Pharmaceutical company Allergan, which sold Actavis, its generic drug division, to Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), is blaming the Israeli company in the lawsuits filed in the opioid addictive painkillers affair in the US, saying that it sold all of its generic drug assets to Teva in 2016.
As part of the settlement that it reported last Friday, Allergan also is seeking indemnification from "other parties" involving one of its products included in the opioid affair, while at the same time saying that it sold all of its generic drug assets to Teva four years ago. All of the lawsuits in question apply to the years preceding the Teva-Allergan deal, which put the Israeli company in hot water.
"Allergan has not actively marketed or promoted any opioid products since 2013," the company wrote in a press release accompanying the settlement it signed with two counties in Ohio late last week. "Allergan recognizes the seriousness of the opioid abuse problem. Allergan has a history of supporting - and continues to support - the safe, responsible use of prescription medications. This includes FDA-approved opioid pain medications."
As part of the settlement, approval of which is not certain, Allergan agreed to pay $1.9 million to Summit County, Ohio and $3.1 million to Cuyahoga County, Ohio. "The company believes that settling with these plaintiffs is in its interest in light of anticipated time and defense costs for this first multi-defendant bellwether trial in the federal multidistrict litigation." Allergan wrote. "The company is seeking indemnification from other parties relating to one of its products involved in the litigation. Allergan does not have liability for generic claims. All generic assets were sold to Teva in 2016."
Approval of Allergan's agreement is by no means certain, because late last week, Ohio Attorney General David Yost sought the postponement of a trial scheduled to begin on October 21. He asserted that Summit and Cuyahoga Counties, which filed lawsuits against opioid manufacturers and distributors, had no legal authority to file such actions, and that only the State of Ohio had such authority, because the state must fairly divide the compensation for the public.
Teva and Allergan signed a deal for Teva's acquisition of Actavis in July 2015, and the deal was completed in August 2016. The price for the deal was $40.5 billion, including $33.75 billion in cash and the other $6.75 billion through an allocation of 10% of Teva's shares to Allergan.
This acquisition, the largest in Teva's history, in retrospect gave Teva a huge debt that put the company in a precarious financial position. Teva's negative cash flow in the second quarter this year puts the company in jeopardy of being unable to service its debt, while the opioid affair continues to loom in the background.
Published by Globes, Israel business news - en.globes.co.il - on September 1, 2019
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