Teva Braces For Opioid Fines With $646 Million Provision
(Bloomberg) -- Teva Pharmaceutical Industries Ltd. is preparing for a potential reckoning with the U.S. epidemic of opioid addiction.
The drugmaker's shares tumbled after it set aside $646 million to help pay legal expenses related to its alleged role in the abuse of the addictive painkillers linked to tens of thousands American deaths annually.
U.S. authorities are seeking steep damages from Teva and a handful of other prominent pharmaceutical companies -- three drug distributors offered $10 billion to settle a range of state lawsuits against them, people familiar with the matter told Bloomberg earlier this week.
The provision is the biggest step Teva has taken in this legal fight, one that could stall the company's turnaround plans or sink the heavily indebted firm entirely. Teva, which manufactures opioids, agreed in May to pay $85 million to settle claims made by the state of Oklahoma.
“We deny liability and will continue to vigorously defend ourselves,” Teva said Wednesday in an earnings presentation. “We maintain our defenses while also exploring responsible and comprehensive alternatives.”
Teva shares plunged as much as 10.2% in New York, bringing the decline this year to 58%.
The provision is at the low end of the range of possible settlements, the company said. The funds may also be used to cover expenses related to an investigation of alleged price-fixing in the U.S. generic drug industry, Chief Financial Officer Michael McClellan said on a conference call.
The looming threat of multibillion-dollar fines has overshadowed efforts to revive profit, with shares dropping to 20-year lows. With Kare Schultz as chief executive officer, Teva has been fending off financial collapse for more than two years.
Schultz lost a key partner in improving Teva's debt management as McClellan said he'll step down, citing personal reasons. The CFO was instrumental in lengthening the time the company had to pay back its loans, which are currently worth more than three times Teva's market capitalization. Teva has initiated a search for a replacement.
--With assistance from Katie Linsell.
To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net
To contact the editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net
©2019 Bloomberg L.P.
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
