MCK - McKesson Corporation
| Previous Close | 150.51 |
| Open | 149.64 |
| Bid | 140.00 x 1000 |
| Ask | 152.98 x 1100 |
| Day's Range | 149.33 - 152.53 |
| 52 Week Range | 106.11 - 152.53 |
| Volume | 3,187,293 |
| Avg. Volume | 1,625,007 |
| Market Cap | 28.153B |
| Beta (3Y Monthly) | 1.23 |
| PE Ratio (TTM) | 49.50 |
| EPS (TTM) | 3.08 |
| Earnings Date | Oct 30, 2019 |
| Forward Dividend & Yield | 1.64 (1.13%) |
| Ex-Dividend Date | 2019-08-30 |
| 1y Target Est | 154.94 |
- Bloomberg
Settling Opioid Suits Probably Won’t End the Crisis
(Bloomberg Opinion) -- Imagine you’re the chief executive officer of a large pharmaceutical corporation with an important drug that’s under attack. More than 2,500 lawsuits have been filed against your company. The plaintiffs aren’t individuals, though, they’re governments — counties, cities and states. And some of the biggest names in the plaintiffs’ bar have agreed to represent these entities, lawyers like Joe Rice, whose firm was said to have earned $1 billion for helping to bring the tobacco companies to heel in the 1990s.You know you’ve got some incriminating-sounding documents in your corporate files — what company doesn’t? — but you also know that the Food and Drug Administration approved your drug. Patients crushed it and snorted it — something that was never intended. And you’re convinced that the plaintiffs are pushing the envelope with the public nuisance laws they are relying on to bring these cases. Yes, your company will probably lose at trial, but you think you have a good chance to win on appeal.Then you look at the army arrayed against you, and it hits you: You’re never going to be able to litigate your way out of this. It’s not just that there are 2,500 lawsuits or that they are being brought by governments. It is what that represents. Government exists to serve the interests of the people, and the people are saying that your company participated in something that inflicted tremendous damage on the country. Hundreds of thousands of people have died. And your company needs to be punished.At this point, you pick up the phone, call your opponents and say, “How much do we need to pay to settle this?”I am obviously not privy to the thinking of the CEOs of the various companies facing opioid lawsuits. But given the news of the last few days, I imagine that their thought process was not too far from what I just described. On Tuesday, the Wall Street Journal reported that three of the distributors being sued — McKesson Corp., Cardinal Health Inc., and AmerisourceBergen Corp. — have offered to pay $18 billion over 18 years to settle their cases. This news leaked less than a week before the start of a big opioid trial in Cleveland, in which the three companies are among the defendants.The next day, Bloomberg News reported that Johnson & Johnson was offering $4 billion to end the litigation, and Teva Pharmaceutical Industries Inc. was proposing to give away $15 billion worth of generic drugs to be freed of the lawsuits. On Thursday, the New York Times reported that the five companies and the states had agreed on the outlines of a settlement that would cost the companies $50 billion.And of course, Purdue Pharma Inc. had already waved the white flag, with a bankruptcy filing last month intended to end the lawsuits by essentially turning the company’s assets over to a trust that would be controlled by the plaintiffs.It is too early to know whether any of these settlement offers will stick. Although the federal judge presiding over the Cleveland trial, Dan Aaron Polster, has asked the CEOs of the three distributors plus Teva to appear Friday to discuss the settlement talks, I’m told that the trial is still likely to begin on Monday, as scheduled.Any settlement will also need approval from the cities and counties that have filed suits. They are deeply suspicious of any deal the states might cut because they remember the outcome of the tobacco litigation. In 1998, the tobacco companies agreed to pay $246 billion over 25 years to the states, but little of that money trickled down to cities and counties. Indeed, a minuscule amount went to anti-tobacco efforts; most of the money is now used to fill state budget gaps.Still, whether it happens next week or next year, the opioid litigation will almost surely end with the companies being sued spending billions to settle it. The stock market practically demands it: Share prices of all the companies that have made settlement offers in recent days have jumped. And continuing litigation drains and distracts a company.Here’s the problem, though. Whenever plaintiffs’ lawyers argue that companies have done bad things and need to pay up, they justify the demand for money by saying it will be used to solve the problem. But will it? In this case, I have my doubts.In an opioid case in Oklahoma a few months ago, a judge ruled that Johnson & Johnson should pay $572 million (later reduced by $107 million), which he calculated would cover opioid abatement services in Oklahoma for just one year. So point one: Ending the crisis will require more money than even Big Pharma can provide.Second, just throwing money at the problem is not going to solve it. States and cities will most likely take different approaches. Some will be better than