GSK plc.

On August 10, 2022, Deutsche Bank reported that it seemed “very possible” that GSK “will incur the risk of some degree of shared liability, with the only real questions being what the magnitude of liability may be” regarding its drug, Zantac, and an interaction with many foods to create the carcinogen, NDMA. While the Company repeatedly claimed that scientific research did not support a correlation between Zantac and cancer, the Deutsche Bank report stated that the total liability could be between $5 billion and $10 billion.

On this news, GSK’s stock price fell $4.30, or 10.7%, over two consecutive trading days to close at $35.75 per share on August 11, 2022, thereby injuring investors. 

Then, on August 15, 2022, GSK disclosed that its liability exposure was between $1 billion and $10 billion and analysts predicted “total exposure low billions to multiple 10s.” On this news, GSK’s stock price fell $1.08, or 3%, to close at $34.95 per share on August 15, 2022, thereby injuring investors further.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) GSK was fully aware of the source of NDMA and had been for nearly 40 years before withdrawing Zantac from the market; (2) while Defendants asserted that “data published prior to 2019 claims” failed to establish a link between Zantac and cancer, they failed to disclose that GSK possessed unpublished data – the Tanner Report – that did exactly that; (3) the representations about Defendants’ ability to “quantify or reliably estimate the liability” deceived investors, who did not know that GSK had for decades concealed an internal study that implicated the Company’s liability to Zantac users; and (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.