Teva Pharmaceutical Industries CEO Kare Schultz speaks during a news conference to discuss the company’s 2019 forecasts in Tel Aviv, Israel February 19, 2019. REUTERS/Amir Cohen/File Photo
TEL AVIV, Sept 18 (Reuters) – Teva Pharmaceutical Industries ( TEVA.TA ) expects to finalize an opioid settlement in the United States by the end of the year and start paying in 2023, its chief executive said on Sunday, and he is also questioning the company. low share price.
After years of negotiations, Israel-based Teva in July proposed a $4.35 billion nationwide settlement — mostly cash and partly drugs worth between $300 million and $400 million over 13 years — to settle its opioid lawsuits. to resolve. Read more
US states, cities and counties have filed more than 3,000 lawsuits against opioid manufacturers, distributors and pharmacies, accusing them of downplaying addiction risks and failing to stop pills from being diverted for illegal use.
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CEO Kare Schultz said the company was working on legal wording that should be wrapped up by the end of September. It then requires approval from states and subdivisions within states.
“Once they opt in, once that’s done … then it goes into effect and that means the first payments happen next year and continue for 13 years,” Schultz told a news conference . “So by the end of the year, you should have this clarification that it will all come together and we will start paying next year.”
Teva has denied wrongdoing, saying it sold a legal medication approved for pain treatment.
The US opioid crisis has led to more than 500,000 overdose deaths in the past two decades, including more than 80,000 in 2021 alone, according to government data.
Schultz said Teva would further cut costs by closing some of its sites. Since 2017 the number of manufacturing plants has been reduced to 53 from 80 and it plans to close 10 more in the next few years.
Teva’s New York-listed shares are up 10% year to date in 2022 at $8.81 but well off a peak of $72 in 2015.
Schultz noted that Teva has a price-to-earnings ratio of about 3.5, but the normal ratio should be 10. “Teva has one of the lowest P/E ratios of any stock that I know, and the very stable business in fact, which will grow. long-term and generate cash – so it’s very good for long-term investors,” Schultz said.
“Right now it’s worth a third of what you would see the normal value if we didn’t have these risk factors.”
He suggested that the low share price was largely due to high debt, which came down to $20 billion from $34 billion, and the opioid litigation.
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Reporting by Steven Scheer;
Editing by Alison Williams and Frances Kerry