Johnson & Johnson (JNJ) announced on Friday that it has agreed to settle the opioid epidemic case with New Mexico by paying $44 million. Shares of the global drug maker closed at $167.84 on January 14.
New Mexico had originally ruled out of participating in a nationwide settlement resolving several similar cases.
JNJ said the $44 million was consistent with the terms of a proposal for J&J as well as other drug makers McKesson Corp. (MCK), AmerisourceBergen Corp. (ABC), and Cardinal Health Inc. (CAH). These drug manufacturers have collectively decided to pay up to $26 billion to resolve the cases across the U.S.
Instead of paying out over several years, JNJ will pay out its share of the nationwide settlement in 2022 itself, provided, all of the state’s local governments sign the case by May 31, 2022.
JNJ has denied any wrongdoing in the case and stated they had appropriately marketed the pain killer drug. The opioid abuse epidemic has resulted in thousands of deaths in the United States and more than 3,300 cases are pending across state and local governments.
The Attorney General of New Mexico, Hector Balderas, said, “Opioids have destroyed families in New Mexico, and local communities and addiction professionals still need vital funding to save lives and fight this ongoing tragic epidemic.”
Wall Street View
The Wall Street community has awarded JNJ stock a Strong Buy consensus rating based on 6 Buys and 1 Hold. The average Johnson & Johnson price target of $189.83 implies 13.1% upside potential to current levels. Shares have gained 5.7% over the past year.
Hedge Fund Activity
According to TipRanks’ Hedge Fund Trading Activity tool, confidence in JNJ, one of the best healthcare stocks, is currently Very Positive. 32 hedge funds have increased their cumulative holdings of the JNJ stock by 785,200 shares in the last quarter.
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