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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowEli 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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