Teva Pharmaceutical shares surged Monday after announcing a $23 billion settlement it said would resolve allegations against the company for its role in helping to fuel the nation's opioid crisis.
The stock rose as much as 18% in intraday trading before giving up some of those gains. It ended the day up more than 8%. Mallinckrodt and Endo International also briefly moved higher, before ending the day down 4.5% and 4.6%, respectively.
Under the deal, Teva agreed to donate $23 billion in opioid addiction treatment drugs and pay $250 million over 10 years. The company said there is an agreement in principle with a group of attorneys general from North Carolina, Pennsylvania, Tennessee, Texas and other defendants.
"The company is pleased to positively contribute to solving the nationwide opioid epidemic," Teva said in a statement. "Teva has consistently committed to complying with all laws and regulations regarding its manufacture and sale of opioids.
Shortly after the announcement, CNBC reported that attorneys for the plaintiff municipalities said they were not on board with Teva's settlement framework and the proposal appears to be "the same proposal that 17 municipalities rejected on Friday."
Teva, the world's largest generic drugmaker, also announced a settlement with two Ohio counties that would provide opioid addiction treatment for three years. Neither settlement includes an admission of liability.
More than 2,000 counties, cities and states have sued more than a dozen drug companies, distributors and pharmacies, alleging the industry helped create the nation's opioid epidemic. A 'bellwether" trial was set to begin this week involving two Ohio counties. But four drug companies, including Teva, reached a last-minute deal.
Some legal scholars have compared the massive opioid litigation to the tobacco master settlement agreement in the 1990s.
In August, an Oklahoma judge ruled against Johnson & Johnson in the state's opioid suit, forcing it to pay a total $572 million. OxyContin maker Purdue Pharma in September filed for Chapter 11 bankruptcy protection, collapsing under the weight of thousands of lawsuits.
Purdue Pharma said it reached a tentative agreement last month to settle some 2,000 opioid lawsuits filed by local governments, Native American tribes and states. The deal will cost the company and its billionaire owners, the Sackler family, about $10 billion, Purdue Chairman Steve Miller said when the company filed for bankruptcy last month. That includes another $3 billion from the Sackler family's personal fortune as well as agreeing to sell its Britain-based drug company, Mundipharma.
— CNBC's Meg Tirrell contributed to this report.