New York jurors have held Teva Pharmaceuticals, a U.S. affiliate of Israel-based drugmaker Teva Pharmaceutical Industries (NYSE: TEVA) liable for fueling opioid addiction in New York State and creating a public nuisance.
New York Attorney General Letitia James said, “Today, we took a significant step in righting the wrongs this country has collectively experienced over the last two decades.”
The case filed by the state and two Long Island counties underwent an almost six-month New York state court trial before the final verdict was declared. Notably, the verdict does not include damages, which are likely to be finalized later.
Teva strongly disagreed with the verdict and will make a swift appeal, as well as continue to pursue a mistrial.
The company said, “In NY, the plaintiffs presented no evidence of medically unnecessary prescriptions, suspicious or diverted orders, no evidence of oversupply by the defendants – or any indication of what volumes were appropriate – and no causal relationship between Teva’s conduct including its marketing and any harm to the public in the state.
“Teva continues to focus on increasing access to essential medicines to patients, including opioid medications for approved indications,” the company added, and believes a national settlement of opioid issues will be in the best interest of patients.
New York and the counties’ accusations included misleading marketing practices by Teva, and increased off-label use of the drug. Additionally, these practices focused on cancer pain drugs Actiq and Fentora, and generic opioids sold by Teva. Notably, these cancer drugs were made by Cephalon, a company purchased by Teva in 2011.
Several opioid producers and distributors were accused in a New York lawsuit, filed in 2019. The drug companies were alleged for breaching their legal duties “to profiteer from the plague they knew would be unleashed.”
Per a report by the U.S. Centers for Disease Control and Prevention in November, over 100,000 people died from drug overdoses during the 12-month period ending April 2021, mostly driven by deaths from opioids like fentanyl.
The trial over the governments’ claims was initiated in June, including more than 30 companies as defendants. Apart from Teva and its units, other opioid makers, including Johnson & Johnson and Endo International, drug distributors such as McKesson and Cardinal Health, along with drugstore chains like Rite Aid and Walgreens Boots Alliance, agreed for the settlement to get out of the trial.
Last month, a court in California gave a verdict claiming that Teva did not cause a public nuisance in Orange County, Los Angeles County, Santa Clara County, and the City of Oakland. Furthermore, no false or misleading statements related to marketing prescription opioids were issued by Teva in California.
Additionally, the Oklahoma Supreme Court overturned an earlier judgment against Teva stating that the public nuisance law in Oklahoma does not include the manufacturing, marketing, and selling of prescription opioids.
Wall Street’s Take
In October, Raymond James analyst Elliot Wilbur downgraded Teva to a Hold from a Buy but did not assign a price target.
Wilbur believes that though the company is achieving its near-term financial targets and expects to meet margin and deleveraging targets for 2023, near-term fundamentals remain below expectations.
Overall, the stock has a Hold consensus rating based on two Holds. The average Teva price target of $10 implies 23.8% upside potential from current levels.
According to the new TipRanks Risk Factors tool, Teva stock is at risk mainly from three factors: Finance and Corporate, Legal and Regulatory, and Tech and Innovation, which contribute 25%, 25%, and 20%, respectively, to the total 44 risks identified for Teva.