Teva Pharmaceutical shares closed down 3.4% at 24.35 shekels ($6.72) on the Tel Aviv Stock Exchange on Wednesday after Purdue Pharma and its owners, the Sackler family, proposed to pay between $10 billion to $12 billion to settle over 2,000 claims in a consolidated case scheduled for October 21 in Cleveland, Ohio, as reported by CNBC.
Purdue is a privately owned company that manufactures Oxycontin, an opioid analgesic used to treat chronic and severe pain. The settlement offer was made one day after an Oklahoma judge, Thad Balkman, found Johnson & Johnson liable for $572 million in damages to the state of Oklahoma for its part in fueling an opioid epidemic by deceptively marketing addictive painkillers, Reuters reported.
Balkman's ruling had if anything been smaller than investors had expected after the state attorney sued for $17 billion, and J&J stock ended in the green on Tuesday. Not so Teva: its stock sank 9.6% on the Nasdaq on Tuesday.
Teva manufactured 34% of all the narcotic painkillers sold in the United States between 2006 and 2012. A settlement with Purdue could lead to a significant payout by Teva, further imperiling its ability to meet its liabilities to bondholders, to whom it owes $26.7 billion.
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