Citigroup put pharmaceuticals company GlaxoSmithKline on “positive catalyst watch” on Friday as it pointed to legal developments related to the company’s now-discontinued Zantac heartburn drug.
The bank pointed to legal developments that it said could “materially reduce” GSK’ exposure versus the $17bn being discounted.
“We note a tentative ruling by Judge Rosenberg who is presiding over the multidistrict litigation could leave up to 70,000 US Zantac plaintiffs (that are being forced to exit the MDL) with insufficient time to find legal representation to file in a state court before the statute of limitations prevents them from prosecuting their claim,” Citi said in a note.
“If this plays out, the eventual plaintiff pool could be materially lower than the market fears.
“Any likely settlement much closer to $10bn versus the combined $50bn of market cap that has been wiped off for the various defendants.”
