Sources inform "Globes" that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has taken a loan of several hundred million dollars from UK bank HSBC Holdings plc (LSE: HSBA) in order to pay the $560 million it owes Pfizer Inc. (NYSE: PFE; LSE: PFZ) and Japan's Takeda Pharmaceutical Co. Ltd. (TSE: 4502) to settle the patent infringement suit over its 2007 "at risk" launch of generic version of Protonix.
Teva said, "Teva does not comment on information regarding its relations with banks except that which is published for the public." HSBC declined to comment.
Teva has been assisted by HSBC in several of its financing procedures in recent years. For example in 2011, HSBC and Citibank provided a $1.5 billion credit line for the pharmaceutical company and later served as one of the underwriters in Teva's bond offering on Wall Street. Following the acquisition of Cephalon that same year, HSBC extended an additional credit line and served as underwriter in a further large bond offering.
In the Protonix settlement, Teva agreed to pay Pfizer and Takeda $1.6 billion - half this year and the $800 million balance by October 2014. In recent quarterly results Teva has already recognized sums set aside for the settlement.
Although Teva believes it is entitled to insurance coverage from the Illinois Union Insurance Co. for some of the compensation, the insurance company itself insists it does not need to pay out. Teva has not reported any legal proceedings related to the matter.
Published by Globes [online], Israel business news - www.globes-online.com - on September 30, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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