Why did Teva ink an $85M deal to sidestep the Oklahoma opioid trial?

fiercepharma | May 28, 2019

Why did Teva ink an $85M deal to sidestep the Oklahoma opioid trial?
Less than 48 hours before the first major opioid trial began, Teva struck an $85 million deal with Oklahoma officials, about one-third what painkiller giant Purdue Pharma paid to settle similar claims. That leaves Johnson & Johnson as the only remaining drugmaker facing trial Tuesday, while Teva can breathe a sigh of relief at least until a much bigger legal fight plays out this fall. Teva's $85 million settlement resolves claims that its painkillers and their marketing fed an opioid addiction crisis in Oklahoma. Together with the $270 million Purdue agreed in March, that's $355 million. Oklahoma had asked for $10 billion in damages. Teva didn't admit any wrongdoing with its settlement.The state's trial is the first among a raft of lawsuits claiming opioid makers aggressively promoted their meds, misled patients and doctors about their safety, and cost governments billions of dollars in the process. With more than 1,000 lawsuits queued up after it, analysts are watching for hints about what drugmakers might eventually pay to resolve the legal battle. The company chose to settle because it thought there "was a bad set-up in Oklahoma, a traditionally plaintiff-friendly jurisdiction," Bernstein analyst Ronny Gal wrote in a note to clients on Tuesday."Given the national media attention, Teva wanted to avoid this being their first verdict in opioid litigation," Gal added. "They believe odds will be better in other, more balanced jurisdictions."Teva's weekend news may come as a surprise to some industry watchers, given CEO Kåre Schultz’s comments on a recent conference call. Earlier this month, Schultz said plaintiff’s lawyers are focused on where they can get money in the opioid litigation. But Teva has a lot of debt and not a lot of money, so those lawyers will have “to find somebody else if they want big settlements," he said."It won’t be with us," Schultz added.And compared with Purdue's painkiller business, Teva's isn't all that significant, as Wells Fargo analyst David Maris pointed out in an investor note. "We were surprised that Teva's settlement is so large relative to the Purdue settlement, Maris wrote, adding, "Purdue marketed OxyContin and is considered to be at the center of the opioid crisis, while Teva's involvement was minor in comparison."

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