Replies to post #128822 on Biotech Values

[DewDiligence]

What did you make of the $1.5B litigation reserve for improper marketing of Depakote?

ABT’s exposure to Depakote litigation is very old news and most investors probably expected the liability to be close to the amount that has now been reserved, so this is a non-story, IMO.

Depakote has been off-patent for about three years.

[DewDiligence]

Newswires are reporting that the actual Depakote settlement will cost ABT $1.3B ($800M in civil penalties and $500M in criminal penalties).

ABT’s $1.5B reserve for this settlement is pre-tax, and it’s not clear whether any of the settlement payments will be tax deductible. If none or only a small amount is tax-deductible, the $1.5B reserve will be more than sufficient.