others. But there is no clear plan coming from the federal government — or anywhere else — about what steps are needed to end the crisis. Until there is, more money is likely to be wasted than not.Third, chances are good that the settlement money will be used for things that have nothing to do with opioids. Again, tobacco in instructive: Settlement money was supposed to be earmarked for tobacco control programs, but in most states the politicians couldn’t resist grabbing it for other purposes.Earlier this summer, during a court hearing, Judge Polster said that “developing solutions to combat a social crisis such as the opioid epidemic should not be the task of our judicial branch.” It was the job, he said, of the executive and legislative branches.He’s right. But that’s just not the American way. In the U.S., when there is a problem with a product, our first instinct is to sue the corporation that made it. When the litigation is settled, money is transferred from shareholders to plaintiffs (and their lawyers). It may be a satisfying resolution, but it rarely solves the problem. To reference tobacco one more time, two decades after the tobacco settlement, 480,000 Americans still die from smoking each year.I suspect the same will be true of the opioid crisis. The companies will settle, the lawyers will pocket millions and the states will get the rest. And the crisis will continue.I’ve said it before, and I’ll no doubt say it again: There’s got to be a better way.To contact the author of this story: Joe Nocera at jnocera3@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
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UPDATE 1-Judge summons drug company CEOs to discuss opioid settlement - source
The chief executives of the three largest U.S. drug distributors and a drugmaker have been summoned to appear before a federal judge to discuss a proposal to resolve thousands of lawsuits alleging they fueled the U.S. opioid crisis, a person familiar with the matter said on Thursday. The order by U.S. District Judge Dan Polster in Cleveland, Ohio, came as distributors McKesson Corp, Cardinal Health Inc, AmerisourceBergen Corp and Israel-based drugmaker Teva Pharmaceutical Industries Ltd moved to reach a deal ahead of a trial before Polster that begins on Monday. All of those companies except J&J are set to be defendants in the trial before Polster, who oversees the bulk of the litigation.
- Investor's Business Daily
Drug Suppliers Reportedly Near $50 Billion Deal In Opioid Lawsuits
The biggest drug distributors, plus Johnson & Johnson and Teva Pharmaceutical, are reportedly on the brink of a $50 billion deal to settle thousands of cases related to the opioid epidemic.
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- Investopedia
Drug Distributor Stocks Rally Amid Opioid Talks
Talks to settle opioid lawsuits sent drug distributor stocks soaring. Trade names at the center of the discussions using these strategies.
- Market Exclusive
Market Morning: Chinese Aircraft Carriers, DUP Sours on Brexit Deal, Big Opioid Settlement
Chinese Aircraft Carrier Factory Revealed This will probably annoy the Trump Administration. Reuters reports exclusively that high-resolution satellite images show that China is progressing in the construction of a full sized aircraft carrier and should be the first of several large vessels produced. The site is called the Jinagnan shipyard and the images were taken […]The post Market Morning: Chinese Aircraft Carriers, DUP Sours on Brexit Deal, Big Opioid Settlement appeared first on Market Exclusive.
- MarketWatch
Broad opioid settlement talks heat up as federal trial looms
Efforts to settle thousands of lawsuits related to the nation’s opioid epidemic intensified Wednesday ahead of the scheduled start of arguments in the first federal trial over the crisis.
- GuruFocus.com
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- Benzinga
Large Option Traders Aren't Buying The Johnson & Johnson Rally
On Wednesday morning, Benzinga Pro subscribers were alerted to several unusually large Johnson & Johnson option trades. At 9:47 a.m., a trader sold 850 J&J call options with a $135 strike price expiring on Friday at the bid price of $1.601. At 11:31 a.m., a trader sold 900 J&J $135 call options expiring on Nov. 15 at the bid price of $3.451.
- MarketWatch
McKesson, Cardinal Health, AmerisourceBergen stocks surge after WSJ report of $18 billion settlement talks
Shares of McKesson Corp. rallied 5.7% in midday trading Wednesday, enough to pace all of its larger-capitalization health care peers, after The Wall Street Journal reported that the drug distributor, and two others, were in talks to pay $18 billion to settle all litigation brought by state and local governments blaming the companies for fueling the opioid crisis. Of the other two drug distributors, shares of AmerisourceBergen Corp. climbed 4.7% and Cardinal Health Inc. hiked up 3.7%. Shares of Johnson & Johnson rose 2.4% after the WSJ report out late Tuesday, citing people familiar with the situation, said the company was also involved in the discussions to contribute additional money. The four companies' stocks topped the list of gainers in the SPDR Health Care Select Sector ETF , which inched up 0.1%, while the S&P 500 slipped 0.2%.
