Gsk Share Discussion Threads

[alphorn] 14/8/2022 12:19

Berny - some good thoughts. My input to your post fwiw:
- Shringrix has long IPP which is a positive.
- Haleon has regular cash flow to finance that debt so reasonable financial engineering to allocate it to Haleon.
- GSK will likely start borrowing again to buy in new leads which is almost inevitable.
- It is not yet known how (new) GSK will repatriate the large US profit stream to pay its dividends. Will this be borrowed? Will have to wait for the first financials.

(My positions were closed prior de-merger. Expect to open new bullish positions in the next few weeks).

[careful] 14/8/2022 12:02

Serious investors are long term investors.
The wealth generated by GSK over the next 5,10,20 years is what matters.

[berny3] 14/8/2022 12:00

By luck I sold out of my holding pre split and have through three tranches reinvested the funds over the end of last week. i do not think I can predict what will happen in the short term, how it will open Monday etc.., but I do think their is value over the longer term. I have laid out some of the things I have gathered which may or may not assist to the group discussion.

Dividend due in October is 1.12%
Dividend guided for 6 mnths 2022 is 1.51%
Dividend guided for 12mnths 2023 is 3.1%

An interesting development is the approval of Shingrix in China. GSK is the only provider of a shingles vaccine in China and the potential for growth is huge imo. I copy below a section

"According to this market research, since the Shingles Vaccine entered the Chinese market in 2020, its annual sales value reached CNY19 million(US$2.85 million), and its annual sales volume reached nearly 12,000 doses. Therefore, the development prospects are quite good.

According to the analysis, from 2022 to 2031, as Shingles Vaccine market expands, its sales will continue to grow. Compared with Merck's Zostavax, SHINGRIX has better preventive effects and faster replacement velocity. Therefore, as the market share of Shingles Vaccine will gradually increase, and sales and sales volume will also increase."

Glaxo has a market cap of around £58bln. It has had a significant balance sheet strengthening by taking on the £10bln cash from Haleon.

Reviewing the data available on Zantac, this is an extremely complex case and it is worth looking at the legal process. Comparing it to Bayer and Glyphosate, BP or Tobacco is comparing apples with bananas. It is very different imo.

Firstly what is the claim

"A Zantac lawsuit is a legal claim filed by people who took Zantac and ranitidine contaminated with NDMA and later developed cancer. People filing Zantac lawsuits are seeking compensation from the drug's manufacturers for bladder, stomach, esophageal, liver and pancreatic cancer potentially caused by NDMA exposure."

Two areas of law Actus reus (Guilty act) and Mens Rea (Guilty mind)

What is the guilty act "Zantac causes cancer"
What is the guilty mind the sellers/distributors should have known "Zantac causes cancer"

Zantac causes cancer is based around the claim Zantac increases the NDMA exposure to a level that causes cancer in its own right. The issue here is NDMA is everywhere. I have added a random google search link discussing NDMA levels and the department of health of Minnesota.



This discusses the level of NDMA in drinking water caused by disinfectant. It notes "NDMA can also be found in many processed foods and beverages such as whiskey, beer, cured meats, bacon, and cheeses. Levels of NDMA in these foods are typically much higher than levels of NDMA found in treated drinking water."

As America alone has very high processed foods. There have been many studies on food, its preparation and the rise of NDMA intake and cancer.

this is one article but there are several available.



Due to peoples intake of NDMA being heightened by treated drinking water, smoking, poor diet or even high processed food diet, high fruit diet where there is a lot of nitrates in the food due to production methods, alcohol consumption. I think to discover a definitive direct link that Zantac intake causes is a high bar to achieve legally.

Secondly to then take that and apply that companies should have known and had a "guilty mind" in distribution and selling again is a very high bar.

I think this is a great area of discussion and would be interested in others opinions.

[hamid1970] 14/8/2022 11:34

Back through 15 easy, next week. Storm in a teacup

[careful] 14/8/2022 11:07

Perfect market theory...it is always in the current price.
There is no such thing as an undervalued or overvalued share.
We all have the same information...collective wisdom/stupidity.

[netcurtains] 14/8/2022 10:49

All we know for sure, is that the US has all the details and they were the last ones to close ... At that point GSK was up...
So, without knowing anything else, one must assume, 55:45% that GSK is heading up (eg the US is nearly always ahead of the curve, not behind the curve)

[pierre oreilly] 14/8/2022 10:42

The pound shop do crystal balls net.

Or become a chartist and, in spite of all the evidence to the contrary, the charts tell you the future price. It's why all traders are billionaires and, as we see on advfn daily, they all make correct calls all the time.

[netcurtains] 14/8/2022 10:27

All this is by the by.
What I would like to know is how much do we think it will rise tomorrow morning.

[pierre oreilly] 14/8/2022 10:17

The way i see it.

Litigation is always on-going with big pharma. Whe big money wants to make a quick few hundreds of mill, they sell (by one of several means, either selling, shorting writing options, cfding) on a very large scale at little risk of loss (if they are covered, as they likely are). They tell their mates in other institutions, who do the same.

Then they put out sell notes, phone their press mates and spread doom and gloom at quiet times. It matters not one jot if a court case has been ongoing for several years, they'll put out stories as if it's something new and unusual.

A few days/weeks later they'll all reverse, and some time later put out buyish notes, saying things aren't as bad as they first thought.

Such actions break chinese walls - as if the city bunch are bothered about that, knowing prosecutions are as rare as hens' teeth

Kid punters who try to follow will be too late, the pros are one step ahead.

Matters not one hot what pis do, it's all down to what the big boys do. While that is unknown, you can have a pretty good guess what happens next after a big drop on fear.

