Teva Pharmaceutical Industries’ CEO said on Tuesday that the company remains optimistic that it will reach a nationwide settlement in lawsuits alleging that it and other drug companies fueled the U.S. opioid epidemic by the end of the year.
Teva, the world’s largest generic drugmaker, increased its legal provision for opioid litigation by $1.1 billion in the first quarter, bringing it to $2.6 billion.
“It’s the result of a holistic assessment of the impact of (state) settlements we’ve done so far, (and) what’s the most likely outcome based on our current negotiations,” CEO Kre Schultz told analysts on a conference call following the company’s first-quarter profit, which was in line with expectations.
In February, Schultz told Reuters that Teva was preparing to pay up to $3.6 billion in cash and medicines to settle thousands of lawsuits.
Teva reached settlements with Florida and Rhode Island in March, with a bench trial in West Virginia scheduled for this month and another in San Francisco scheduled for July. However, Schultz is hoping for a nationwide settlement, and talks are ongoing to that end.
“We’re getting closer,” Schultz stated. “I’m feeling a little more optimistic about the timeline now. That is why I am hopeful that a nationalized settlement will be reached before the end of the year.”
Teva earned 55 cents per diluted share, excluding one-time items, in the January-March quarter, down from 63 cents a share the previous year.
Revenue fell 8% to $3.66 billion as a result of lower sales of both generic drugs and its own multiple sclerosis treatment Copaxone in North America, where it faces stiff competition.
According to Refinitiv I/B/E/S data, analysts expected Teva to earn 55 cents per share ex-items on revenue of $3.76 billion.
Teva reduced its revenue forecast for 2022 to $15.4-$16.0 billion from $15.6-$16.2 billion due to currency fluctuations, following revenue of $15.9 billion in 2021. It reaffirmed its forecast for 2022 adjusted EPS of $2.40-$2.60, up from $2.58 last year.
Ajovy, the company’s migraine drug, saw a 16 percent increase in sales to $36 million, giving it a 24 percent market share, which Schultz expects to increase to 33 percent. Austedo, a treatment for Huntington’s disease, saw a 6% increase in sales to $154 million, with a $1 billion forecast for 2022.
Due to competition on many products, overall generic drug sales in North America fell 15% to $899 million.
In Europe, revenue fell 5% to $1.16 billion, despite Ajovy sales tripling to $30 million.
Teva’s net debt has been reduced to $20.7 billion, and the company is continuing to use all of its cash to pay down debt.
In early trading, its New York-listed shares were unchanged at $8.55.