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Bristol-Myers Squibb puts aside $185m for lawsuit

Date published: 24/01/2006

Bristol-Myers Squibb has put aside a reserve of $185 million in anticipation of a lawsuit. The case, being heard in a New Jersey court, relates to the failed experimental compound omapatrilat (Vanlev). The company explained in a statement: "Beginning in the spring of 2000, the plaintiffs brought lawsuits against the company and certain company executives alleging violations of federal securities laws and regulations."

The shareholders bringing the action and the company have now reached an agreement in principle on financial terms and are now trying to hammer out the non-financial aspects, although the company has given no assurance that a final settlement will be made. The case stems from allegations that the firm did not tell investors that the drug, which had expected annual sales as high as $4 billion, had serious side effects, despite the US Food and Drug Administration privately raising concerns.

It is thought the company may be forced to repay some moneys to shareholders. Associated Press reports that the lawyer for the shareholders Thomas Dobbs said Bristol-Myers Squibb has agreed to disclose designs for clinical trials and the results for all drugs it markets.

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