The risk of gsk paying out several billion in tens of years time is miniscule relative to the risk of punters shorting at the moment, in my view. but each to their own.

[cumnor] 14/8/2022 09:59

Damage is done and arguments on both sides (which clearly favour Glaxo) but that is irrelevant, given the small risk of GSK having to pay out the equivalent of it's mrkt cap if it loses, or a portion to settle-this will be shunned by serious investors and shorted by hedgies on every rise. While this seems unfair to GSK the US legal system is unpredictable and extremely costly-esp with class action juries in the mix and the costs of having to defend itself in several countries it is hard to put a price on it. Maybe 8-10 pounds until the dust settles. Too many other high yielders around seeking money.

[careful] 14/8/2022 09:27

Free market capitalism and democracy is being crushed by greed, corruption, protectionism and a shambolic legal system.

The democratic electoral system, legal systems and markets of leading so called 'free' counties are broken.
There will be a shift to the left again, socialism will emerge and we shall all be worse off.

Capitalism has had a good run, also democracy, but it has been corrupted.

[halfpenny] 14/8/2022 09:24

GSK Dead Cat Bounce - so now reality kicks in. The Risk is now very high until the court case which will probably continue as lawyers get paid either way from the free publicity they have. I will wait as these claims tend to continue for a while. Just like BP that cost Billions!!! How much lower next week and beyond some charts indicate 800 support or lower…!!!

[netcurtains] 14/8/2022 08:14

We have the USA graph (where all the action is) and its been going up.
What we dont know is for how long and how high.

[eurofox] 14/8/2022 08:10

You must be joking

[netcurtains] 14/8/2022 07:50

Never mind all that bollx, how much are we expecting this to rise on Monday?

[unastubbs] 14/8/2022 07:03

well assuming that you mean that you CAN draw a distinction between the two I would say it's irrelevant - it's the fact the litigation exists and potentially on a multi-country level as well. I won't say any more as I don't own these, I am interested in doing so, but not at this level. Here's the Sunday Times today - a very clear warning at the end. Uncertainty is negative when it comes to shares but can also provide opportunity, we all know that, it's just finding the right price to pay for that...

[unastubbs] 13/8/2022 13:31

That Lex piece from the FT today, litigation like this is a ballache for shareholders, the Bayer case is a very good example - take a look at the share price graph over the last 5 years if you dare. Buying GSK et al is courageous at this time.

GSK/Zantac: the precedents club

For years, doctors said stress caused ulcers and heartburn. Now the treatment of these afflictions is causing anxiety for investors. US litigants blame Zantac for their cancer.

Damages, if awarded, could be as high as $45bn, according to Morgan Stanley. Shares in GSK, Haleon and Sanofi began to recover yesterday after the companies said their legal positions were strong. The two UK groups had lost £10bn and £3.5bn of market value, respectively. Sanofi had fallen €13.4bn.

It is unclear where any liabilities might sit. Rights to the over-thecounter version of Zantac have been transferred repeatedly. Even groups that never marketed the drug in the US could be on the hook. Haleon might be required to indemnify GSK or Pfizer. The UK consumer health business, spun off by GSK last month, says it is less exposed than peers. Even so, Unilever dodged a bullet when GSK rejected its £50bn offer for Haleon in January. GSK has potential exposure to claims regarding prescription Zantac.

Morgan Stanley estimates that GSK could account for 30-60 per cent of any liability. The UK drugmaker says scientific evidence suggests no increased cancer risk from the drug.

Investors should remain wary. They will recall Bayer’s legal battles over glyphosate, the weedkiller acquired during the disastrous takeover of Monsanto in 2016. Bayer pointed to studies suggesting that glyphosate — brand name Roundup — did not cause cancer. But the €10bn wiped off Bayer’s share price four years ago was more than justified. The company agreed to settle what it hoped would be the bulk of claims for more than $10bn in 2020. It has so far set aside $16bn. The Bayer case shows it is easy to draw a line under claims prematurely. Costs also mounted well above expectations at Lloyds for mis-sold insurance and BP after the Deepwater Horizon oil spill. GSK, Haleon and Sanofi must not trumpet the end of Zantac liabilities before they have been neutralised.

[archy147] 13/8/2022 09:31

Lol spyder analysts are a complete and utter waste of space (and that's being generous) so always best ignoring. That is a funny one though!

Like netcurtains, I'm pretty surprised this didn't recover to region of 1600 yesterday. And the fact its still under 1500 is totally bonkers. So, potentially still time to fill your boots, for anyone who hasn't already.

[tuftymatt] 13/8/2022 08:19

Yeah it is and maybe on Monday we can push on into 1500 again.

[netcurtains] 12/8/2022 22:14

Nice to see GSK up at close in the USA.

[lippy4] 12/8/2022 21:46

halfpenny

are you working for the analysts as all you keep saying is doom and gloom and really you are not being very factual..

thats how you work is it not??

[halfpenny] 12/8/2022 20:52

Its all a big Risk with too much uncertainty and more negative news in the weekend newspapers which will result in further falls as inexperienced Fund Managers and Analysts panic. Is this the end of a great British company GSK. Wot a mess caused be USA who will protect Pfizer at all costs.

[cyberian] 12/8/2022 19:16

Bonkers is absolutely the right term, and having met one of the Lex contributors at a small private dinner party I would not put that much credence on a Lex Comment. The individual I met was just one of 3/4 that contribute to the Lex back page..they all try to speculate and zone in on any semi wild comment by a third party to make copy.

ADR's currently equiv. to £14.83 and improving sentiment after the half story surfaced over the last 2 days. The formal comments from the Pharma's named is backed by all the leading regulators /scientists over a number of years.