By Tamara Mathias
(Reuters) – Shares of Johnson & Johnson lost 2% on Wednesday after a jury awarded $ 8 billion in punitive damages to a man accusing the drug maker of not having warned that young men using her Risperdal antipsychotic might develop breast.
Analysts called the amount excessive, especially since the plaintiff, Nicholas Murray, had already earned $ 680,000 in compensatory damages on his claims.
But many said investors were now worried that J & J's shares would be subject to additional legal costs in the fight against other claims about Risperdal, its opioid treatments and its talc.
"It's definitely a disproportionate reward," said Lee Hambright, an analyst at Bernstein, noting that the drug's label, approved by the FDA, mentioned breast growth as a side-effect.
"(But) I think the stock reaction shows how sensitive investors are to Johnson & Johnson's litigation concerns."
Lawrence Biegelsen, a Wells Fargo analyst, said the $ 8 billion "will certainly be reduced".
"The Supreme Court said that there should be a one-to-one ratio between compensatory and punitive damages," he said.
"The big number here is the compensatory damages."
J & J stated that the decision was "totally disproportionate to the original compensatory decision" and said it was confident that it would be overturned.
The verdict of the Philadelphia Court of Common Pleas was the first in which a Pennsylvania jury was able to consider awarding punitive damages in one of the thousands of Risperdal cases pending in this case. State.
In 2013, Johnson & Johnson disbursed more than $ 2.2 billion for the resolution of civil and criminal investigations by the United States Department of Justice into the commercialization of Risperdal and other drugs. .
According to a recent report, the company faces approximately 13,400 lawsuits related to Risperdal, alleging that the drug has caused a condition in boys called gynecomastia, characterized by an enlarged breast tissue.
Risperdal was approved by the US Food and Drug Administration in 2002 to treat schizophrenia, but its use in children was not allowed until 2006.
Although the drug's label indicates that gynecomastia has been reported in 2.3% of patients treated with Risperdal in clinical trials involving 1,855 children and adolescents, the lawsuits generally involve the fact that Company has underestimated the risk.
Johnson & Johnson is also part of the drug makers named in lawsuits to hold the pharmaceutical industry responsible for the opioid crisis in the United States. In August, he was asked to pay $ 572.1 million to the state of Oklahoma for his role in the development of the epidemic.
(Report by Tamara Mathias to Bengaluru, edited by Patrick Graham)