Popping pills

Gastric distress at GlaxoSmithKline

Good morning, analysis architects. This is your Stock Market Rundown for March 8th, 2024. Thanks for joining me. Let’s dig in:

TODAY’S TOP STORY: PHARMA FIASCO

How could a drug that was the best-selling pharmaceutical on earth end up getting pulled from the market and causing billions in lawsuits? It’s a sordid tale of scientific controversy… and stomach acid.

Heartburn drug Zantac was developed by drug company Glaxo and patented in 1978. For the launch, the drugmaker leveraged the classic pharma playbook: push for public awareness of the ailment, to swell the addressable market. 

Glaxo ran TV commercials encouraging consumers to “Chug that java! Down that dog!”—egging them on to pig out, then pop a pill to kill the burn. Zantac even sponsored chili cookoffs

Soon, the drug was a blockbuster, topping a billion in annual revenue, and eventually making up half of Glaxo’s sales. After the patent expired in 1997, other companies manufactured their own versions of the drug.

But even as the billions rolled in, some scientists had doubts about the drug’s safety. In 2019, it was found to be tainted with a probable carcinogen. Next thing you knew, Zantac was more cancelled than R. Kelly, and by 2020 the FDA forced it off the market. 

Glaxo has been entangled in lawsuits ever since, and currently faces a staggering 79,000 cases related to Zantac. (For the record, Glaxo—now renamed GlaxoSmithKline—denies that the drug causes cancer.) 

The whole mess is a cautionary tale of scientific ambiguity colliding with hyper-aggressive drug company marketing. When billions of dollars are involved, the truth is often the first victim.

SO WHAT ELSE IS GOING ON?
  • Now you can blame Clippy when you miss your numbers. Microsoft just launched an AI-based product for finance teams, which does tasks like review risks and produce reports, so humans can focus on… well, probably just watching the AI do their jobs.

  • Layoffs watch: Online dating website Bumble went from matchmaker to heartbreaker as it cut 350 employees amid struggles with weak user spending. Maybe users swiped through their matches and decided to just meet people the old-fashioned way: by leaving the house.

  • US pending home sales fell in January as sky-high mortgage rates had anxious would-be buyers looking up the definition of “amortization” on Urban Dictionary.

  • Automotive parts retailer AutoZone beat estimates as more consumers tried their hand at fixing their cars themselves. Meanwhile, I give myself a high-five for refilling my own windshield washer fluid.

That’s it for today and for the week, my friends. Have yourselves a fabulous weekend, and let’s reconvene first thing Monday morning. Yours in capitalism, The Axe

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