AbbVie sets aside $2 billion to settle U.S. opioid claims
2022.07.29 19:10
The logo for AbbVie is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly
By Manas Mishra and Brendan Pierson
(Reuters) -AbbVie Inc has set aside about $2 billion to resolve thousands of lawsuits against the marketing of opioids by its Allergan (NYSE:AGN) unit, the drugmaker said on Friday.
The company faces more than 3,000 lawsuits from state and local governments around the country over the drug. No final deal has been announced and AbbVie (NYSE:ABBV) denies wrongdoing.
It recorded $2.20 billion for litigation in the second quarter, citing a charge for a potential settlement of lawsuits involving Allergan’s past sales of opioid products such as Kadian.
That, along with a cut to the annual sales forecast, sent the company’s shares tumbling 5%.
The charge comes days after Teva Pharmaceutical (NYSE:TEVA) disclosed a $4.35 billion settlement of opioid lawsuits. Teva bought Allergan’s generic drugs unit in 2016 and its settlement was contingent on Allergan reaching a nationwide deal.
COMPETITION HITS CANCER DRUG
AbbVie now expects annual net revenue of $58.9 billion, compared with $59.4 billion previously. The forecast cut was mainly due to weak demand for its blockbuster drug Imbruvica that is used to treat leukemia and faces stiff competition.
The drug’s sales missed market estimates by more than $100 million in the second quarter and the company lowered the expectation for its full-year sales by about $700 million to $4.7 billion.
Overall sales in the April-July quarter came in at $14.58 billion, missing analysts’ expectations of $14.64 billion, according to Refinitiv IBES data.
AbbVie said innovation could take a hit from a proposed bill that aims to lower the cost of prescription drugs by allowing Medicare to negotiate treatment prices. The comments echoed statements made by Merck & Co and Pfizer (NYSE:PFE).
“It’s not a negotiation. We should just call it what it is. It’s price control … And ultimately, I think the real challenge is how we, as an industry, invest in innovation,” said Chief Executive Officer Richard Gonzalez.
