Relief seemed to be the main response to reports yesterday that producers of opioid drugs were close to settling claims against them. The sums involved are huge, with Johnson & Johnson alone reportedly agreeing to pay $4bn, but at least the saga could be coming to an end. That appeared to be the feeling on the markets yesterday at least, with J&J’s stock closing up 2%; other opioid makers including Mallinckrodt and Endo also rose. The news looks particularly good for Teva, which is said to have agreed to give away $15bn of generic drugs over 15 years. Bernstein analysts, who estimated such a deal would cost Teva $550m per year, argued that anything that could help the debt-ridden company avoid bankruptcy would represent a success; Purdue filed for bankruptcy last month. Teva's stock climbed 7% today although the company, which has set aside $646m for legal settlements, still has to contend with price-fixing allegations. But the rest of the industry will hope that it can draw a line under the opioid crisis and focus on the next big issue – drug pricing – ahead of next year’s US elections.
|Stock moves in response to opioid settlement reports|
|Company||Share price move|
|Johnson & Johnson||2%|
|Note: all calculated using closing price on Oct 16 vs Oct 15, 2019.|