J&J opioid ruling a relief for shareholders but others may not benefit – WSJ

Johnson & Johnson’s (NYSE:JNJ) perceived positive result in today’s Oklahoma court ruling does not necessarily carry over to bigger litigation in the near future, writes Charley Grant for WSJ’s Heard On The Street, noting more than 2K lawsuits around the country targeting drugmakers and distributors have been consolidated in Ohio and arguments in those cases will not begin until the fall.

JNJ +2.2% after-hours following the Oklahoma judge’s ruling that the company was liable for fueling the opioid crisis and must pay $572M gives investors some hope that opioid litigation may not prove as destructive as some on Wall Street have feared.

Other drugmakers that sell opioid painkillers initially rallied but have pulled back, including TEVA +3.7%, MNK +1.2% and ENDP -0.3%.

JNJ, with nearly $15B in cash on its books at the end of June, has enough money to cope with a bad outcome in future cases, and big drug distributors named in the cases – such as Cardinal Health (NYSE:CAH), McKesson (NYSE:MCK) and AmerisourceBergen (NYSE:ABC) – boast investment grade balance sheets, but Grant notes manufacturers Teva, Mallinckrodt and Endo are all rated junk.

J&J says it will appeal the ruling and ask that the award be put on hold during an appeal process that could stretch into 2021.

https://seekingalpha.com/news/3494740-j-and-j-opioid-ruling-relief-shareholders-others-may-benefit-wsj