AstraZeneca Facing 26,000 Lawsuits Over Seroquel (Update2)February 03, 2010, 12:48 PM EST
(Adds details on defense costs starting in 13th paragraph.)
By Jef Feeley and Margaret Cronin Fisk
Feb. 3 (Bloomberg) -- AstraZeneca Plc is facing as many as 26,000 lawsuits over its antipsychotic drug Seroquel as the drugmaker prepares for its first jury trial over claims the medicine causes diabetes, according to court filings.
Attorneys for AstraZeneca, the U.K.’s second-largest drugmaker, met with plaintiffs’ lawyers in court-ordered mediation sessions last month to discuss a possible settlement of the Seroquel cases, according to court filings. Consumers’ lawyers said they had about 26,000 cases in their inventories, Stephen Saltzburg, a George Washington University Law School professor who served as mediator, said in the filing.
“I wish there were a magic wand that could be waived to settle all Seroquel cases instantly,” Saltzburg said in the filing. “Such wand does not exist.”
AstraZeneca’s stock fell last week after the drugmaker’s sales forecast and stock-buyback plan disappointed some analysts and fourth-quarter profit missed estimates. The company plans to buy back as much as $1 billion of shares this year, officials said Jan. 28.
The company said in a U.S. Securities and Exchange Commission filing last week it faces more than 25,000 claims that Seroquel caused diabetes. That’s a 65 percent increase in cases over the number the company reported in a January 2009 regulatory filing. Many of the suits also claim AstraZeneca promoted Seroquel, approved for schizophrenic and bipolar patients, for unapproved uses.
New Jersey Trial
A New Jersey judge has set a Feb. 16 trial date for the first of thousands of Seroquel cases filed in that state to go before a jury, according to a December 2009 court filing. Seroquel, which generated sales of $4.9 billion last year, is AstraZeneca’s second-biggest seller after the ulcer treatment Nexium.
“The evidence, looked at fairly and fully, does not back up the allegations that Seroquel was responsible for the plaintiffs’ alleged injuries,” AstraZeneca spokesman Tony Jewell said in an e-mailed statement.
In November, a judge in Florida who is overseeing all federal-court litigation over Seroquel ordered the company to meet with plaintiffs’ lawyers and Saltzburg to discuss settlement.
Saltzburg said while the two-day talks didn’t generate a resolution, he expects negotiations will take place at some point between the company and individual users’ lawyers.
“The question is what is fair for plaintiffs and what is fair for AZ,” the professor said in the Jan. 26 report. “The parties are far apart at the moment on resolving that question.”
Paul Pennock, a plaintiffs’ lawyer representing former Seroquel users, didn’t return calls for comment on the mediation or the upcoming New Jersey trial.
U.S. District Judge Anne Conway in Florida, who is overseeing pre-trial proceedings in federal Seroquel litigation, said in November that she’d ask a panel of judges to return the 6,000 cases consolidated before her to their home courts for trial.
AstraZeneca officials also noted in last week’s SEC filing that the company has paid about $656 million to defend itself in Seroquel cases. That’s an increase of 28 percent, or $144 million, over last year’s Seroquel defense costs, according to regulatory filings.
The company said in the filing that it had insurance of $521 million to cover Seroquel defense costs as of December. That’s an increase of 22 percent, or $95 million, over 2008.
The consolidated case is In Re Seroquel Products Litigation, 06-MD- 01769, U.S. District Court, Middle District of Florida (Orlando).
--With assistance from Trista Kelley in London and Phil Milford in Wilmington, Delaware. Editors: John Pickering
To contact the reporters on this story: Jef Feeley in Wilmington, Delaware, at +1-302-661-7616 or firstname.lastname@example.org; Margaret Cronin Fisk in Southfield, Michigan, at +1-248-827-2947 or email@example.com.
To contact the editor responsible for this story: David E. Rovella at +1-212-617-1092 or firstname.lastname@example.org.
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