Jury hits Takeda, Eli Lilly with $9B penalty

Shares of Japans's Takeda Pharmaceutical closed down 5.2% on the Tokyo Stock Exchange, but shares in its partner company Eli Lilly were up about 10 cents at mid day, or up .18%, after a U.S. jury ordered Takeda and Eli Lilly to pay $9 billion in punitive damages over a diabetes medicine linked to cancer.

The U.S District Court in western Louisiana decided a $6 billion penalty for Takeda and $3 billion for its business partner and co-defendant Eli Lilly. It also ordered $1.5 million in compensatory damages in favor of the plaintiff.but Takeda, Japan's biggest drugmaker, said it would "vigorously challenge" the decision.

The U.S. Food and Drug Administration warned in June 2011 that there is a 40% increase in bladder cancer risk in people who used the drug for longer than a year. It required that the cancer risk be added to the medication's warning label. Actos is banned in some European companies.

The legal fight turned on whether Actos, which is used to treat type-two diabetes, caused a patient's bladder cancer and by implication was responsible for other cases of the cancer.

Takeda and Eli Lilly are facing numerous other lawsuits over the drug, which allege failure to warn about side effects and concealment of its health risks.

Kenneth Greisman, a Takeda general counsel, said in a statement that the evidence does not support a link between Actos and bladder cancer.

"Takeda respectfully disagrees with the verdict, and we intend to vigorously challenge this outcome through all available legal means, including possible post-trial motions and an appeal," he said.

Punitive damages are often reduced on appeal.

Actos, which has been sold since 1999, comes with warnings about various serious side effects, including liver problems and higher risk of broken bones.

A former Takeda medical reviewer, Helen Ge, alleged in a 2012 U.S. District Court filing in 2012 that the Japanese drugmaker understated the number of bladder cancer cases possibly linked to Actos ! in its disclosures to the FDA.

There are more than a dozen diabetes medications sold, but, only Actos works the same way as Avandia. Both increase patients' sensitivity to insulin, which is needed to break down carbohydrates. Avandia was linked to a higher risk of heart attacks, but the FDA last year removed safety warnings on the drug.

Contributing: Yuri Kageyama of Associated Press