The company logo for Haleon and the trading info is displayed on a screen on the floor of the NYSE in New York
The company logo for Haleon and the trading info is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 20, 2022.

Shares in GSK, Sanofi and Haleon fell sharply on Thursday, following declines earlier this week, amid growing concerns about U.S. litigation over a heartburn drug that was pulled from the market in 2020 for containing a probable carcinogen.

By early afternoon, GSK shares had tumbled 13.8% from their closing price on Friday, Sanofi's stock was down 18.8% in that time and Haleon's had fallen 15.9%.

After alerting the public to the presence of a probable carcinogen in heartburn drug Zantac in 2019, the following year the U.S. health regulator requested makers of all versions of the treatment to withdraw their products from the market.

More than 2,000 legal cases related to the medicine have now been filed in the United States, according to Credit Suisse analysts, and the first trial begins later this month.

"Investor feedback has been absolutely uniform that the stock selloff is in relation to concerns over the size of a potential settlement between the players," Barclays analyst Emily Field told Reuters via email.

Shares in Haleon - GSK's recently spun off consumer health unit - fell as much as 12% Thursday, meaning $5 billion had been knocked off its value so far this week. It recovered some of those losses after a spokesperson told Reuters the company was not primarily liable for any claim.

"We have never marketed Zantac in any form in the U.S., as Haleon or as GSK consumer healthcare."

Zantac has been sold by several companies since 1995 and that "may make third parties liable ahead of any Haleon exposure," the spokesperson added.

The drug was marketed by GSK between 1995 and 1998, by Pfizer from 2000 to 2006, by Johnson & Johnson (J&J) from 2006 to 2017, and by Sanofi between 2017 and 2019, Redburn analysts wrote in a note.

GSK, J&J, Pfizer and Sanofi did not immediately respond to requests for comment.

GSK and Pfizer have each served Haleon with notice of potential claims of indemnification - but indemnification has not yet been determined between the parties, the Haleon spokesperson said.

Given Haleon was formed in 2019 and became an independently listed business only last month, the company "is not primarily liable for any claim," the spokesperson added.

 A bottle of Zantac heartburn drug is seen in this picture illustration
A bottle of Zantac heartburn drug is seen in this picture illustration taken October 1, 2019.