By Brendan Pierson and Natalie Grover

(Reuters) – The plaintiff in the first lawsuit over the heartburn drug Zantac scheduled to go to trial has agreed to drop his case, according to his attorney and drugmakers named as defendants.

Tuesday’s news came days after shares of GlaxoSmithKline Plc, Sanofi SA, Pfizer Inc and Haleon Plc were hit by mounting investor concern about thousands of lawsuits claiming the drug, which U.S. regulators pulled from the market in 2020, causes cancer.

The first trial in one of those lawsuits had been scheduled to begin on Monday in Illinois state court. The plaintiff, Joseph Bayer, alleged he developed esophageal cancer from taking over-the-counter Zantac.

Alexandra Walsh, an attorney for Bayer, said her client could not proceed for “personal health reasons” but had the right to refile his case within a year.

Zantac, originally marketed by a forerunner of GSK, has been sold by several companies at different times, including Pfizer, Boehringer Ingelheim and Sanofi as well as a plethora of generic drugmakers.

Haleon, spun out as an independent company last month, comprises consumer health assets once owned by GSK and Pfizer.

GSK and Boehringer Ingelheim said they had not paid anything in exchange for the voluntary dismissal of the Bayer case.

This result reflects what Pfizer has always stated: this litigation is without merit, a company spokesperson said.

Haleon and Sanofi were not named as defendants in the case.

Separately on Tuesday, Bloomberg reported a handful of generic companies including Teva, Perrigo, Sun Pharmaceutical Industries and Dr. Reddy’s Laboratories agreed to settle with Bayer for a total of more than $500,000 before the case was set to go to trial, citing people familiar with the deal.

A Perrigo spokesperson told Reuters the company had been dismissed from the Bayer case, per public records. “We are not commenting on the article, which is riddled with inaccuracies,” the person said.

Teva Pharmaceuticals said it had been dismissed from a vast majority of claims in the multi-district litigation, but settled in a case that was not part of the litigation at a “nominal value” far less than what it would have cost in trial.

Sun Pharma and Dr Reddy’s did not immediately respond to requests for comment.

Concerns around Zantac – known chemically as ranitidine – containing potential cancer-causing impurities started to emerge in 2018, well after generic versions of the medicine had been launched.

FINANCIAL IMPACT

More than 2,000 lawsuits are consolidated in federal court in West Palm Beach, Florida, where a hearing on what expert evidence will be allowed in future trials is scheduled for Sept. 20.

The first federal court trials are expected some time next year, though a highly favorable ruling for the companies on evidence could effectively end the litigation before then.

There is considerable uncertainty surrounding the potential total financial impact of the Zantac litigation, Morgan Stanley analysts wrote in a note on Monday.

“There is also a scenario of zero liability if the defendants win the early cases,” they wrote.

At the heart of the claims is an impurity, called N-nitrosodimethylamine (NDMA), which is considered a probable carcinogen.

U.S. regulators in 2020 determined the presence of the impurity in some ranitidine products increases over time and when stored at higher than room temperatures – and could therefore result in exposure to unacceptable levels of NDMA.

Meanwhile, Zantac makers strongly contest the once widely used drug’s causal link to cancer, suggesting that NDMA levels in the medicine are close to what was found in common foods like grilled and smoked meats.

(Reporting by Brendan Pierson in New York, Natalie Grover in London and Bhanvi Satija in Bengaluru; Additional reporting by Leroy Leo and Manas Mishra in Bengaluru; Editing by Marguerita Choy, Edmund Blair and Mark Potter)

---