Zantac heartburn pills are seen in this picture illustration
Zantac heartburn pills are seen in this picture illustration taken October 1, 2019.

Shares in GSK, Sanofi, Haleon and Pfizer began to recover on Friday after the companies said that nothing material had changed regarding U.S. litigation focused on heartburn drug Zantac.

The companies' share prices had fallen sharply this week on investor concern about the litigation over potential cancer-causing impurities that prompted the drug's withdrawal from markets in 2019 and 2020.

More than 2,000 Zantac-related legal cases have been filed in the United States, analysts say, with the first trial beginning this month.

The prospect of impending Zantac litigation is not new. Among other disclosures, recently listed Haleon had highlighted the risk of such lawsuits in its prospectus.

GSK, Sanofi, Pfizer and Haleon have lost a combined $39 billion from their market value over the past week in the absence of any other particular catalyst, Barclays analysts wrote in a note on Friday.

Since the start of the week GSK's shares had fallen 16% by Thursday's close while Sanofi lost 13.1%, Haleon 13.7% and Pfizer 2%.

Zantac, originally marketed by a forerunner of GSK, has been sold by several companies since the loss of patent exclusivity in the late 1990s, including Pfizer, Boehringer Ingelheim and Sanofi.

Haleon, spun out as an independent company last month, comprises consumer health assets once owned by GSK and Pfizer.

Uncertainty over the outcome of litigation has sparked fears of a worse-case scenario where costs run into billions of dollars, as happened in cases involving Merck & Co's painkiller Vioxx and Bayer's glyphosate-based weedkiller.

Pharma investors' most recent memory of legal risk is the experience with Bayer, Barclays analysts said, adding that the company's shares have underperformed the European healthcare sector by about 80% since the first so-called bellwether case went against Bayer in 2018.

"As such, the seeming market reaction of 'sell first; ask questions later' makes some sense," the analysts wrote.

On Friday morning GSK shares rose 3.7%, Sanofi gained 1% and Haleon was up 1.7%. Pfizer, meanwhile, edged 0.4% higher in U.S. pre-market trading.