(Bloomberg) -- GSK Plc and Sanofi rose for the first time this week following a selloff triggered by investors waking up to the risk that US juries could hold the drug companies accountable for cancers allegedly caused by contaminants in a once-popular antacid.
Shares in Britain’s GSK gained as much as 5% on Friday while the French group Sanofi rose 3.2% after both pharmaceutical giants said they would vigorously defend any claims and disputed the idea that an ingredient in the drug Zantac caused cancer.
The knee-jerk reaction to the Zantac litigation is “somewhat overdone,” said Deutsche Bank analyst Emmanuel Papadakis as he upgraded Sanofi to hold from sell.
Fears that US juries could award large payouts in hundreds of trials that are under way in the US led to one of the biggest selloffs in health-care stocks in decades, with investors pulling some $40 billion from Sanofi, GSK and its consumer health spinoff Haleon in the past few days.
The recalled heartburn drug Zantac is the latest to face a wave of US product-liability lawsuits that could expose companies to billions of dollars in damages from jury trials. Drugmakers such as Pfizer Inc. also are potentially in the litigation cross-hairs, with one analyst’s estimate putting the exposure for all of the companies at as much as $45 billion.