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Wyeth Says Jury Awards Diet-Drug Users $200 Million (Update2)
May 27 (Bloomberg) -- A Pennsylvania jury decided that two former users of Wyeth's drugs taken as part of the fen-phen diet combination deserved $200 million in damages for heart problems caused by the medicine.
Jurors in state court in Philadelphia on May 24 found that Wyeth's weight-loss medicine scarred Margie Paul's and Elaine Karician's hearts and that they were entitled to $100 million each in damages, Wyeth said in a statement. Jurors must still decide whether Wyeth is liable for the women's damages.
Paul's and Karician's trial was the latest in Philadelphia to focus on claims concerning Wyeth's now-withdrawn diet drugs. Over the past 10 months, other Philadelphia juries have rejected claims by former users or said individuals who once used the appetite suppressant deserved as much as $500,000.
"I think that Philadelphia juries are beginning to understand the significance of the damage these drugs have done to people's hearts and are awarding appropriate damages,'' said George Fleming, a lawyer who has represented former fen-phen users in Philadelphia cases. He didn't represent Paul or Karician.
The phase of the case where jurors will determine whether Madison, New Jersey-based Wyeth is liable for the damages has been delayed until July 25, the company said in the statement.
Settlement Talks
"The damage awards are excessive and completely unsupported by the evidence and are inconsistent with other recent cases in Philadelphia,'' said Lawrence V. Stein, a senior vice president and the company's general counsel, in the statement.
While the jury returned the verdict May 24, the judge in the case sealed the finding. Steven J. Kherkher, one of Paul's and Karician's lawyers, couldn't immediately be reached to comment.
Wyeth said that they were in settlement negotiations with Paul's and Karician's lawyers to resolve the cases as part of a global resolution of the law firms' remaining inventory of fen- phen claims.
The verdict, which Wyeth said in court papers is "almost 100 times any prior'' fen-phen verdict in Philadelphia, is likely to cause concern among investors in the company, said Jake Dollarhide, a money manager who invests in drug companies.
`Won't Rest'
"It poses a huge risk to Wyeth and their long road back to recovery,'' said Dollarhide, chief executive of Longbow Asset Management Co. in Tulsa, Oklahoma, in a telephone interview today. Longbow owns shares of Wyeth competitors including Pfizer Inc. and Johnson & Johnson.
"The fen-phen matter just won't rest. It's got to be concerning them a great deal,'' Dollarhide added. "The issue resurfaces time and time again. The fen-phen matter has legs.''
Wyeth has been working to resolve the remainder of its fen- phen liability across the country. The company faces a trial of the first of more than 5,000 fen-phen claims filed in New Jersey starting May 31.
Wyeth said on Jan. 31 that it would add $4.5 billion to its reserve to cover legal liability in the so-called fen-phen cases, bringing to $21.1 billion the amount set aside to resolve the litigation. Wyeth incurred a $1.76 billion fourth-quarter loss due to the reserve increase.
Pondimin and Redux
Wyeth removed the diet drugs Pondimin and Redux from the market in 1997 after researchers linked them to heart and lung problems in some users. Those drugs were used with the generic phentermine in the fen-phen combination.
Wyeth spokesman Doug Petkus said he couldn't comment on what specific drugs were involved in the case.
Doctors wrote more than 6 million prescriptions for the diet- pill combination, which included Wyeth's Pondimin or Redux drugs and the generic drug phentermine, before the products were pulled off the market in 1997. The company withdrew the drugs from pharmacies after researchers linked them to heart problems and a fatal lung disease in some users.
The Philadelphia cases involve former fen-phen users who declined to participate in the company's $3.75 billion class- action settlement and chose to go to trial separately.
The verdict is the seventh-largest jury award nationally so far this year, according to data compiled by Bloomberg.
The largest verdict in a fen-phen case was awarded last year in Texas, more than $1 billion to the family of a 41-year-old woman who died after being diagnosed with a fatal lung disease linked to the diet drugs.
100 Minutes
The next largest fen-phen verdict in Philadelphia Common Pleas cases since July 2004 was a $5.5 million award to two Utah woman March 30. Jurors in that case ruled April 8 that the company wasn't liable for paying that award.
In court papers filed today in connection with Paul's and Karician's cases, Wyeth's lawyers argued that the verdict should be thrown out because the women's lawyers improperly "inflamed'' the jury.
The company said that jurors deliberated for less than 100 minutes before returning the $200 million award.
Shares of Wyeth, which have risen 22 percent over the last 12 months, rose 9 cents to $43.82 in New York Stock Exchange composite trading today. Wyeth released after the close of regular U.S. trading.
The cases are Paul v. Wyeth, No. 003723 and Karician v. Wyeth, 001224, in Philadelphia Court of Common Pleas.
To contact the reporter on this story:
Jef Feeley in Wilmington at jfeeley@bloomberg.net.
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