GSK settlement of California bellwether cases removes near-term risk, says BofA

After GSK announced settlement of the Cantlay/Harper Zantac litigation ahead of a trial scheduled to start November 13 and three other California breast cancer bellwether cases in a confidential agreement, BofA analyst Graham Parry said the the settlement is a near-term positive given it pushes out the next key litigation date to January and takes imminent risk of going to trial in California off the table. The firm, which thinks settling all California and other state cases could result in a mid-hundreds of millions settlement, views the key risk being whether GSK needs to settle Delaware cases, though “today’s news lessens the latter risk.” The firm reiterates an Underperform rating on GSK given what it calls “weak” growth and pipeline and high loss of exclusivity exposure.