Teva, the world's largest generic drugmaker, increased its legal provision for opioid litigation by $1.1 billion in the first quarter, bringing it to $2.6 billion.
"It's the result of a holistic assessment of the impact of (state) settlements we've done so far, (and) what's the most likely outcome based on our current negotiations," CEO Kre Schultz told analysts on a conference call following the company's first-quarter profit, which was in line with expectations.
In February, Schultz told Reuters that Teva was preparing to pay up to $3.6 billion in cash and medicines to settle thousands of lawsuits.
Teva reached settlements with Florida and Rhode Island in March, with a bench trial in West Virginia scheduled for this month and another in San Francisco scheduled for July. However, Schultz is hoping for a nationwide settlement, and talks are ongoing to that end.
"We're getting closer," Schultz stated. "I'm feeling a little more optimistic about the timeline now. That is why I am hopeful that a nationalized settlement will be reached before the end of the year."
Teva earned 55 cents per diluted share, excluding one-time items, in the January-March quarter, down from 63 cents a share the previous year.
Revenue fell 8% to $3.66 billion as a result of lower sales of both generic drugs and its own multiple sclerosis treatment Copaxone in North America, where it faces stiff competition.
According to Refinitiv I/B/E/S data, analysts expected Teva to earn 55 cents per share ex-items on revenue of $3.76 billion.
Teva reduced its revenue forecast for 2022 to $15.4-$16.0 billion from $15.6-$16.2 billion due to currency fluctuations, following revenue of $15.9 billion in 2021. It reaffirmed its forecast for 2022 adjusted EPS of $2.40-$2.60, up from $2.58 last year.
Ajovy, the company's migraine drug, saw a 16 percent increase in sales to $36 million, giving it a 24 percent market share, which Schultz expects to increase to 33 percent. Austedo, a treatment for Huntington's disease, saw a 6% increase in sales to $154 million, with a $1 billion forecast for 2022.
Due to competition on many products, overall generic drug sales in North America fell 15% to $899 million.
In Europe, revenue fell 5% to $1.16 billion, despite Ajovy sales tripling to $30 million.
Teva's net debt has been reduced to $20.7 billion, and the company is continuing to use all of its cash to pay down debt.
In early trading, its New York-listed shares were unchanged at $8.55.