AstraZeneca's profits slumped by more than a quarter in the three months to the end of September after it paid out nearly $500m (£314m) over claims relating to its Seroquel schizophrenia treatment.
The drug group faces more than 18,000 claims in the US alleging that the drug caused diabetes and other side-effects.
AstraZeneca is setting aside $203m to resolve the claims and another $270m for other claims and legal costs, the company said yesterday.
AstraZeneca's sales dropped by 4 per cent to $7.9bn and pre-tax profits fell by 25.5 per cent to $2.2bn, including a $212m restructuring charge.
David Brennan, the chief executive, stressed yesterday that the company is still on track to meet its annual earnings targets.