S&P: Eli Lilly unaffected

Standard & Poor's said that there is no impact on the rating of Eli Lilly & Co. (AA/stable/A-1+) due to the disclosure in an 8-K filed Sept. 8 that there is an additional lawsuit regarding the company's improper labeling on Zyprexa.

The new lawsuit, filed Aug. 25, purports to be a class action on behalf of all consumers and third-party payors that have paid for Zyprexa, and is the fourth Zyprexa-related lawsuit against the company purporting to be class action.

In the second quarter, Lilly took a Zyprexa litigation-related charge of $1.1 billion, which included $700 million to settle 8,000 individual claims, or roughly 80% of the outstanding claims against the company.

S&P said it believes that the Zyprexa litigation will be an ongoing uncertainty, but, based on the recent $700 million settlement, should not result in a cash outflow that would drastically change the credit profile of the company within the foreseeable future. Meanwhile, Lilly has several relatively new drugs that are expected to meaningfully diversify revenues.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.