Teva Pharmaceutical could wrap most of its opioid claims this year, an analyst said Tuesday as Teva stock climbed higher.
Specifically, the company added a legal settlement charge worth $1.12 billion to its balance sheet. That brings the total up to $2.6 billion in contingencies toward settling claims that Teva played a role in the opioid crisis, Evercore ISI analyst Umer Raffat said in a report to clients.
He says the company could eventually settle all its cases for about $3 billion. That could end up higher with a number of states still "holding out." Johnson & Johnson has signed on to a $5 billion deal with drug distributors McKesson, AmerisourceBergen and Cardinal Health on the hook for a combined $21 billion.
"My sense is that Teva is likely seeing a path to resolve most of the outstanding cases by year-end 2022," Raffat said.
On today's stock market, Teva stock rose 0.8% to 8.60.
Teva Stock: Sales, Earnings Beat
The first quarter featured declining revenue and earnings that still beat expectations. On an adjusted basis, Teva's earnings fell nearly 15% to 55 cents per share, but topped analyst projections by 2 cents. Sales declined 8% to $3.66 billion, but were above calls for $3.6 billion.
Sales fell primarily due to struggles in North America, particularly from generics-challenged multiple sclerosis treatment Copaxone and Teva's own generics division. In the North America region, sales of lower-cost generic drugs fell 15% to $899 million. Copaxone sales plunged 48% to $86 million.
Teva noted competition for its key generics and lower volumes played a part in its generics downfall.
But those declines were partially offset by higher revenue from its Anda division and generic drugs in Europe. Anda is Teva's wholly owned pharmaceutical distributor.
For the year, Teva cut its sales outlook to $15.4 billion to $16 billion, down $200 million. Chief Executive Kare Schultz noted the guidance trim comes as foreign exchange rates weigh heavily on sales.
The company also expects to earn $2.40-$2.60 per share. Teva stock analysts forecast $15.36 billion in sales and adjusted profit of $2.45 a share.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
