The company’s stock is down more than 80% from three years earlier.
Last week, Teva Pharmaceuticals saw its stock drop more than 11% after announcing it would pay $85 million to the state of Oklahoma for its role in the opioid crisis. The settlement is alarming in itself and some analysts are concerned that this is just the tip of the iceberg.
And unfortunately, they may be right. The company’s shares have been on a downward spiral for years now.
Teva’s shares are down 37% year to date and 81% over the last three years. UBS analyst Navin Jacobs downgraded the company and cut the price target from $22 to $12 per share.
Challenges lie ahead for Teva Pharmaceuticals
The company currently faces more than 1,500 legal disputes over its opioid distribution practices. According to Jacob, Teva Pharmaceutical could end up spending as much as $4 billion to settle these lawsuits.
The company already settled one lawsuit when it agreed to pay Oklahoma $85 million. Teva Pharmaceuticals didn’t admit to any wrongdoing and released a statement saying it hadn’t contributed to the opioid crisis.
And the company is also involved in a price-fixing lawsuit. Attorneys from 44 different states are pursuing lawsuits against a number of different pharmaceutical companies for the alleged price-fixing scheme.
The companies are accusing of conspiring to inflate and manipulate drug prices. Teva Pharmaceuticals has been identified as the main culprit in this conspiracy.
Teva denies its involvement in this as well and has stated it will fight the lawsuits. But the company is unlikely to emerge from this situation unscathed. Jacob estimated that this could cost the company an additional $600 million to $3.2 billion.
It’s unclear what will come from these lawsuits but it seems likely that the company will face a significant fallout. In the coming months, Teva faces a federal court trial in Cleveland related to numerous opioid abuse cases.
The overall consensus on Teva Pharmaceuticals seems to be a wait and see approach. Out of 26 analysts, 19 recommended a “hold” rating while three recommended a “sell” rating.