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Reports US

US stock market daily report (April 08, 2014, Tuesday)

April 9, 2014, Wednesday, 03:34 GMT | 22:34 EST | 07:04 IST | 09:34 SGT
Contributed by Millennium Traders


Takeda Pharmaceutical Co. Ltd, Japan's largest drugmaker, has been charged by a U.S. federal jury in front of a packed Lafayette, Louisiana courtroom, for concealing cancer risks associated with its diabetes drug, Actos (pioglitazone). Actos is an oral diabetes medication that helps control blood sugar levels in adults with type 2 diabetes. As a result, the jury imposed $6 billion in punitive damages against Takeda. Punitive damages are meant to discourage other companies from similar bad conduct. Takeda's co-defendant in the case and co-promoter of Actos from 1999 to 2006, Eli Lilly and Company (LLY-NYSE), was ordered by the jury to pay $3 billion in punitive damages. In a press release, Lilly not only said they plan to challenge the ruling but also that they will be indemnified by Takeda for its losses and expenses around the litigation based on the terms of its agreement with the Japanese pharmaceutical.

According to Lilly, during the latest Actos case, the jury ordered the payment of $1.475 million in compensatory damages with liability allocation of 75% for Takeda and 25% for Lilly. Compensatory damages are meant to pay victims for actual losses incurred.

Takeda reported judgments were entered in their favor, during three previous Actos trials. This trial however was the first federal case to be tried as well as the first of a consolidated multi-district litigation. During May 2013, a U.S. judge 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.

Mark Lanier, lawyer for plaintiffs, said the massive punitive damages award was met with "stunned silence" by the entire courtroom. Lanier reportedly said, "Nobody has gone out and bought a new home," referencing the fact remains as to whether the damages awarded would be sustained as the legal process continues. He added that the judge wanted post-verdict motions filed quickly with no precise schedule and said that, "This is a conservative judge and a conservative court and she's very 'balls and strikes'. We're not under any grand illusion." Per Lanier, the jury deliberated for slightly over one hour before delivering their verdict of liability on all 14 questions, followed by an additional 45 minutes to conclude the multi-billion-dollar punitive damages award.

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

During 2011, Germany and France suspended the use of Actos due to concerns over its potential link to cancer.