American Home Products Settles 'Fen-Phen' Dieter Case (Update3)
Bloomberg News
March 17, 1999, 6:04 p.m. ET
American Home Products Settles 'Fen-Phen' Dieter Case (Update3)
(Adds in 8th paragraph that most suits allege heart valve
problems.)
Morrilton, Arkansas, March 17 (Bloomberg) -- American Home
Products Corp. settled a lawsuit over claims it concealed the
health risks of the once wildly popular ''fen-phen'' diet-drug
combination, the company said.
The case, which had been slated to be the first against the
company to go to trial beginning next week in an Arkansas
courtroom, accused the world's seventh-largest drugmaker of
causing Mary Perez, 45, to develop an often fatal lung disease.
After taking appetite-reducing fenfluramine and phentermine for
two months in 1997, Perez developed the disease -- primary
pulmonary hypertension -- which some studies say kills about half
those it afflicts.
While the terms of the settlement were not disclosed, people
familiar with the case said it was for more than $4.5 million.
American Home has settled five previous fen-phen cases for
undisclosed amounts. The amounts ranged from $1.5 million to $4.5
million, people familiar with the earlier settlements said.
The settlement, disclosed after the close of trading today,
won't boost American Home's stock price tomorrow, predicted Neil
Sweig, an analyst with Southeast Research. ''Although one
(settlement) is welcome, there are plenty of other shoes that
have yet to drop,'' he said.
Analysts had been closely watching the Arkansas case to see
whether it would yield a big damage award. The company allegedly
misstated on its warning label the number of lung disease cases
linked to the drug.
Scores of Suits
There are still scores of suits around the U.S. that accuse
AHP and phentermine makers of pushing the diet drugs despite
medical warnings the combination can cause the rare lung disease
and damage heart valves. More than 6 million prescriptions were
written for the drug before AHP discontinued it in 1997 after
less than two years on the market.
''We can confirm the (Arkansas) settlement,'' said Doug
Petkus, a spokesman for AHP's Wyeth Laboratories unit. ''However,
due to a confidentiality agreement between the parties, we are
unable to disclose any terms.''
Most of the fen-phen suits allege the drugs cause heart
valve problems with only a relatively small number saying the
combination caused the lung disease.
Investors largely have discounted the fen-phen litigation,
focusing instead on the new products American Home will introduce
over the next few years, Sweig said.
American Home today won European Union approval for its
sleeping pill Sonata. The company also has an organ-transplant
drug under review at the U.S. Food and Drug Administration.
Analysts have estimated each of these drugs could top $500
million eventually. American Home also helps market Enbrel, a new
rheumatoid arthritis drug developed by Immunex Corp. American
Home also owns a majority stake in Immunex.
American Home fell 2 3/16 to 65 13/16.
--Jef Feeley in Wilmington, Delaware (302) 984-3372 with
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