Shares of Teva Pharmaceuticals rallied on Tuesday after another drug maker facing a lawsuit over its alleged role in fueling the U.S. opioid epidemic agreed to pay a small $10 million settlement to avoid going to trial.
The settlement with Endo International raised hopes that Israel-based Teva, among the drug makers embroiled in the affair, might also be able to settle for a relatively small sum. That was fortified by a Wall Street Journal report that Allergan was negotiating a $5 million deal in the same suit.
The news sent Teva shares more than 7% higher in New York trading, but the gains eventually were trimmed back to about 4% in early after at $6.99 a share.
Lawyers for the two Ohio counties were litigating the case as a test trial to allow parties to gauge the value of the remaining claims and inform potential settlement talks. Thus the settlement suggested that the claims drug makers failed to take proper precautions to detect and halt suspicious orders of opioid drugs were not strong enough to go to trial.
The amounts are tiny in comparison to opioid settlements reached by Teva and Purdue in a separate Oklahoma lawsuit against opioid drug makers. Purdue reached a $270 million deal and Teva agreed to pay $85 million.
Endo’s chief legal officer, Matthew Maletta, said in a statement called the settlement a “favorable outcome” for the company and stressed that its value should not be extrapolated to any other opioid-related cases.
Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention.
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More than 2,300 lawsuits by state and local governments are pending nationally, accusing drug manufacturers like Teva of deceptively marketing opioids in ways that downplayed their risks.
In related news, Teva said its generic version of Mylan’s best-selling EpiPen allergy treatment for young children would be available in most retail pharmacies at a price of $300 for a two-pack.
Teva, the world’s largest generic drug maker, is already selling the product for adults, after getting U.S. approval for its copy of EpiPen in August following several years of delay.
There has been a shortage of EpiPens in the United States, Europe and Canada, mainly due to a series of manufacturing delays at Pfizer’s Meridian Medical unit that produces all EpiPens sold globally at a single plant near St. Louis.