GSK, a major player in the UK pharmaceutical industry, has come to a settlement regarding approximately 80,000 state court lawsuits in the United States related to its well-known medication Zantac, amounting to a potential $2.2 billion.

In a statement released after the London stock market closed, GSK revealed that it had reached an agreement with ten firms, which collectively handle 93 percent of the Zantac product liability claims against the FTSE 100 company.

The firm has faced extensive legal battles in the U.S., its largest market, due to claims that the heartburn treatment resulted in cancer.

Investor apprehensions over potentially significant liabilities surfaced in August 2022, leading to a considerable impact on the company’s stock price.

Following the announcement of the settlements—where GSK has not conceded any liability—there was a notable positive reaction in the trading of its American depositary receipts in New York on Wednesday evening, with shares increasing by 8 percent to $41.

Market observers will closely monitor the shares when trading resumes in London on Thursday.

Additionally, GSK disclosed it has settled a case with Valisure, a laboratory based in Connecticut, agreeing to pay $70 million, again without admitting liability.

Ranitidine, the active ingredient in Zantac, played a crucial role in GSK’s global growth and became a leading prescription medication, with annual sales exceeding $1 billion. This drug works by decreasing acid production in the stomach, making it a popular choice for heartburn relief.

GSK stated: “While the scientific community maintains that there is no consistent evidence suggesting ranitidine increases cancer risk, we believe these settlements serve the long-term interests of the company and its investors by alleviating substantial financial uncertainties and distractions from ongoing litigation.”

For its third-quarter report, due on October 30, GSK anticipates recording a $2.3 billion charge, which includes the settlement costs and covers the remaining 7 percent of ongoing state court product liability cases, although this will be partially mitigated by expected reductions in future legal expenses.

Despite navigating through litigation challenges, GSK remains focused on strengthening investor confidence and advancing its drug development initiatives, assuring that the costs associated with these settlements will be managed through existing financial resources and will not disrupt GSK’s growth strategy or research and development investment plans.