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Takeda Pharma offers $2.2B to settle Actos cases

  • In an effort to avoid any more large verdicts against it, Takeda Pharmaceutical (OTCPK:TKPHF) (TKPYY) offers to pay more than $2.2B to settle 8,000+ lawsuits accusing the company of hiding the cancer risks of its Actos diabetes drug. Patients allege the company ignored/downplayed the cancer risks of Actos prior to its launch in 1999 and misled regulators about the drug's risks. The deal would amount to a payment of ~$275K per case and would bring the three-year litigation fight to an end. Its offer pertains only to patients who have already sued or who have already hired a lawyer to file a suit.
  • A jury award in a Louisiana federal court last year provided substantial motivation for Takeda to settle the cases. A shopkeeper who blamed Actos for causing his bladder cancer was awarded $9B, later reduced to $36.8M by the judge.
  • Unsurprisingly, some attorneys feel that $2.2B falls short of adequate compensation to the patients who developed bladder cancer after taking Actos. More than 3,500 cases have been consolidated under U.S. District Court judge Rebecca Doherty in Lafayette, LA. Another 4,500 cases are pending in four other states.
  • Actos sales peaked in the year ended March 2011 at $4.5B, representing 27% of Takeda's revenue. Eli Lilly (NYSE:LLY) was Takeda's commercial partner beginning in 1999, but the partnership ended in 2006 with Lilly retaining the rights to Actos in parts of Asia and Europe and in Canada and Mexico. Lilly says Takeda agreed to cover all legal costs regarding Actos sales in the U.S.

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