Drug maker Teva pays $523 million to New York in opioid settlement
Teva Pharmaceutical Industries Lts. will pay up to $523 million to New York State as part of a nationwide settlement of lawsuits alleging the company fueled the U.S. opioid epidemic.
The New York settlement adds an additional $300 million to Teva’s total opioid payments. Teva is working on a nationwide settlement worth more than $4.2 billion, and New York would already receive cash and medicines as part of that deal.
“You can’t put a price on lives lost, addiction suffered and families torn apart, but with the more than $2 billion we have now delivered to New Yorkers, we can continue to rebuild and recover,” New York Attorney General Letitia James said. York on Thursday, also citing opioid settlements with other companies.
James said the Teva settlement ends the state’s lawsuit against opioid manufacturers and distributors.
CVS Health Corp, Walgreens Boots Alliance and Walmart agreed this week to pay $13.8 billion to resolve thousands of US state and local lawsuits related to opioid pain medications dispensed by their pharmacies.
Teva Chief Executive Kare Schultz said the company will make the payment to New York in 18 years, “which is good for us because it means it’s very manageable in relation to our cash flow and debt situation.” Teva’s net debt has fallen but remains high at $19 billion.
“We’re pretty happy with that result,” Schultz told analysts on the phone after Israel-based Teva reported third-quarter results that beat expectations, initially pushing its Tel Aviv-listed shares down more than 6%. Teva’s New York-listed shares fell 1.5% to $8.63.
In July, after years of negotiations, Teva proposed a $4.25 billion nationwide settlement — mostly cash and partly drugs that will reach $300 million to $400 million in 13 years — to resolve opioid lawsuits. Only the New York deal will pay out in 18 years.
Teva expects to start paying in 2023, but Schultz told Reuters that the opt-in process from states and local authorities has begun and would take a few months.
“We are quite optimistic that we will get a very, very large number of states and subdivisions and that we will put the majority of the opioid disputes behind us,” he said.
Citing a stronger US dollar hitting revenues, the world’s largest generic drug maker lowered its full-year revenue outlook while also reporting lower-than-expected third-quarter earnings.
Teva posted adjusted earnings of 59 cents per share for the quarter, unchanged from a year earlier, but 3 cents per share below analyst expectations, according to data from Refinitiv. Revenue fell 8% to $3.6 billion, below Wall Street’s estimates of $3.83 billion.
Citing “continuing foreign exchange headwinds,” Teva cut its estimated 2022 revenue to between $14.8 billion and $15.4 billion, from a previously forecast $15 billion to $15.6 billion. Last year’s revenue was $15.9 billion.
The 2022 adjusted earnings per share forecast remained unchanged at $2.40 to $2.60.
Teva expects its two branded drugs, Ajovy to treat migraines and its Huntington’s disease drug, Austedo, to achieve combined sales of $1.4 billion this year.
Piper Sandler analyst David Amsellem said he has “significant concerns about the trajectory” of sales and earnings, and remains “bearish” relative to Teva with an “underweight” rating and $8 target.
New York manufacturing drugs