AstraZeneca Judge to Urge Return of Seroquel Cases to Courts

By Jef Feeley and Margaret Cronin Fisk

Nov. 19 (Bloomberg) -- AstraZeneca Plc may face as many 6,000 trials of lawsuits claiming its antipsychotic drug Seroquel causes diabetes after a judge said she will recommend sending the cases back to their home courts.

U.S. District Judge Anne Conway in Orlando, Florida, who is overseeing pre-trial proceedings in federal Seroquel litigation, said yesterday she’ll urge a panel of judges to return all of the cases to courts across the U.S. for possible trials.

AstraZeneca, the U.K.’s second-largest drugmaker, wanted Conway to send as many as 60 suits back to their home courts for trial as test cases. Lawyers for former users contended they were ready to press forward on their claims that the London- based company downplayed Seroquel’s diabetes risk.

Conway’s ruling “will get the litigation moving,” Paul Pennock, a lawyer for former Seroquel users, said in an interview. “The decision will help get a huge group of cases to a state of trial-worthiness.”

The company faces more than 14,000 suits in U.S. state and federal courts alleging Seroquel caused diabetes in some users. Seroquel, which generated sales of $4.45 billion in 2008, is AstraZeneca’s second-biggest seller after the ulcer treatment Nexium.

First Trials?

AstraZeneca officials noted in regulatory filings last month that the drugmaker could face the first trials of Seroquel suits in state courts in Delaware and New Jersey in January. The company also disclosed it has spent $623 million in “legal defense costs” for Seroquel litigation so far.

The drugmaker contends evidence in the cases “does not back up the allegations that Seroquel was responsible for the plaintiffs’ alleged injuries,” Tony Jewell, AstraZeneca’s spokesman, said in an e-mailed statement.

Since 2006, Conway has overseen the federal cases during pre-trial evidence gathering, part of the Multi-District Litigation program intended to save money by streamlining document exchanges and avoiding duplication.

AstraZeneca officials said they were pleased Conway agreed to ask other judges to delay trying Seroquel cases until she can decide whether 54 cases from Alabama and Florida should go to trial.

“Because federal court judges generally follow suggestions from MDL courts, AstraZeneca expects to spend the next eight months analyzing the merits” of the cases still before Conway, Arthur Brown, one of the company’s lawyers, said in an e-mailed statement.

‘Needless Burdens’

AstraZeneca’s lawyers had asked Conway to send back only a limited number of cases to “avoid placing needless burdens” on other judges across the country, according to an Oct. 19 court filing.

The company’s lawyers told Conway at yesterday’s hearing they wanted about 60 suits to be sent back to federal courts in California, Mississippi, South Carolina and Ohio as test cases.

A small number of trials would give both sides “the benefit of knowing what juries think of these cases,” said Mike Brock, another AstraZeneca lawyer.

Lawyers for ex-Seroquel users countered that since all MDL proceedings had been wrapped up, the cases should be sent back to their home courts starting next month.

“While providing the prospect of lifetime employment for AstraZeneca’s attorneys, AstraZeneca’s plan is also plainly designed to permit AstraZeneca to prolong resolution of this litigation,” Camp Bailey, a Houston-based lawyer for Seroquel users, said in a Nov. 6 court filing.

Settlement Talks

Conway also ordered lawyers for both sides yesterday to meet with a mediator “to see if there is any possibility for a settlement” of the Seroquel litigation. The judge said MDL procedures required her to order the settlement talks.

“We continue to believe these cases are without merit, but we will honor the judge’s request,” Jewell said in an e-mailed statement.

AstraZeneca’s American depositary receipts, each representing one ordinary share, rose 1 cent to $45.47 in New York Stock Exchange composite trading yesterday. They have gained 11 percent this year.

The case is In Re Seroquel Products Litigation, 06-MD- 01769, U.S. District Court, Middle District of Florida (Orlando).

To contact the reporters on this story: Jef Feeley in Orlando, Florida at; Margaret Cronin Fisk in Southfield, Michigan, at

Last Updated: November 19, 2009 00:01 EST