RE: Results out16 Feb 2023 07:37
Commentary on VIC last November on this:
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There’s a lot more back and forth in the document on whether what INDV did actually caused harm to the market, and we are by no means antitrust legal experts. However, there are couple of fact here that make us feel comfortable:
- The recent quarterly filing mentions they were offered a $290m settlement which they did not take. This leads us to believe they think they have a case where they will likely settle for much less or not incur any penalties. $290m therefore seems like the ceiling for a potential fine and that wouldn’t be completely devastating to the company. $290m is 11% of the market cap and given the fact that the stock dropped ~11% from August 23rd (the day that the summary judgement was denied) to September 1st likely indicates that a fine is now priced into the stock
- In a recent status conference for the case, the judge asked how much INDV already paid out for the DOJ settlement. The judge was apparently very impressed with how much INDV has already paid out, a great sign for the case and the amount they are likely to pay out for this. Keep in mind INDV/Reckitt have already paid out $2bn+ for a related claims
- The denial of summary judgement simply said that this case needs to go to trial to be decided and that it “in no way signals that Plantiffs will ultimately be successful on the merits of their claim”. INDV seems to have at least a decent case here on our reading. There don’t seem to be any large product hopping awards as a precedent, so this also makes us feel comfortable on the outcome
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