Bristol-Myers Settles Lawsuits Over '06 Plavix Settlement
23 Juillet 2009 - 9:22PM
Dow Jones News
Bristol-Myers Squibb Co. (BMY) disclosed that it has reached
agreements to settle certain litigation stemming from its
tumultuous efforts three years ago to resolve a patent battle over
its top-selling drug Plavix.
In a regulatory filing Thursday, New York-based Bristol said it
reached an agreement in principle in May to pay $125 million to
settle lawsuits alleging that Bristol and its former chief
executive violated U.S. securities laws by failing to disclose
material information about its 2006 efforts to settle the Plavix
patent litigation.
In 2006, Bristol had reached a tentative agreement with Apotex
Inc. of Canada to block Apotex from selling a generic version of
Plavix in the U.S. years before the patent expired. But that patent
settlement fell apart amid revelations that a Bristol executive
made an oral side agreement, and Apotex briefly sold generic Plavix
in the U.S. before a judge ordered it to stop. Bristol eventually
prevailed in the patent case, but Plavix sales suffered for several
quarters, and the debacle led to the ouster of CEO Peter Dolan.
Bristol pleaded guilty to federal criminal charges of lying to
the U.S. government about the proposed patent settlement and agreed
to pay a $1 million fine in 2007. The former Bristol executive who
made the side agreement with Apotex, Andrew Bodnar, also pleaded
guilty to lying about the deal and was recently given the unusual
sentence of two years of probation during which he must write a
book about his experience in the case, and pay a $5,000 fine.
The lawsuits alleging that Bristol and Dolan violated securities
laws were filed in federal court in New York in 2007.
Bristol said Thursday that "the parties reached a settlement in
principle to resolve this litigation for payment of $125 million,
pending final approval by the court." The company had established a
reserve of $100 million for this matter in the first quarter.
Separately, Bristol said it reached a settlement in principle
last month to resolve so-called shareholder-derivative lawsuits
filed in New York state court "for an amount that is not material
to the company, pending final approval by the court." The suits
were filed against current and former officers of the company,
alleging they breached their fiduciary duties by failing to
disclose material information related to the Plavix settlement
talks.
Also, Bristol said Apotex has challenged the validity of the
Plavix patent in Canada. Bristol said its Plavix marketing partner,
Sanofi-Aventis SA (SNY), which discovered the drug, last month sued
Apotex for patent infringement.
A Bristol spokeswoman couldn't immediately be reached.
Bristol shares rose 3% to $20.89 after reporting improved
second-quarter results and announcing the acquisition of
biotechnology company Medarex Inc. (MEDX).
-By Peter Loftus, Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com