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- Bloomberg
J&J Makes $4 Billion Opioid Offer as Distributors Seek Deal
(Bloomberg) -- Johnson & Johnson has offered to pay $4 billion to settle all claims accusing the company of helping fuel the U.S. opioid epidemic, as part of a potentially larger deal involving drugmakers and distributors that could top $20 billion.J&J’s overture came on the heels of a proposal by distributors McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. to pay $18 billion to wipe out all opioid suits against those companies, according to people familiar with the proposal. The Wall Street Journal first reported the distributors’ offer Tuesday. The money would be paid out in annual $1 billion increments, according to the people, who asked not to be identified because the negotiations are private.J&J and the distributors -- which deliver the majority of prescription medications to U.S. pharmacies -- made the proposal in talks with a group of state attorneys general, the people said. The proposals came on the eve of the first federal trial in Cleveland over responsibility for the public-health crisis tied to opioids.Shares of J&J gained 2.2% at 10:38 a.m. in New York on Wednesday, while McKesson shares rose 7.4%, Cardinal rose 5.7% and AmerisourceBergen gained 6.4%.Teva Pharmaceutical Industries Ltd., another drug manufacturer targeted in the nationwide litigation, offered to give away more than $15 billion in generic drugs, including those that help fight opioid overdoses, to resolve all of its cases, said the people. That agreement would run over 10 years, the people said.Israel-based Teva’s shares rose 6.3% in New York on news of the settlement proposal. Teva’s bonds were among the top performers in the U.S. high-yield market on Wednesday, according to Trace bond trading data. The company’s 6% unsecured bonds rose more than 1.5 cents on the dollar to around 91.5.Other opioid manufacturers implicated in the federal trial, including Mallinckrodt and Endo, also rose in the wake of the news.If all the proposals are accepted, the Cleveland trial likely will be put off given that the three distributors and Teva are the main defendants, the people said. In the trial, two counties are seeking reimbursement for the hundreds of millions in tax dollars spent on the fallout from opioid addictions and overdoses.“As we’ve stated previously, we remain open to viable options to resolve these cases, including through settlement,” Ernie Knewitz, a J&J spokesman, said in an emailed statement.U.S.-based Teva spokeswoman Kelley Dougherty declined to comment on the proposed deal. AmerisourceBergen spokesman Gabriel Weissman and Brandi Martin, a Cardinal Health spokeswoman, also declined to comment. McKesson spokeswoman Sunny Rodriguez didn’t respond to requests for comment.Samantha Fisher, a spokeswoman for Tennessee Attorney Herbert Slatery III, didn’t respond to an emailed request for comment, sent after regular business hours. Slatery is one of the leaders of the negotiations.It’s the first time J&J has put serious money on the table to end its opioid liability, the people said. The drugmaker agreed earlier this month to pay $20.4 million to two Ohio counties to avoid a federal trial, but that didn’t extend to any other opioid claim. Some analysts have said it may take as much as $150 billion to resolve all the opioid cases on file.What Bloomberg Intelligence Says:Johnson & Johnson’s settlement of two opioid cases in Ohio, if reflective of a global settlement, is in-line with our expectation that it could pay up to $5 billion. The news, along with its lower-than-expected Oklahoma fine, may indicate J&J won’t have to contribute much more than others based on its ability to pay.\-- Sam Fazeli, senior pharmaceutical analystClick here to view the research“It’s very rare for J&J to do anything else other than litigate these kinds of cases to the bitter end,” said Carl Tobias, a University of Richmond law professor who teaches about mass torts. “I think investors are going to be very happy they are talking global settlement.”Tobias said an Oklahoma judge’s decision to hit J&J with $572 million in damages over its sales of opioid painkillers in that state may have sent J&J an unmistakable signal. That judge acknowledged Tuesday that he made a $107 million error in his damages ruling and cut the award to $420 million.“That ruling may have showed them that no matter where they try those cases, they are going to have trouble persuading judges and juries they shouldn’t be on the hook for the costs of the opioid crisis,” Tobias said.The distributors’ latest proposal is $8 billion higher than the $10 billion offer they made in August. The National Association of Attorneys General, the group sponsoring talks on behalf of more than 35 states, countered with a demand for $45 billion at the time.The drug distributors generate large amounts of cash that could be used to pay a settlement. In its 2019 fiscal year, San Francisco-based McKesson generated $4.04 billion from operations, according to data compiled by Bloomberg. In fiscal 2018, Cardinal brought in $2.77 billion and AmerisourceBergen $1.41 billion.QuickTake: The Opioid CrisisStates, cities and counties claim opioid