Takeda Pharma drops on $2.7bn charge to settle Actos lawsuits

Shares in Takeda Pharmaceutical settled 2.13% lower in Tokyo trade on 30 April, pulled down by news that the Japanese firm and its US arm had struck a $2.4bn (£1.5bn, €2.1bn) agreement to settle a majority of claims involving its diabetes drug Actos.

Actos is an oral medication used to regulate blood sugar levels in patients with type-2 diabetes.

Asia's largest drugmaker, accused of failing to warn users that Actos could raise the risk for bladder cancer, said it believes the claims made in the litigation were without merit and said it does not admit liability.

Takeda said it will take a $2.7bn charge against earnings to cover the settlement costs in the 2014 fiscal fourth-quarter ended 31 March. The charge will also cover costs associated with defending remaining cases and related litigation.

The company, in a statement, said the settlement will become effective if 95% of current litigants and claimants opt into it.

Takeda will then pay $2.37bn into a settlement fund. The sum will rise to $2.4bn if 97% or more of current litigants and claimants opt to participate.

Current litigants and claimants who meet prescribed criteria will receive payouts from the fund.

The company also said that it now expects an operating loss of 145bn yen for the financial year ended in March as against its earlier forecast for a profit of 65bn yen.

Takeda said Actos continues to be available in the US, Japan and other countries and that the settlement will not affect its ability to dole out dividends.

Last October, a US judge had slashed a $9bn punitive damages award to $36.8m against Takeda and Eli Lilly & Co over Actos.

Actos has been in the market since 1999.