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Japan drugmaker Takeda to fight ${esc.dollar}6 bln damages imposed by U.S. jury

Source: Reuters - Tue, 8 Apr 2014 14:10 GMT
Author: Reuters
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* Louisiana jury orders $6 bln damages from Takeda, $3 bln from Eli Lilly

* Takeda vows to vigorously fight the result including via appeal

* Plaintiffs' lawyer acknowledges not sure if damages will be upheld

* Takeda shares mark biggest one-day loss in five years (Adds Lilly comment)

By Daniel Levine and Edmund Klamann

SAN FRANCISCO/TOKYO, April 8 (Reuters) - Takeda Pharmaceutical Co Ltd said it would contest $6 billion in punitive damages imposed by a U.S. federal jury in a case alleging Japan's largest drugmaker had concealed cancer risks associated with its Actos diabetes drug.

Eli Lilly and Co, Takeda's co-defendant in the case, was ordered to pay $3 billion in punitive damages.

"We intend to vigorously challenge this outcome through all available legal means, including possible post-trial motions and an appeal," Kenneth Greisman, general counsel of Takeda Pharmaceutical USA Inc, said in a statement.

Lilly, which co-promoted Actos from 1999 to 2006, said in a press release it will be indemnified by Takeda for its losses and expenses around the litigation based on the terms of its agreement with Takeda. It plans to also challenge the outcome of the case.

Takeda's shares fell as much as 8.8 percent to an eight-month low in Tokyo trading on Tuesday after the verdict. The stock ended 5.2 percent lower at 4,572 yen.

Lilly shares fell 0.2 percent, or 12 cents per share, to $58.50 per share in New York Stock Exchange trading.

The massive award was met with "stunned silence" in the packed Lafayette, Louisiana, courtroom, plaintiffs' lawyer Mark Lanier said.

Lanier acknowledged it was not certain whether the damages award would be sustained as the legal process continued.

"Nobody has gone out and bought a new home," he told Reuters.

"This is a conservative judge and a conservative court and she's very 'balls and strikes'. We're not under any grand illusion."

He added that the judge wanted post-verdict motions filed quickly but had set no precise schedule.

The $9 billion in punitive damages awarded by the jury against Takeda and Eli Lilly exceed the $5 billion penalty that a jury in Alaska imposed on Exxon Mobil Corp for the Exxon Valdez oil spill in 1989.

The U.S. Supreme Court ruled in 2008 that the previous Exxon Valdez award had been "excessive". The company was ultimately ordered to pay $500 million. That and other rulings have been read as limiting punitive damages in federal cases.

Punitive damages are meant to discourage other companies from bad conduct. Compensatory damages are meant to pay victims for their actual losses.

In the latest Actos case, the jury also ordered the payment of $1.475 million in compensatory damages in the suit.

The allocation of that liability was 75 percent for Takeda and 25 percent for Lilly, according to Lilly.

Lanier said the jury deliberated for only an hour and 10 minutes to deliver its verdict finding liability on all 14 questions, and another 45 minutes to come out with the multibillion-dollar punitive damages.

Takeda said judgements were entered in Takeda's favour in all three previous Actos trials, while this was the first federal case to be tried as well as the first of a consolidated multidistrict litigation.

Last May, a U.S. judge had nullified a separate jury verdict for $6.5 million against Takeda after ruling that the plaintiffs failed to offer any reliable evidence that Actos had caused cancer.

Germany and France suspended use of the drug, a multibillion-dollar seller, in 2011 due to worries about a possible link to cancer.

The case before the U.S. District Court, Western District Louisiana, is In Re: Actos Products Liability Litigation Case No. 6:11-md-2299. (Additional reporting by Ritsuko Shimizu in Tokyo and Caroline Humer in New York; Editing by Kevin Krolicki, Stephen Coates, Ryan Woo and Meredith Mazzilli)

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