AstraZeneca tried to draw a line under the growing number of claims against its blockbuster anti-psychotic drug Seroquel yesterday when it paid out $198m (£124m) to claimants in the United States.
The agreement, which settles 17,500 claims against the Anglo-Swedish pharmaceuticals company, comes after patients complained they were not made aware of the risks associated with taking the drug – specifically that it could lead to diabetes. AstraZeneca has maintained that it has been open about the risks, adding yesterday that the only trial to consider the complaint found in its favour. The terms of the mediated deal are confidential.
Yesterday's agreement does not end the firm's litigation over Seroquel. As part of the deal, 2,900 claims have been dismissed, but as of 29 June Astra-Zeneca was defending 10,363 lawsuits involving 22,412 American plaintiffs.
The settlement also comes on top of the $520m (£327m) the company paid to the US Justice Department earlier this year to settle other cases relating to the marketing of Seroquel.
As part of its second-quarter results, published two weeks ago, AstraZeneca said it had reached an agreement with 4,000 claimants but because the amount of money was not material at the time, it was not obliged to release further details. In a statement yesterday, the company said the provision would be disregarded in calculating so-called core earnings and would therefore not affect the City's full-year earnings guidance.
"While the terms remain confidential and are subject to non-monetary agreements, we believe it was in the best interest of the company to explore resolving these cases through the mediation process," said a spokeswoman. "We remain committed to a strong defence effort, but will also continue to participate in good faith in court- ordered mediation."
The market welcomed the settlement, with AstraZeneca's shares gaining 1.54 per cent yesterday. Analysts described the announcement as "a modest but welcome development".
The settlement comes a month after rival GlaxoSmithKline said it was setting aside a record £1.57bn to settle claims relating to its diabetes drug Avandia. The deal effectively wiped out GSK's second-quarter earnings.