Drugmaker Teva to pay New York $523 million in opioid settlement

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Teva Pharmaceutical Industries Ltd. will pay up to $523 million to New York State as part of a nationwide settlement of lawsuits alleging the company helped fuel the opioid epidemic in the United States.

The settlement with New York adds an additional $300 million to Teva’s total opioid payments. Teva is working to finalize a nationwide settlement valued at more than $4.2 billion, and New York was already expected to receive cash and drugs as part of that settlement.

“You can’t put a price on the lives lost, the addictions suffered, and the families torn apart, but with the more than $2 billion we’ve now delivered to New Yorkers, we can continue to rebuild and recover,” said New York Attorney General Letitia James. Thursday, also referring to opioid settlements with other companies.

James said the Teva settlement ends state litigation against opioid manufacturers and distributors.

CVS Health Corp, Walgreens Boots Alliance and Walmart this week agreed to pay $13.8 billion to resolve thousands of U.S. and local lawsuits related to opioid painkillers dispensed by their pharmacies.

Teva chief executive Kare Schultz said the company will make the payment in New York over 18 years, “which is good for us because it means it’s very manageable relative to our cash flow and our financial situation. ‘indebtedness’. Teva’s net debt has declined but remains high at $19 billion.

“We’re quite pleased with this result,” Schultz told analysts on a call after Israeli firm Teva reported third-quarter results that beat expectations and initially sent its Tel Aviv-listed shares tumbling by more than 6%. New York-listed shares of Teva fell 1.5% to $8.63.

After years of negotiations, Teva in July proposed a nationwide $4.25 billion settlement — mostly cash and part drugs that will amount to $300 million to $400 million over 13 years — to resolve opioid lawsuits. Only the New York agreement pays over 18 years.

Teva plans to start paying in 2023, but Schultz told Reuters the process of getting states and locals on board has begun and will take a few months.

“We’re pretty optimistic that a very, very large number of states and subdivisions will join and we’ll put the majority of opioid-related litigation behind us,” he said.

Citing a stronger U.S. dollar that hurt its revenue, the world’s largest generic drug maker lowered its full-year revenue outlook while announcing third-quarter profit that fell short of expectations.

Teva posted adjusted earnings of 59 cents per share for the quarter, unchanged from a year earlier, but 3 cents per share below analysts’ expectations, according to Refinitiv data. Revenue fell 8% to $3.6 billion, below Wall Street estimates of $3.83 billion.

Citing “continued currency headwinds,” Teva lowered its 2022 revenue estimate to between $14.8 billion and $15.4 billion, from the previously forecast $15 billion to $15.6 billion. Last year’s revenue was $15.9 billion.

The adjusted earnings per share forecast for 2022 remained unchanged between $2.40 and $2.60.

Teva expects its two branded drugs, Ajovy to treat migraines and Huntington’s disease drug Austedo, to reach combined sales of $1.4 billion this year.

Piper Sandler analyst David Amsellem said he has “significant concerns about the trajectory” of revenue and earnings, and remains “bearish” on Teva with an “underweight” rating and a target of 8 dollars.

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