Fitch: Lilly's Ratings Intact Following $9B Actos Jury Verdict

  Fitch: Lilly's Ratings Intact Following $9B Actos Jury Verdict  Business Wire  NEW YORK -- April 8, 2014  A U.S. jury's combined $9 billion judgment against Japan's Takeda Pharmaceutical partner company Eli Lilly (LLY) will not affect LLY's ratings, according to Fitch Ratings. Fitch rates LLY 'A' and the Rating Outlook is Stable.  The U.S. district court in Louisiana this week rendered a $6 billion judgment against Takeda and a $3 billion penalty against LLY stemming from allegations that their Actos diabetes medicine is linked to bladder cancer. LLY co-marketed Actos with Takeda in the U.S. from 1999 until September 2006.  Both companies will legally challenge the verdict and judgment and we note that historically, judgments similar to these are typically reduced on appeal. Under Lilly's agreement with Takeda, Lilly will be indemnified by Takeda for its losses and expenses with respect to the U.S. litigation and other related expenses in accordance with the terms of its indemnification agreement.  With leverage (total debt/EBITDA) of 1.06x for the latest 12-month (LTM) period ended Dec. 31, 2013, Fitch looks for Lilly to operate with debt leverage of 1.1x-1.3x during 2014. Fitch assumes Lilly will maintain adequate liquidity, supported by free cash flow (FCF) generation, balance sheet cash, and availability on its revolving credit facility. At Dec. 31, 2013, the company had approximately $5.4 billion of cash and short-term investments, full availability on its $1.2 billion credit facility that matures April 7, 2015 and roughly $7.6 billion in noncurrent investments. Lilly generated approximately $2.5 billion in FCF during the LTM period.  Additional information is available on  The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at All opinions expressed are those of Fitch Ratings.  ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.  Contact:  Fitch Ratings Robert Kirby, CFA, +1 312-368-3147 Director Corporates Fitch Ratings, Inc. 70 W. Madison Chicago, IL or Kellie Geressy-Nilsen, +1 212-908-9123 Senior Director Fitch Wire One State Street Plaza New York, NY or Media Relations: Brian Bertsch, New York, +1 212-908-0549  
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