agreed to settle securities suits with shareholders stemming from its late-2001 FDA blowup, and will record a fourth-quarter charge of $55.4 million to cover the agreement.
The biotech company agreed to pay members of the class represented in "Irvine v. ImClone" about $75 million, with some of the settlement to be covered by insurance. The class consolidated a number of suits originally filed in early 2002. Another securities suit will be settled with $8.75 million from insurance carriers.
The complaints centered on the release of bad regulatory news about the company's Erbitux treatment, an event that has become famous because of stock selling that resulted in criminal convictions of former ImClone CEO Sam Waksal and
Martha Stewart Living
CEO Martha Stewart.
ImClone said the shareholder suit will be dismissed with prejudice with no admission or finding of wrongdoing on the part of any defendant. Terms of the second settlement call for ImClone's board to enact rules under which its research oversight committee will "meet regularly with the officer responsible for the company's dealings with the FDA."
The company retained the right to continue to pursue claims against Waksal, who is currently serving a six-year prison term.