Sanofi and Johnson & Johnson are also preparing to expand their consumer health businesses.
In its first half results, also released on Tuesday, Haleon said the return of colds and flu following the lifting of Covid-19 restrictions boosted sales of drugs like Theraflu, which helps pushed similar net sales growth to 11.6. percent for the six months through June 30.
Sales of respiratory medicine rose 46.7% in the one-year period before Covid-19’s Omicron wave increased rates of mild illness, Haleon said. Painkillers and vitamins are also on sale, with Panadol growing strongly in the “mid-20s”.
That helped push adjusted operating profit up 21.2% to £1.2 billion, as the group maintained full-year guidance for similar net revenue growth of 6 to 8 per cent and gross margin. Adjusted operating profit decreased slightly from last year. year 22.8%.
