The share price of Takeda Pharmaceuticals fell heavily today (April 8th) following the firm being ordered to pay billions of dollars in damages over the risks involved in a cancer drug.
Japanese firm Takeda was told it has to pay $6 billion (£3.6 billion) following a ruling by a court in Louisiana in the US, while case co-defendant Lilly has been ordered to pay $3 billion.
Stocks in Takeda fell heavily on the back of the news, though they recovered later in the day and pared down some of those early losses.
The announcement of the damages Takeda and Lilly have to pay comes only a few days after the same jury awarded $1.5m in compensatory damages to plaintiff Terrence Allen, who claims the companies kept cancer risks associated with diabetes drug Actos a secret from users.
But after it was revealed how much Takeda is expected to pay in damages following the conclusion of the case, the drug manufacturer said it "respectfully disagrees with the verdict".
Kenneth Greisman, senior vice-president of general counsel for Takeda Pharmaceuticals in the US, stated that the company now intends to fight the final result of the court case.
He said: "We have empathy for the Allens, but we believe the evidence did not support a finding that Actos caused his bladder cancer. We also believe we demonstrated that Takeda acted responsibly with regard to Actos. Patient safety is a critical priority for Takeda. We are confident in the therapeutic benefits of Actos and its importance as a treatment for type 2 diabetes."
By the close of today's trading session on the Tokyo Stock Exchange, the share price of Takeda was down by more than five per cent on the start of the day. Although the company's stocks still suffered heavy losses to get the week off to a bad start, the firm's share price recovered from earlier in the day, when it was down by over nine per cent at one point.
Learn about the Asian markets and CFD trading at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.