(Reuters) -Shares of GSK rose 6% on Thursday after the British drugmaker agreed to pay up to $2.2 billion to settle lawsuits in the United States that claimed its discontinued heartburn drug Zantac caused cancer.
The agreement, announced on Wednesday, was far lower than some analyst estimates, including JP Morgan’s projection of $3.5 billion. The settlement resolves 80,000 or 93% of the pending cases against the company in the U.S.
Analysts at Jefferies said the settlement of the cases should remove “the majority of Zantac overhang on the stock”.
GSK admitted no wrongdoing or liability in the settlements, and said the settlements were in the best long-term interest of the company to avoid the risk of continuing litigation.
The company will also pay $70 million to settle a related whistleblower lawsuit filed by a Connecticut laboratory.
(Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala)
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