Johnson & Johnson Analyst: 3 Takeaways On Opioid Litigation

With Johnson & Johnson JNJ facing off against the state of Oklahoma this week over its potential responsibility for the opioid crisis in that state, BMO Capital Markets issued a report Thursday on the company's thinking as it heads to court.

The Analyst

Joanne Wuensch maintained an Outperform rating on Johnson & Johnson with a $157 price target.

The Thesis

An Oklahoma case allges that Johnson & Johnson it has some responsibility for the opioid epidemic, Wuensch said in a Thursday note. (See her track record here.) 

After a $270-million settlement by Purdue in March and an $85-million settlement  by Teva Pharmaceutical Industries Ltd TEVA in May, J&J is the remaining defendant in the case, relative to the sales of its Duragesic transdermal patch and the drug Nucynta.

The analyst highlighted the following takeaways following a conversation with the company regarding the litigation:

• J&J feels strongly that its products were specifically designed to limit abuse.
• Since the case is heard by a judge and not a jury, a hearing could take two to four weeks, with completion in two months.
• Litigation is a common occurrence in the health care sector that takes significant time to resolve, and often headlines are worse than reality.

J&J is now part of federal multidistrict litigation that bundles opioid cases for over 20 companies that's set to begin in late October, Wuensch said. 

The Price Action

Johnson & Johnson shares were trading higher by 0.72 percent at $132.30.  

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Photo by Dustin Blitchok.