Teva Pharmaceutical inked settlement deals worth upward of $4 billion for its role in the opioid crisis, and Teva stock skyrocketed on Wednesday.
The most sweeping deal involves 12 states leading a nationwide negotiation and is worth $4.25 billion over 13 years. In a second deal, Teva will pay West Virginia $75 million over 15 years. In both deals, Teva is on the hook for free opioid overdose treatment for the next decade, or a cash payment. The company will also reimburse West Virginia for $8 million in attorneys' fees and trial costs.
By settling, Teva doesn't admit any liability or wrongdoing. But Tennessee Attorney General Herbert Slatery had strong words for the drug company. Tennessee was one of the states involved in the nationwide negotiation.
"One problem we encountered with Teva (as we have with other manufacturers) is the advice it gave when opioids were losing their effectiveness for clearly addicted patients — just up the dosage," he said in a written statement. "I don't have enough adjectives to describe how poor that advice was."
On today's stock market, Teva stock soared 28.4% to close at 9.14.
Teva Stock: Second-Quarter Beat
The settlements come on the back of a second-quarter beat.
Teva reported $3.79 billion in sales, down 3%, and adjusted per-share earnings of 68 cents. Income fell 15%. Teva stock analysts forecast $3.78 billion in sales and earnings of 56 cents a share.
In North America, revenue from generic drugs climbed 8% to $1.03 billion, though fell abroad. Migraine treatment Ajovy brought in $49 million in North America, climbing 9%. Sales were smaller but grew by double digits in Europe and the international market. Sales of tardive dyskinesia drug Austedo, which only sells in North America, increased 17% to $204 million.
But multiple sclerosis medicine Copaxone, which is facing generic rivals, saw broad declines. In the North America and Europe segment, sales fell 38% and 28%, respectively. International sales rose 27%, but that was from a small base to $9 million.
Teva also cut its 2022 sales outlook, citing exchange rate challenges as the dollar rises to its highest value in two decades. The company now expects $15 billion to $15.6 billion in sales. Three months ago, the midpoint of its sales outlook was $15.7 billion. The guidance calls for a fall from $15.9 billion in sales last year.
The company reaffirmed its adjusted earnings outlook for $2.40-$2.60 per share vs. Teva stock analysts' projection for $2.47.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
