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Lilly stock shows little impact from $3B court award

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Eli Lilly and Co.’s stock showed little change Tuesday morning in the wake of a federal court decision that saw jurors order the company to pay a massive damage award related to its Actos diabetes medicine.

Takeda Pharmaceutical Co. and Lilly on Monday were told to pay a combined $9 billion after the jury found they hid the cancer risks of their Actos medicine in the first U.S. trial of its kind.

Indianapolis-based Lilly, Takeda’s partner, was ordered to pay $3 billion, an amount that represents nearly 13 percent of its 2013 revenue total of $23.1 billion.

Lilly’s stock was down just 1 cent late Tuesday morning, to $58.61 per share, a good indication that investors don’t think Lilly will be on the hook for much, if any, of the damage award.

“The judgment is so out of line with actual damages that it shows a runaway jury, not a verdict that is likely to stand, even if an appeals court believes Takeda and Lilly wrongfully hid the risk of cancer,” Erik Gordon, professor at the University of Michigan’s School of Law and Ross School of Business, told Bloomberg News.

Takeda and Lilly officials said they’d appeal the jury verdict, which may be the largest single award in U.S. history over a drugmaker’s mishandling of a product.

Lilly noted it wasn't named in three previous Actos trials, all of which were found in Takeda's favor.

“Lilly’s shares … shouldn’t be down,” Mark Schoenebaum, an analyst with ISI Group LLC, told Bloomberg, noting that the company’s indemnity agreement with Takeda should eliminate any exposure to the verdict.

    
 

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

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  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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