Skip to main content

Shares of

Bristol-Myers Squibb

(BMY) - Get Bristol-Myers Squibb Company Report

slipped Thursday after the company confirmed that it would stop making its antidepressant Serzone.

The company's stock was down 36 cents, or 1.4%, to $25.13. But Wall Street's interest will be focused less on the impact of a drug with limited sales and more on the impact of a drug with many lawsuits.

Bristol-Myers sent letters to wholesalers Tuesday saying that Serzone, whose scientific name is nefazodone, would be discontinued June 14. The company confirmed late Wednesday that it was halting the manufacturing of Serzone as part of a normal practice of reviewing poor-selling products. Serzone is one of 17 drugs that the company will stop making.

Bristol-Myers said Serzone, which has been available in the U.S. since March 1995, is safe, despite the filing of at least 179 lawsuits against the company and efforts by a consumer group to have the drug banned.

Scroll to Continue

TheStreet Recommends

The lawsuits and the petitions to the Food and Drug Administration by the consumer group Public Citizen's Health Research Group allege that the drug causes dangerous and potentially lethal liver damage.

Rob Hutchison, a Bristol-Myers spokesman, said the company "still believes that prescribing physicians believe Serzone has a role to play in the treatment of depression." He said the company continues to defend itself against the lawsuits alleging that the drug is dangerous.

In December 2001, the company added a "black box warning" -- the most dramatic alert for doctors and patients -- to Serzone's label, telling of the possible risk of "severe hepatic events," including liver failure, the need for a transplant or death.

The company says there are 179 pending lawsuits, including some class-action petitions, with 2,035 plaintiffs. Three class-action lawsuits have been filed in Canada, where Serzone was first marketed in March 1994, the company said.

The general theme of the lawsuits is that Bristol-Myers "knew or should have known" about the risks of liver damage and that the company failed to adequately warn doctors and patients, according to the company's latest 10-Q report. The plaintiffs are seeking compensatory and punitive damages, medical monitoring and refunds for the cost of purchasing the drug.

Serzone, which lost U.S. patent protection last fall, has had shrinking sales in recent years due to generic competition and to Bristol-Myers' removal of the drug from Europe in early 2003 and from Canada in November 2003. Serzone recorded $98 million in worldwide sales last year, less than half its sales in 2002 and less than one-third those in 2001.

The Health Research Group, which filed two petitions with the FDA and sued the FDA to ban Serzone, said Bristol-Myers Squibb's decision fails to address the whole issue. The FDA should order the recall of all Serzone held by wholesalers and retailers and it should order the recall of all generic versions of the drug, the group's director, Dr. Sidney Wolfe, said Wednesday.

According to the Health Research Group suit filed March 15 against the FDA, the agency had received reports of 94 liver injuries, including 55 cases of liver failure and 20 liver-toxicity deaths, related to Serzone from 1995 to May 2003.