on Monday took a step to close another unpleasant chapter of its past, creating a $185 million reserve to cover an anticipated litigation settlement.
The company said it was recording the reserve because it expects a federal court in New Jersey to approve a settlement of class-action lawsuits regarding the experimental blood pressure drug Vanlev.
In early 2000, plaintiffs began suing the company and certain executives alleging federal securities law violations. They said the company touted Vanlev's prospects while downplaying potential side effects, making "materially false and misleading statements" or failing to disclose "material information" about the drug's safety, effectiveness and commercial opportunities.
Bristol-Myers withdrew Vanlev's application to the Food and Drug Administration in April 2000. Later, it resubmitted the application, but in July 2002 an FDA advisory committee recommended against the drug coming to market because it said the main side effect -- angioedema, a swelling of the face that can obstruct breathing -- outweighed Vanlev's potential benefit. The company stopped trying to develop the drug.
"The parties have reached an agreement in principle on financial terms and are seeking to finalize nonfinancial aspects of a potential settlement," Bristol-Myers said. "At this time, there can be no assurance that a final settlement agreement will be reached."
Shares of Bristol-Myers were down 25 cents, or 1.1%, to $22.08.
Bristol-Myers, which will release its fourth-quarter and full-year financial results on Jan. 25, has been hobbled in recent years by an
assortment of financial,
medical and regulatory problems.
In mid-June, the company settled a
federal investigation relating to claims of wholesaler inventory and accounting irregularities. It agreed to pay $300 million to a shareholder fund to settle an investigation by the
Securities and Exchange Commission
that was announced in August 2004.
The company also promised to abide by an assortment of government-imposed conditions through mid-2007. If these terms are met, the government won't prosecute.
Additionally, last year the company agreed to settle four lawsuits brought in a New York state court relating to wholesaler inventory and accounting issues, as well as to the company's relationship with
and the development of the cancer drug Erbitux. Bristol-Myers paid $89 million to settle the suits.