(Reuters) – GlaxoSmithKline shares rose 6 percent on Thursday after the British drugmaker agreed to pay up to $2.2 billion to settle lawsuits in the United States alleging that the discontinued heartburn drug Zantac causes cancer.
The agreement, announced on Wednesday, was well below some analysts’ estimates, including JPMorgan’s forecast of $3.5 billion. The settlement resolves 80,000, or 93%, of the cases pending against the company in the United States
Analysts at Jefferies said the settlement of the cases should remove “the majority of the Zantac stock backlog.”
GlaxoSmithKline did not admit any wrongdoing or liability in the settlements, and said the settlements were in the company’s long-term interest to avoid the risks of continued litigation.
The company will also pay $70 million to settle a related whistleblower lawsuit brought by a Connecticut lab.