makers, including J&J and Teva, downplayed the painkillers’ health risks and oversold their benefits through hyper-aggressive marketing campaigns. Distributors, considered to have the deeper pockets by plaintiffs’ lawyers, are accused of ignoring red flags about misuse of the painkillers and illegally flooding states with pills.For example, one pharmacy in Kermit, West Virginia -- population 400 -- received almost 5 million doses from McKesson between 2005 and 2006, records show. About 30 miles (50 kilometers) from Kermit, the company shipped more than 5.8 million doses to a pharmacy in Mount Gay -- population 1,800 -- between 2006 and 2014. Another 2.3 million doses went to a pharmacy three miles away.McKesson, Cardinal Health and AmerisourceBergen, along with other distributors, shipped a total of 76 billion pain pills over a six-year period starting in 2006, according to the U.S. Drug Enforcement Agency. The companies deny the governments’ allegations and have advanced dozens of legal and factual defenses, saying they complied with all state and federal laws.Teva has been grappling with billions in debt as well as thousands of opioid suits over its generic painkillers. Teva’s 2015 acquisition of Allergan Plc‘s generic business for $40.5 billion pushed the company’s debt load from $10 billion to $35 billion.Chief Executive Officer Kare Schultz, who stepped into his role in late 2017, is trying to right a company hurt by falling margins on generic drugs and rapidly declining sales in its best-selling Copaxone multiple-sclerosis drug. Last year, the drugmaker cut its net debt by almost $1 billion to $28.4 billion.Teva officials have told the attorneys generas’ lawyers that the company’s debt load leaves little free cash flow for an opioid settlement, the people said. That’s why it’s offering access to free Narcan, an overdose drug, the people said. In April, the U.S. Food and Drug Administration approved Teva’s request to start selling a generic version of Narcan, a nasal spray version of the opioid-overdose reversal agent Naxalone.In August, Teva officials set aside $646 million to help pay legal expenses related to its alleged role in the abuse of the addictive painkillers linked to tens of thousands American deaths annually. Those funds weren’t devoted to paying settlements.Teva’s bid to use the drugs-for-dismissal model to resolve its opioid liability may indicate the company could face bankruptcy if the proposal gets turned down, said Elizabeth Burch, a University of Georgia law professor who teaches about product-liability law.“I guess free drugs are better than nothing, but it’s not perfect,” Burch said in an interview. “The real question is whether the local governments want to keep this company out of bankruptcy by accepting this offer.”(Updates stock-price movements beginning in fourth paragraph)To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;Riley Griffin in New York at rgriffin42@bloomberg.netTo contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Timothy Annett, Mark SchoifetFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Barrons.com
Cardinal Health Stock, Other Drug Distributors, Jump on Possible Opioid Settlement
The Wall Street Journal reported that the companies could reach a deal with state and local governments.
- Investor's Business Daily
Dow Jones Futures: Chip Leader ASML Leads Key Movers As Stock Market Rally Steps Up
Dow Jones futures: After Tuesday's stock market rally, United Airlines, Sleep Number and McKesson moved on news. ASML earnings topped.
- TheStreet.com
McKesson Is Poised to Make a Significant Upside Breakout
McKesson Corp. is trading higher Wednesday on news that the drug distributor and other parties are in talks to settle over 2,000 lawsuits brought by state and local governments over the opioid epidemic. Let's check out the charts of MCK to see if this early price strength is sustainable. The On-Balance-Volume (OBV) line has been improving lately and the Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal.
- Reuters
UPDATE 3-Three drug distributors in talks to settle opioid litigation for $18 bln -WSJ
Three drug distributors are in talks with state and local governments to settle thousands of opioid lawsuits for $18 billion, the Wall Street Journal reported on Tuesday, citing people familiar with the discussions. McKesson Corp, AmerisourceBergen Corp and Cardinal Health would collectively pay the amount over 18 years under the deal currently on the table, according to the Journal. Shares of McKesson jumped about 9% in extended trading, while those of AmerisourceBergen rose 7% and Cardinal Health about 8% on prospects of ending what is expected to be a long and grueling legal battle related to a health crisis blamed for hundreds of thousands of deaths.
- Investor's Business Daily
Drug Distributors Could Be Nearing An $18 Billion Opioid Settlement
Drug distributing companies McKesson, AmerisourceBergen and Cardinal Health are reportedly nearing an $18 billion deal to settle claims they spawned the nation's opioid epidemic.
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- Insider Monkey
Hedge Funds Are Warming Up To McKesson Corporation (MCK) Once Again
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out […]
