Israel-based Teva Pharmaceutical Industries (TEVA.TA) reported Tuesday a dip in profits this year as it continues to forge financial settlements in multiple U.S. legal cases, part of a flood of litigation launched by state and county governments against several pharmaceutical giants for their alleged role in the country's opioid crisis.
Teva said it has already paid $1.1 billion so far in out-of-court settlements amid the barrage of trials across the U.S. taking the company to task. In the last few months alone, the corporation has already reached several settlement agreements, each costing hundreds of millions of dollars, with the states of Rhode Island, Texas and Florida. Meanwhile, the state of New York triumphed last December when a jury found the drugmaker guilty of fueling opiate addiction in the state. The amount in damages the company will have to pay are yet to be determined.
And the company's woes are not over yet. Last Monday, a lawyer representing the city of San Francisco told a judge that Teva and Walgreens ignored the health risks involved when they created new drug markets, making them complicit in the city's battle against opioid addiction that accounts for 25 percent of emergency room visits in its largest public hospital.
As a result, the company's Q1 profits are shrinking, the world's largest generic drugmaker reported on Tuesday. According to a statement, it earned 55 cents per diluted share excluding one-time items in the January-March period, down from 63 cents a share a year earlier.
Aside from the litigation saga, Teva is facing a drop in sales in North America of both generic drugs and its own multiple sclerosis treatment Copaxone, which is facing stiff competition, revenue fell 8% to $3.66 billion.
Teva lowered its 2022 revenue estimate to $15.4-$16.0 billion from $15.6-$16.2 billion, after revenue of $15.9 billion in 2021. It reiterated its projection for 2022 adjusted EPS of $2.40-$2.60, versus $2.58 last year.
Overall generic drug sales in North America dipped 15% to $899 million due to competition on many products.
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Revenue in Europe slipped 5% to $1.16 billion, although sales of Ajovy doubled to $30 million.
"While easing of COVID-19 related restrictions has led to positive momentum in our European business, we are seeing fluctuations of foreign exchange rates, and have therefore lowered our 2022 revenue outlook," said CEO Kåre Schultz.