GSK settling first Zantac bellwether case removes near-term risk, says BofA

After GSK announced settlement of the first bellwether trial in the Zantac litigation in California for an undisclosed amount, BofA says the news removes a near-term headline risk given the trial was due to begin on July 24. Three more bellwethers in the California litigation are proceeding, albeit slowly, but the firm reminds investors that the bulk of the remainder of the Zantac litigation is in Delaware, where there are 77,000 cases. Overall, BofA continues to see Zantac risk as “low in absolute terms” and sees GSK’s strategy of avoiding large public damages against them as “sensible,” but the firm reiterates its Underperform rating given BofA sees more pipeline rebuild needed and says Zantac remains a sentiment overhang until resolved.