Bayer’s Baycol Settlements Coming At Quicker Pace; 785 Suits Settled So Far
Executive Summary
Bayer has seen the pace of Baycol-related settlements quicken following favorable decisions in the first two cases to come to trial, Finance Division Head Klaus Kühn said during Bayer's May 7 quarterly earnings call
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Bayer has seen the pace of Baycol -related settlements quicken following favorable decisions in the first two cases to come to trial, Finance Division Head Klaus Kühn said during Bayer's May 7 quarterly earnings call. "We see an acceleration here in this process," Kuhn said. Juries in Jackson, Mississippi and Corpus Christi, Texas recently returned verdicts in Bayer's favor. "We have so far settled 785 cases without concession of liability, including 27 deaths," Kühn reported. "The settlements so far amounted to approximately $240 mil." Bayer has not set aside a litigation reserve and will rely on insurance, the company said. The cholesterol agent Baycol (cerivastatin) was withdrawn in August 2001 following reports of rhabdomyolysis, including deaths (1 (Also see "Baycol Withdrawal Gives Boost To Pravachol; Will Crestor NDA Be Affected?" - Pink Sheet, 13 Aug, 2001.), p. 4). Kühn said that Bayer is only settling cases involving patients who developed severe rhabdomyolysis. "We only settle cases with severe rhabdomyolysis," he said. "I have to be very careful - because we have these shareholder class-actions - what I say, but we are very confident that the number of real matter rhabdomyolysis cases is significantly below the number of claims here." There are 8,800 lawsuits currently pending, Kühn noted, including 4,800 from a single law firm. Bayer expects to obtain pediatric exclusivity for Cipro (ciprofloxacin) towards the end of the third quarter, Kühn said. Though a patent settlement allows Barr to launch an "authorized" generic during pediatric exclusivity, which would begin after the expiration of the patent Dec. 9, the financial impact will be less than with unauthorized competition, the exec said. "The impact is hard to assess and not comparable, let's say, to a normal entry of generic competition in a market," he said, because Barr "has to purchase...the material at a determined price from us." Cipro sales were down 19% in the quarter; Kühn attributed the drop to a weak U.S. dollar. |