Novartis In Tentative Pact To Settle Zelnorm Injury Suits
15 Juillet 2010 - 6:11PM
Dow Jones News
Novartis AG (NVS) has reached a tentative agreement to settle
124 lawsuits brought by people who claimed their use of the
gastrointestinal drug Zelnorm caused heart-related injuries.
The Swiss drug maker also disclosed Thursday that it settled a
patent-infringement lawsuit against Teva Pharmaceutical Industries
Ltd. (TEVA), under which Teva won't begin selling generic versions
of bone-building drugs Zometa and Reclast in the U.S. until after
patent protection for the branded drugs expires in March 2013.
Zometa, Reclast and a related drug, Aclasta, had combined
first-half 2010 sales of about $1 billion.
Novartis disclosed the legal developments in its second-quarter
earnings release Thursday. The company didn't disclose how much
it's paying in the Zelnorm settlement, which was reached in
May.
Novartis spokesman Eric Althoff said the Zelnorm pact is still
tentative and terms haven't yet been disclosed.
Novartis had suspended U.S. sales of Zelnorm in 2007 at the
request of the U.S. Food and Drug Administration because a safety
analysis found it increased the risk of heart attack, stroke and
chest pain, compared with placebo.
Zelnorm, which first went on sale in 2001, was approved to treat
irritable bowel syndrome with constipation. It had sales of $561
million in 2006, the last full year before its withdrawal.
The withdrawal sparked a number of lawsuits. Novartis said in
its earnings release it's a defendant in about 135 cases brought in
U.S. and Canadian courts.
Novartis said the tentative Zelnorm settlement is contingent
upon the consent of individual plaintiffs. The pact averted the
first trial in the Zelnorm product-liability litigation, which had
been scheduled to begin in Virginia in June but is now postponed,
Novartis said.
In another legal matter, Novartis said Thursday that it agreed
to pay $80 million to an inventor of certain patents of Novartis's
vaccines and diagnostics unit, plus $20 million to a nonprofit
research organization to be established by the inventor, to settle
a dispute.
The inventor had sued Novartis in federal court in New York
alleging breach of a consulting contract and claimed he was
entitled to at least a portion of settlement proceeds from
arbitration proceedings for the patents. The inventor won a trial
in the case last year, and Novartis appealed. Novartis said
Thursday that it reached a settlement in the case in May.
Novartis's American depositary shares rose 0.6% to $51.04 in
recent action Thursday. Teva was up 1.1% to $55.96.
Teva representatives couldn't immediately be reached.
-By Peter Loftus, Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com