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Naloxone, a medication used to treat opioid overdose. Photo: Bernard Weil/Toronto Star via Getty Images

Equity analysts at UBS downgraded pharmaceutical companies Teva and Mylan significantly on Tuesday, highlighting pending litigation and an "unclear path to upside."

Driving the news: Teva on Sunday agreed to pay $85 million to settle claims with the attorney general of Oklahoma for its role in the opioid crisis.

  • Teva's stock price fell more than 12% to a 19-year low following the downgrade as the lawsuit, which alleges Teva joined with other companies as part of a generic drug price fixing racket, continued to hammer the company.
  • Mylan's stock fell nearly 6%. The two pharmaceutical companies are the biggest manufacturers of generic drugs.

The backdrop: Generic drugmakers were hit by a price-fixing lawsuit this month, filed by 44 states alleging 20 corporate defendants conspired to fix prices of more than 100 generic drugs, raising prices by more than 1,000%.

The big picture: UBS analyst Navin Jacob, who downgraded his price target on Teva to $12 from $22, said in a note that the generic drugs and opioid lawsuit open the company up to a potential $4.1 billion in damages.

  • Mylan shares have tumbled nearly 20% since the lawsuit was announced earlier this month, and Teva's stock has fallen by around 33%.

Go deeper: What's at stake in the Oklahoma opioids trial

Go deeper

Ro Khanna wary of Biden approach on Middle East

Rep. Ro Khanna. Photo: Cody Glenn/Sportsfile for Web Summit via Getty Images

An outspoken progressive Democrat is wary of President Biden’s approach to the Middle East, arguing it’s like “conceding defeat of the aspiration” to win a Nobel Peace Prize.

Why it matters: A number of members of Biden’s own party dislike his Middle East strategy, as his administration signals the region is no longer the priority it was for President Obama and his predecessors.

Democrats eye reconciliation for immigration

Photo: Chip Somodevilla/Getty Images

Comprehensive immigration reform is a pipe dream, but some Senate Democrats are hoping to tie key immigration provisions to the next big reconciliation push.

Why it matters: Immigration is one of the most controversial and partisan issues in U.S. politics, which is why the budget reconciliation process — which allows for bills to pass the Senate with a simple majority rather than the usual 60 votes — is so attractive.

3 hours ago - Politics & Policy

Scoop: Biden meeting Quad amid own pivot toward Asia

Artists paint portraits of President Biden and Vice President Kamala Harris in Mumbai, India. Photo: Anshuman Poyrekar/Hindustan Times via Getty Images

President Biden plans to meet this month with the leaders of Japan, Australia and India in a virtual summit of the so-called Quad, according to people familiar with the matter.

Why it matters: By putting a Quad meeting on the president’s schedule, the White House is signaling the importance of partnerships and alliances to counter China’s growing influence in the Indo-Pacific region.