Teva made headlines late last month when it inked an $ 85 million settlement with Oklahoma prosecutors over opioid mismarketing allegations—even after CEO Kåre Schultz said the company wouldn’t strike big settlement deals in the ongoing opioid litigation.
Now, an Oklahoma judge in the state has refused to sign off on the deal until he gets more information about how it complies with a new state law, AP reports.
Judge Thad Balkman on Monday ordered prosecutors and Teva’s attorneys to provide information about how the deal conforms to the new law, which requires settlement funds to disburse directly to the state’s treasury, the news service reports.
Lawmakers in the state passed that law after Purdue Pharma and its founding family inked a $ 270 million opioid settlement, which Judge Balkman approved.
In a note to clients, Wells Fargo analyst David Maris wrote that the news “sounds like more of an administrative burden rather than a threat to the actual settlement.” He noted that Teva’s stock was down 7% Wednesday morning on the news, but that “seems overdone.”
The decline does show just how closely Teva investors are watching the legal headlines. After the company agreed on the $ 85 million settlement late last month, Teva shares sank to a 19-year low.
Teva faces nationwide opioid litigation—which could multiply that settlement significantly—and other legal challenges, including price-fixing allegations. On Wednesday, the company’s shares were trading at levels last seen in 1999.
Meanwhile, Oklahoma’s lawsuit against Johnson & Johnson continues. The state says J&J “manipulated” residents into believing their pain drugs were safe to use for long periods of time. Prosecutors aim to recoup “catastrophic” damages the state has suffered as misleading marketing fueled the opioid addiction crisis. J&J has argued it marketed opioid painkillers responsibly.