Takeda offers $2.2B to settle Actos cases, sources tell Bloomberg

From the get-go, the signs for Takeda have not been good for its chances in court against the thousands of claims that it didn't sufficiently warn patients of the cancer risks of its diabetes drug Actos. It lost its very first jury trial in 2013 and then it and Eli Lilly ($LLY) were hit with a breathtaking $9 billion verdict a year later. Now Takeda is looking to extricate itself from the more than 8,000 lawsuits in the U.S. with a $2.2 billion settlement.

Sources point out to Bloomberg that there is no deal yet and that some of the lawyers representing patients who claimed they got bladder cancer after taking Actos don't think the offer is nearly enough. Some legal experts agree it would be a heck of a deal if Takeda could nail it down.

"If Takeda can settle the multidistrict cases for $2.2 billion, they should sign the papers and leave town," Erik Gordon, a law professor at the University of Michigan, told Bloomberg. "Given the results of the trials so far and the number of potential judgments against the company, $2.2 billion is a bargain."

Roughly 3,500 federal lawsuits are pending and another 4,500 in state courts. They have similar allegations: Takeda, and in some cases marketing partner Lilly, were not forthright about evidence that the drug could increase patients' risk of bladder cancer. The FDA added a warning to the drug's label in 2011, but plaintiffs claim that Takeda knew by 2004 of the link but buried the findings. The blockbuster hit peak sales of $4.5 billion in 2011.

Takeda has faced at least 9 juries so far, Bloomberg says, and lost 5 verdicts. Some of those decisions were later overturned. But Takeda got what one lawyer involved called a "wake-up call" last year when a Louisiana jury returned the $9 billion verdict against it and Lilly in the first federal case to go to trial. Lilly was Takeda's marketing partner for Actos in the U.S. until 2006. The judge overseeing the litigation later reduced the verdict by more than 99% to $36.8 million, but it was a sobering event nonetheless.

Takeda's new CEO, Christophe Weber, declined to comment on a possible agreement and reiterated the drugmaker's ongoing position that Actos is a good medicine and provides the right benefit-to-risk ratio for users, but starting his tenure as CEO with a relatively clean legal slate for the company would be a great benefit for him.

Takeda has reportedly turned to Douglas Marvin with Williams & Connolly in Washington, DC, to handle the negotiations. Marvin was the lawyer who worked out a deal in 2007 for Merck ($MRK) to settle roughly 30,000 lawsuits tied to its withdrawn painkiller Vioxx for $4.85 billion.

Sources tell Bloomberg Takeda intends to limit the offer to those patients who have already filed a suit or have hired legal counsel for that purpose in an effort to avoid a new wave of litigation.

One of the lawyers handling the federal lawsuit against Takeda indicated that the chances of such a deal being worked out were small but didn't dismiss the idea that there is some number that would probably get the job done.

"There is no deal and it is highly questionable whether there will be one without further scorched-earth litigation," Paul Pennock, a lawyer for the plaintiffs, told Bloomberg. "But at least Takeda recognizes that attempting to compensate these cancer victims and their families is the right thing to do."

- read the Bloomberg story

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