26 June Pharmaceutical Company Johnson & Johnson (NYSE: JNJ) announced the conclusion of a settlement agreement with the state of New York in the opioid case. For 9 years the company will pay the state 230-260 million dollars as compensation. More J&J will not be able to promote opioid drugs as locally, as well as at the national level.
Johnson & Johnson reaches settlement ahead of trial, That will take place 28 June. Other defendants are pharmaceutical organizations Endo Health, Teva, Allergan Finance, affiliated organization AbbVie, also big McKesson dealers, Cardinal Health, AmerisourceBergen и Rochester.
Johnson & Johnson convinces, that the new fine is part of the global agreement concluded before this. Under the agreement, the company will pay a total of $5 billion in fines to all states and cities..
Janssen Pharmaceutical Organization, affiliate J&J, developed two prescription products - Duragesic and Nucynta. These are opioid pain relievers, which can cause feelings of euphoria and addiction. Drugs have many side effects, and their overdose often ends in death. Since 2015 J&J does not sell opioids in the US, and in 2020 completely finished their creation.
Nearly 500,000 people have died from opioids in the United States in the past 20 years.. The witch hunt has begun: more than 3 thousand court applications were registered on the territory of the entire state. Pharmaceutical manufacturers blamed for deceitful marketing, and dealers - including, that they were selling prescription drugs off label. The court forced Johnson & Johnson and McKesson dealers, Cardinal Health and AmerisourceBergen to pay $26 billion in heavy fines.
$5 billion opioid fine already priced into J stock price&J. If this penalty does not increase over time, this will be good news for the company.. Five billion is a big one, but a manageable amount for a pharmaceutical giant, given its large and stable cash flows.
The court recently dismissed J's appeal&J, who tried to challenge the $2.1 billion fine. 22 women filed a class action lawsuit: they claimed, that got cancer after using baby powder, which contained harmful substances. The court later reduced the fine from 4,7 up to $2.1 billion.
Over the five years of Johnson stock & Johnson rose to 35%. More J&J is on the list of dividend aristocrats: company 58 increases the size of its dividends for years in a row. dividend yield - 2,6%.
Johnson financials & Johnson, billion dollars
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Revenue | 81,6 | 82,1 | 82,6 |
| Operating cash flow | 22,2 | 23,4 | 23,5 |
| free cash flow | 18,5 | 19,9 | 20,2 |
| Dividends | 9,5 | 9,9 | 10,5 |
Revenue
2018
81,6
2019
82,1
2020
82,6
Operating cash flow
2018
22,2
2019
23,4
2020
23,5
free cash flow
2018
18,5
2019
19,9
2020
20,2
Dividends
2018
9,5
2019
9,9
2020
10,5
