AstraZeneca (AZN) Settles Heartburn Drugs Lawsuits for $425M
AstraZeneca AZN announced that it has entered into settlement agreements for pending litigations related to its proton pump inhibitors (PPIs), Nexium and Prilosec, for $425 million. Higher-dose versions of Nexium and Prilosec are approved for prescription use to treat patients with acid-related symptoms, while lower-dose strengths are available over the counter to treat heartburn.
Various lawsuits were filed in federal and state courts, claiming that treatment with the British pharma giant’s heartburn drugs Nexium and Prilosec have caused the plaintiffs various injuries, mostly kidney injuries. The lawsuits claim AstraZeneca should have warned the patients about the side effects of the PPI drugs.
In August 2017, the pending federal court cases were consolidated in a multidistrict litigation (MDL) proceeding in a district court of New Jersey. In addition to the MDL cases, there were cases filed in several other U.S. state courts.
A bellwether trial was scheduled for this month while subsequent bellwether trials were scheduled for November 2023 and January 2024. However, the latest settlement resolves the claims pending in the MDL cases in New Jersey as well as in courts in Delaware. Only a single case remains pending in a district court of Louisiana, for which a trial is scheduled for Apr 15, 2024.
Year to date (YTD), the stock has declined 2.3% against the industry’s 4.2% rise.
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However, AstraZeneca believes it has not done anything wrong and the settlement has been made only to avoid continued costly litigations.
Another heartburn drug, Zantac, made by GSK GSK has faced allegations that it causes cancer. Several personal injury cases were filed in federal and state courts, alleging that Zantac (ranitidine) medicines cause cancer. GSK believes there is no consistent or reliable evidence to show that ranitidine increases the risk of any cancer and hence it will rigorously defend itself against brought at the State level.
Zacks Rank & Stocks to Consider
Currently, AstraZeneca has a Zacks Rank #3 (Hold).
AstraZeneca PLC Price and Consensus
AstraZeneca PLC price-consensus-chart | AstraZeneca PLC Quote
Some better-ranked drug/biotech companies worth considering are Alpine Immune Sciences ALPN and Aurinia Pharmaceuticals AUPH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, the consensus estimate for Alpine Immune Sciences’ 2023 loss has narrowed from $1.43 per share to $1.18 per share, while that for 2024 has narrowed from $1.73 per share to $1.47 per share. Year to date, shares of Alpine Immune Sciences have rallied 57.5%.
ALPN’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average negative surprise of 79.65%.
In the past 60 days, the consensus mark for Aurinia Pharmaceuticals’ 2023 loss has narrowed from 66 cents per share to 58 cents per share, while that for 2024 has narrowed from 38 cents to 27 cents. Year to date, shares of Aurinia Pharmaceuticals have surged 68.7%.
Earnings of Aurinia Pharmaceuticals beat estimates in all the last four quarters, delivering an earnings surprise of 45.61% on average.
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