Eli Lilly's $3 Billion Mistake

After a long court battle for Eli Lilly (NYSE: LLY  ) and partner Takeda, alleging that the companies didn't adequately disclose the cancer risks for Takeda's drug Actos, a jury verdict from the Federal Court of Louisiana came back with a harsher penalty than anyone anticipated. The two companies were fined a combined total of $9 billion, with Takeda carrying the burden of $6 billion, while Eli Lilly will be responsible for the remainder.

In this segment of Tueday's Market Checkup, Motley Fool health care analysts David Williamson and Michael Douglass take a look at what appear to be massive fines at first blush, and discuss why they don't see this as a reason for investors to overreact. They point to three prior Actos cases in which the juries' verdicts were overturned, and note that actual payment of these large fines may still be decades away, after the amounts have been significantly reduced through the appeals process.

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  • Report this Comment On April 14, 2014, at 7:22 PM, madchemists wrote:

    And of course, you forgot that Lilly will be reimbursed by takeda according to the terms of the contract

  • Report this Comment On April 15, 2014, at 7:31 AM, CrashDavis wrote:

    Uh, what $3B mistake? Its been over a week since it was disclosed that Lilly has an indemnification agreement with Takeda. They aren't on the hook for anything. I get that it takes a while for you guys to make and edit your videos, but you're looking more foolish than usual today.

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