Teva’s opioid deal with West Virginia removes overhang - Bank of America

Teva Canada Ltd facility in Whitchurch-Stouffville, On, Canada.

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  • Commenting on the recent opioid settlement Teva Pharmaceutical (NYSE:TEVA) announced with West Virginia on Wednesday, Bank of America argues that the multimillion-dollar deal removes a major overhang for the company, given the state’s outsized impact during the crisis.
  • Highlighting the significance of the agreement, the analysts led by Jason M. Gerberry point out that West Virginia was one of the hardest-hit states from the opioid epidemic and notes that Teva (TEVA) plans to reach a global opioid deal by the end of the year.
  • “……thus resolving the matter with a state offers overhang relief (even if at higher cost per capita than other state deals)” the team added.
  • The analysts observe that the company has individually settled with six states so far for $523M payable over 13 – 18 years.
  • However, Bank of America keeps its Neutral rating and $9.00 per share target on Teva (TEVA), citing the lack of progress on topline growth.
  • An imminent global opioid deal was a key consideration when the firm upgraded the stock last week.

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