In New York, a jury found Teva Pharmaceuticals (TEVA) guilty of playing a role in the prescription opioid epidemic. It also found Cardinal Health (CAH), AmerisourceBergen (ABC), and McKesson (MCK) guilty.
All firms mentioned offering good value. Teva is especially compelling after the drop. What happens next?
Appeal
Teva must appeal the ruling. It has a good argument. For example, the Food and Drug Administration approved opioid drugs. Doctors prescribed it and were not sued. Teva said it “strongly disagrees” with the ruling. The firm noted that the plaintiff failed to introduce evidence for medically unnecessary prescriptions. Furthermore, Teva said no evidence supports the link between it and the harm it was accused of causing.
Teva also won a favorable court ruling in California. The court cleared it of charges. The judge said, “The court finds plaintiffs failed to prove an actionable public nuisance for which the defendants are legally liable.”
TEVA stock already traded close to 52-week lows ahead of the court case. The ruling will only delay the stock’s eventual rebound. The firm has billions in debt it must payback. Ajovy is a potential blockbuster that will raise Teva’s cash flow. This will help it pay back its debt.
