Teva woes continue amid congressional probe, negative outlook
According to the May lawsuit filed by Connecticut Attorney-General William Tong, Teva significantly raised prices on approximately 112 different generic drugs between July 2013 and January 2015.
By EYTAN HALON, REUTERSThe CEO of Teva Pharmaceutical Industries Kare Schultz speaks during a news conference to discuss the company's 2019 outlooks in Tel Aviv, Israel February 19, 2019(photo credit: AMIR COHEN/REUTERS)
Shares in Israeli drugmaker Teva Pharmaceutical Industries plunged 10% further during Wednesday trading on Wall Street amid accusations of obstructing a congressional inquiry into price-fixing and Moody’s revised negative outlook for the company.The dual-listed pharma company’s stocks have tumbled almost 59% since the start of the year, almost reaching a two-decade low, and is battling legal accusations in addition to a lengthy process of wholesale restructuring and ambitious cost-cutting measures implemented by CEO Kare Schultz.On Wednesday, US House Oversight Chairman Elijah Cummings along with US Senator Bernie Sanders, the ranking member on the Senate Budget Committee, called on Teva and fellow drugmakers Mylan N.V. and Heritage Pharmaceuticals to turn over documents as part of an ongoing congressional review over generic drug price increases, and accused the companies of “apparent efforts to stonewall” the probe.The lawmakers first launched the probe in 2014. In May, 44 US states filed a lawsuit against the three drugmakers and 17 other generic pharmaceutical companies over allegations of an extensive drug price-fixing conspiracy worth “many billions of dollars.”Now, Cummings and Sanders said they were “opening an investigation into the companies’ apparent coordinated obstruction of the investigation as revealed by,” the states’ lawsuit.“Not only did your company’s apparent obstruction undermine our investigation, but it may have caused further harm to patients and health care providers by delaying the discovery of evidence about the companies’ price-fixing,” Cummings and Sanders wrote.According to the May lawsuit filed by Connecticut Attorney-General William Tong, Teva significantly raised prices on approximately 112 different generic drugs between July 2013 and January 2015, and colluded with “high quality” competitors on at least 86 of them. While the extent of the price increases varied, some prices hikes allegedly exceeded 1,000%.Petah Tikva-headquartered Teva, which currently manufactures approximately 550 FDA-approved generic products, has denied the allegations.Also on Wednesday, rating agency Moody’s Corporation revised its financial outlook for Teva and its subsidiaries from stable to negative, citing the company’s “persistently high leverage and large refinancing needs, in light of its rising exposure to opioid-related litigation.”The negative revision also reflects, Moody’s said, the minimal cushion in the rating for any negative developments in operating performance, including weak uptake of Teva’s new migraine drug, AJOVY; acceleration of erosion of multiple sclerosis treatment Copaxone; inability to stabilize profitability in the US generics business; or large cash outlays related to litigation.Moody’s highlighted “sizable” debt maturities over the next few, including more than $2 billion that matures by the end of 2020. While the rating agency believes that Teva has sufficient liquidity to repay 2020 maturities, the drugmaker will “not generate sufficient cash flow” to repay approximately $4.2 billion of debt that matures in 2021.Earlier this month, Teva reported revenues of $4.337 billion during the second quarter of 2019, a decrease of 8% compared to the second quarter of 2018. Reduced revenues were attributed to generic competition to Copaxone, and declines in revenues from Tranda/Bendeka and certain other specialty products in the US.As of June 30, Teva’s debt stands at $28.726 billion, compared to $28.624 billion as of March 31. The increase, Teva said, was mainly due to exchange rates fluctuations.
Related TagsTevalawsuit
if(catID != 151){
var cont = `Take Israel home with the new Jerusalem Post Store
