Hedge funds and short sellers are raising their bets that lawsuits against pharmaceutical companies will drive down their stock prices and maybe even put them out of business.

The intrigue: Data from S3 Partners provided exclusively to Axios shows bets against biotech and pharmaceutical companies have risen 12% since the beginning of the year to nearly $62 billion of short interest.

  • "Wall Street is underestimating the impact on companies from the opioid litigation," Justin Simon of health-care hedge fund Jasper Capital Management told the Wall Street Journal.

Driving the news: Close to 2,000 lawsuits have been filed accusing big pharma companies of fueling the opioid epidemic. Drugmakers including Mallinckrodt, Allergan, Endo Pharmaceutical, Johnson & Johnson and Teva, and several drug distributors have been named as defendants.

Why you'll hear about this again: Jasper has been betting against Mallinckrodt and other companies named in the lawsuits, WSJ reports, noting that "Some hedge funds have been watching for distress in the sector, citing certain companies' use of leverage or declining profitability."

  • "On Teva's most recent earnings call, Chief Executive Kåre Schultz said, 'As you know, we have a lot of debt, so we don’t have that much money. So I think [opioid plaintiffs will] have to find somebody else if they want big settlements. It won't be with us.'"

Go deeper: Lawsuit says Johnson & Johnson was opioid "kingpin"

Go deeper

3 hours ago - Sports

Pac-12 will play football this fall, reversing course

A view of Levi's Stadium during the 2019 Pac-12 Championship football game. Photo: Alika Jenner/Getty Images

The Pac-12, which includes universities in Arizona, California, Colorado, Oregon, Utah and Washington state, will play football starting Nov. 6, reversing its earlier decision to postpone the season because of the coronavirus pandemic.

Why it matters: The conference's about-face follows a similar move by the Big Ten last week and comes as President Trump has publicly pressured sports to resume despite the ongoing pandemic. The Pac-12 will play a seven-game conference football season, according to ESPN.

Dave Lawler, author of World
3 hours ago - World

Global coronavirus vaccine initiative launches without U.S. or China

Data: Gavi, The Vaccine Alliance; Map: Naema Ahmed/Axios

A global initiative to ensure equitable distribution of coronavirus vaccines now includes most of the world — but not the U.S., China or Russia.

Why it matters: Assuming one or more vaccines ultimately gain approval, there will be a period of months or even years in which supply lags far behind global demand. The COVAX initiative is an attempt to ensure doses go where they're most needed, rather than simply to countries that can produce or buy them at scale.

Updated 4 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 6:15 p.m. EST: 32,062,182 — Total deaths: 979,701 — Total recoveries: 22,057,268Map.
  2. U.S.: Total confirmed cases as of 6:15 p.m EST: 6,967,103 — Total deaths: 202,558 — Total recoveries: 2,670,256 — Total tests: 97,459,742Map.
  3. Health: Cases are surging again in 22 states — New York will conduct its own review of coronavirus vaccine.
  4. Business: America is closing out its strongest quarter of economic growth.
  5. Technology: 2020 tech solutions may be sapping our resolve to beat the pandemic.
  6. Sports: Here's what college basketball will look like this season.
  7. Science: During COVID-19 shutdown, a common sparrow changed its song.

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